Saturday, July 20, 2024
Hawai'i Free Press

Current Articles | Archives

Monday, January 25, 2010
Lingle: Divert 5% to create “fiscal stabilization fund”
By News Release @ 2:30 PM :: 5025 Views :: Energy, Environment

 

GOVERNOR LINGLE PROPOSES FISCAL STABILIZATION FUND TO PREPARE FOR FUTURE FISCAL EMERGENCIES

Governor Linda Lingle announced in her State of the State Address she will propose a constitutional amendment to rename and revise the State’s Rainy Day Fund to create a Fiscal Stabilization Fund.  This fund will shield Hawai‘i in future years from the need to raise taxes during periods when the economy is contracting and citizens can least afford to pay more.

The Fiscal Stabilization Fund will ensure that in years when tax revenues are growing, 5 percent of the general fund’s end of year balance will be placed in the Stabilization Fund prior to granting the currently mandated refund to taxpayers.

This prudent and important revision to the state’s Rainy Day Fund will augment the fund’s current single source of revenue from Tobacco Settlement moneys.

TITLE:       

A BILL FOR AN ACT PROPOSING AMENDMENTS TO THE CONSTITUTION OF THE STATE OF HAWAI‘I RELATING TO THE STATE FISCAL STABILIZATION FUND.

PURPOSE:       

To ensure funds are available for future fiscal emergencies by creating the State Fiscal Stabilization Fund and requiring 5 percent of general fund end of year balances to be deposited into it.

JUSTIFICATION:       

During periods of economic growth, tax collections may exceed spending needs resulting in a positive balance at the end of the fiscal year.  However, when the economy is sluggish, tax revenues generally decline.

To build a financial reserve to lessen the negative impact of emergencies or economic downturns on the State budget, this constitutional amendment establishes the State Fiscal Stabilization Fund and requires 5 percent of general fund end of year balances to be deposited into the Fund.  Deposits are made until such time as the fund equals 10 percent of general fund revenues for the preceding fiscal year.

The Constitution authorizes the Director of Budget and Finance to transfer the required balances into the State Fiscal Stabilization Fund at the close of each fiscal year.  This transfer shall take place prior to calculating whether the provisions of section 6 of article VII of the State Constitution are met governing tax refunds or tax credits to the taxpayers of the State.

Impact on the public:  Ensures that the State can meet its financial obligations during periods of economic difficulty and lessens the need to increase taxes when the economy and community can least afford to pay more taxes.

Impact on the department and other agencies:  Ensures that the State can meet its financial obligations during periods of economic difficulty.

GENERAL FUND:        Transfers a portion of general fund surplus balance to a State fiscal stabilization fund.

OTHER FUNDS:        None.

EFFECTIVE DATE:        Upon ratification.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

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 ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

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

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii