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Wednesday, January 28, 2009
Administration proposals to close FY09 budget gap
By News Release @ 5:43 PM :: 2960 Views

January 27, 2009

(The following letter from Budget and Finance Director Georgina Kawamura were sent to Senate Ways and Means Chair Donna Mercado Kim and House Finance Chair Marcus Oshiro yesterday afternoon. The letter outlines proposals for closing the FY09 budget gap.)

I would like to confirm the following information which was discussed during our telephone conversation on January 26, 2009 concerning the possibilities for closing the budget gap in FY 09:

1. There is strong indication that Hawaii will receive $31 million in additional federal reimbursements for Medicaid expenditures in FY 08. The funds are expected to be received prior to the end of FY 09.

2. We are proposing to increase the amount of rainy day funds to be appropriated from the Emergency and Budget Reserve Fund to $60 million for FY 09, an increase of $20 million as compared to a previous plan. This action is proposed in Senate Bill No. 882, making an emergency appropriation for the Department of Human Services to address the budget shortfall.

3. Under current law, excess balances above a certain amount in the Public Utilities Commission Special Fund (Section 269-33, HRS) and the Unclaimed Property Trust Fund (Section 523A-23.5, HRS) are lapsed into the General Fund at the end of each fiscal year. The excess amounts for FY 09 are projected to be $7 million from each fund, resulting in a total of $14 million.

4. Additional budget restrictions of 2% on general fund discretionary expenses of Executive Branch departments and agencies in FY 09 will be implemented and are expected to generate a total of $16 million in savings.

The combination of the above will provide $81 million in additional revenues to the General Fund in FY 09 and produce a balance of $5.4 million in the Fund on June 30, 2009.


Georgina K. Kawamura, Director of Finance

cc: Honorable Colleen Hanabusa, Honorable Linda Lingle


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