Monday, September 26, 2022
Hawai'i Free Press

Current Articles | Archives

Wednesday, March 26, 2014
Hawaii to run out of cash reserves in 2016
By Sen. Sam Slom @ 12:51 AM :: 7787 Views :: Hawaii State Government, Labor, Taxes

Hawaii to run out of cash reserves in 2016

Both the Governor's and House Hawaii State Budget Proposals Are Not In Balance

News Release from Office of Sen Sam Slom March 25, 2014

HONOLULU— Senator Sam Slom indicates concern that as early as 2016 Hawaii will run out of cash reserves resulting in Hawaii's budget being unconstitutional.[1] 

Senator Slom says: 

"As the Senate Minority has predicted for several years, the State has not provided incentives for an improved business climate and is thus becoming both an entitlement society and a debt based economy.  It is imperative that we change the fiscal direction of the State."

  *   *   *   *   *

IMPORTANT FACTS YOU KNOW ABOUT THE STATE BUDGET

by Paul Harleman, M.B.A., Budget Director, Hawaii Senate Minority

Recently, the State Council on Revenues significantly reduced the revenue growth projections that are used to determine the budget spending levels for the two upcoming fiscal years. Specifically, the Council lowered the revenue growth forecast for FY 2014 from 3.3% to 0% and for FY 2015 from 7.4% to 5.5%. This downward forecast is important because it will be used by the legislature in the current budget negotiations.

At the present time, only the Governor and the House have formally introduced their respective drafts of the state operating budget. Based on the downward revenue forecast, both budget drafts that have been submitted by the Governor and the House are not in balance and are based on projected long-term deficit spending.

Constitutionally, the state could engage in annual deficit spending as long as there are enough cash reserves to absorb these deficits. However, as figure 1 illustrates, under the current budget drafts the state is projected to run out of its cash reserves as early as FY 2016, which would be unconstitutional.

Since the current long-term revenue growth projections are based on a relatively optimistic scenario of an average annual growth rate of 5%, a failure to make significant budget cuts today will lead to severe budgeting problems during the upcoming biennium, which will be in next year's legislative session.

Figure 1. Projected General Fund Surpluses/Deficits and Ending Carry-Over Balances FY 2013-2019

(Starting with $844M Surplus in 2013)

General Fund Surplus Deficit Chart March 2014 SLOM

Source: Based on the March 11th Council on Revenues General Fund Forecast. Proposed Executive Supplemental Budget vs. HB 1700,HD1 (2014).

Figure 2. Projected General Fund Surpluses/Deficits and Ending Carry-Over Balances FY 2013-2019  (WITH ACTUAL NUMBERS):

General Fund Surplus Deficit pt 2 March 2014 SLOM

# # # # #

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Life Alliance

Hawaii March for Life 

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT