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Friday, April 4, 2014
Slom Slims Budget: "If we don't change our course, we are headed for fiscal disaster"
By Sen. Sam Slom @ 7:03 PM :: 4369 Views :: Hawaii State Government

THE HAWAII SENATE MINORITY ANNOUNCES NEW ALTERNATIVE SUPPLEMENTAL BUDGET

News Release from Office of Sen Sam Slom

Honolulu - April 4, 2014 — When referring to Hawaii's financial budgets Senator Sam Slom said today "The budget is the most important thing that we do here in the legislature...If we don't change our course, we are headed for fiscal disaster..." Senator Slom stated: "The numbers are real... The issues are real...The question is the solution.

Recently, Senator Slom voted "no" on the Senate budget after careful deliberation. Senator Slom states "My reasoning for (voting no) is: first of all, I don't think 23.7 billion dollars is austere; second, I don't think it's prudent under the conditions we are living now - the reduction in growth estimates by the Council of Revenues, a pull back on defense and non-defense expenditures, (and) the overall continuing malaise of Hawaii's economy."

After analyzing the proposed budgets of the Governor, the House of Representatives and the state Senate, the Hawaii Senate Minority identified that all three proposed budgets will result in a depletion of the State's cash reserves as early as 2016. In an attempt to deal with this looming problem the Hawaii Senate Minority today released its Alternative Supplemental Budget for the fiscal years 2014-2015. The Senate Minority proposed budget reflects a decrease of $795 million in total funding compared to the proposed Senate Budget.

Senator Slom says “We’re going to have to live within our means.

The Alternative Supplemental Budget proposes a comprehensive plan that will make Hawaii's government less expensive, yet more effective, for our state's taxpayers and small businesses by advancing two simple fiscal and economic objectives:

  1. Reduce the rising cost of living for Hawaii's taxpayers and improve the deteriorating business climate through tax reform;
  2. Make government less expensive and more effective through budget cuts.

Paul Harleman, M.B.A., Budget Director of the Senate Minority in explains "If Medicaid costs continue to go up at the current historical rate, in the next 5 years general fund spending in Hawaii on Medicaid will surpass that of public education." In explaining the various problems facing the long-term financial outlook at today's press conference Mr. Harleman said: "Medicaid will more than double in the next five years...and then spending will...surpass spending for public education.” Senator Slom backed up these concerns stating "Hawaii is #1 in the nation in homelessness, welfare expenditures, and food stamps."

Three highlights of the Hawaii Senate Minority Alternative Supplemental Budget proposal:

I. BALANCE THE BUDGET IN THE LONG RUN BY USING CONSERVATIVE REVENUE ESTIMATES

In less than six months the state's financial outlook has shifted from a proclaimed $844 million surplus to looming long-term budget deficits. Although the recent downgrade by the Council on Revenues has come as a surprise to some, the Senate Minority has long argued that the economy has not turned a corner and our state's overall business climate has not improved.

  • To correct overly optimistic revenue projections, the Supplemental Alternative Budget is based on a more conservative set of long-term revenue projections.
  • Under both the more conservative revenue estimates as well as the current Council on Revenues’ projections, both the House and Senate Budgets are not in balance--and without any future adjustments are projected to deplete the state's cash reserves as early as FY 2016.
  • The Senate Minority Alternative Budget is the only proposal that balances the state's checkbook beyond the current fiscal biennium under both revenue assumptions.

II. REDUCE THE SIZE AND COST OF GOVERNMENT BY $795 MILLION IN FY 2015 AND LIMIT FUTURE GROWTH TO INFLATION ONLY

The Senate Minority Alternative Supplemental Budget clarifies the tough decisions that have to be made today to reposition Hawaii for a better tomorrow. The $795 million consists of $480 million in general funds and $315 million in special funds. This reflects a 7 percent decrease in comparison to the current Senate Budget.

The proposed budget cuts are derived from the following:

  • $17 million in general fund savings from discontinued programs
  • $110 million in general and special fund savings by removing vacant budgeted positions
  • $146 million in general fund savings through a 10 percent across-the-board cut in discretionary spending
  • $207 million in general fund savings from targeted cuts on various programs within the Department of Education, Health, and the University of Hawaii
  • $315 million in special fund savings with an across-the-board 10 percent cut.

III. LEAVE THE STATE TREASURY WITH A PROJECTED GENERAL FUND BALANCE OF $486 MILLION IN FY 2019

With the highest cost of living and the worst business climate in the nation, tax reform could reposition Hawaii's economy to make it more competitive in the long run. Although revenue losses are often cited as a barrier to tax reform, the Senate Minority Alternative Supplemental Budget proves the contrary and shows that Hawaii could indeed move in a different direction, with sustained balanced budgets and lower taxes.

Read the full report here: http://hawaiisenateminority.org/reports/budget/

The Senate Minority Alternative Biennium Budget: For Fiscal Years 2014 – 2015

April 4, 2014 Press Release (PDF)

SenateMinority_Alternative_Supplemental FY2015_Budget Worksheets (Excel File)

2013 Senate Minority Alternative Budget (Link)

# # # # #

PR: Alternative budget

HNN: Republican State Senator Proposes Smaller Budget

AP:  Republican state Sen. Sam Slom proposes alternative budget with less spending for Hawaii

 

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