What has Abercrombie Done for Hawaii?

Aloha                  February 9, 2012

The Abercrombie administration is out doing itself! It is about to make its third error in its foolhardy decision to raid the States hurricane reserve fund.

The first error: The decision last year to raid the reserve funds. It was bad enough that the Abercrombie administration has put the state’s residents at risk by depleting a reserve fund that is meant to provide our residents with lifeline in the case of a natural disaster such as another hurricane. As an isolated island, separated from other continents by over 3,000 miles, when a disaster strikes, we need to rely primarily on ourselves and the reserve funds are intended to help us do so. This raid puts us all at risk. But what’s worse is that the Abercrombie administration broke a promise to the people of Hawaii that their money was to be dedicated for use in the event of a disaster. Instead, the Abercrombie administration raided those funds to pay for current government expenses.

The Republican administration of Governor Linda Lingle balanced every budget without raiding the hurricane fund.

The second error: As Budget & Finance Director Kalbert Young testified on February 3, 2012, before the State Senate Commerce and Consumer Protection Committee, the depleted reserved funds led to the downgrading last year of the State’s credit rating. This credit downgrading means that the State pays more interest on money it borrows. This second error compounds the first, by costing the State and its taxpayers more in interest costs.

The Republican administration of Governor Linda Lingle maintained and raised the State’s credit rating throughout its two terms.

The third error: Now, the Abercrombie administration wants to “replenish” the funds that were raided (acknowledging, it seems, its error) but with borrowed money. Sound public finance practice is that the money that governments borrow should be invested in roads, buildings, and other productive assets that enable the economy to grow and government to then pay back the loan. Money borrowed should not be used for current expenses and certainly not be “parked” in a reserved account on which government pays interest. This third error compounds the second error and costs Hawaii taxpayers more money.

The Republican administration of Governor Linda Lingle never used borrowed money to pay for current expenses. This Abercrombie administration’s “Triple-Error” puts Hawaii at risk for consequences of a natural disaster. Paying for this error will end up costing Hawaii taxpayers and families more money.

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Mahalo,

David Chang

Chairman

Hawai'i Republican Party