Hawaii Senate Minority Proposes Alternative Budget That Saves Taxpayers $1.6 Billion

The Hawaii Senate Minority Alternative Biennium Budget for the fiscal years 2014-2015 reflects a decrease of $1.6 billion in total funding in comparison with the proposed Executive Budget and $1 billion in comparison with the proposed budget by the House of Representatives.

The budget proposal provides a specific plan that will make Hawaii’s government less expensive, and more effective, for our state’s taxpayers and small businesses.

The budget accomplishes the following 4 objectives:

• Does not rely on any current or future tax and fee increases to balance the budget.
• Reduces the size and costs of government through a combination of budget reductions, program consolidations and policy reforms.
• Provides a sustainable path to solve our problem with unfunded retirement benefit liabilities and to recapitalize our budget reserves.
• Leaves the state treasury with a projected general fund surplus of $741 million in FY 15 which could be used to lower the tax burden for our struggling taxpayers and small businesses.

Below are some highlights of the Hawaii Senate Minority Alternative Biennium Budget proposal:

REDUCING THE SIZE AND COST OF GOVERNMENT

The budget proposes the following:

• A total of $22.15 billion in biennial appropriations, representing a decrease of 7 percent in comparison to the Executive Budget and 4.7 percent in comparison to the House Budget (HB 200, HD1).
• $11.28 billion in general fund appropriations, which is 8.5 percent less in comparison to the Executive Budget and 6.2 percent less in comparison to the House Budget (HB 200, HD1).
• Reduces the number of fulltime appropriated positions in the executive branch by 1,052.
• Reduces discretionary general fund expenditures by $300 million in both FY 14 and 15.

REDUCING GOVERNMENT’S FOOTPRINT THROUGH BUDGET REDUCTIONS, PROGRAM CONSOLIDATIONS AND POLICY REFORMS

The Senate Minority Alternative Budget places emphasis on reducing government’s footprint by making government more sustainable through downsizing, reorganization, consolidation of functions, and using technology and modernization to operate more effectively.

These efforts include

• $163 million in biennial savings from removing budgeted positions that have been vacant prior to December 31, 2011.
• $96 million in biennial savings by discontinuing programs with a poor performance record and low impact on the community.
• $53 million in savings by consolidating various programs in the Departments of Health, Labor and Industrial Relations, and Transportation.
• The remainder of the savings is generated by reducing the appropriations for various administrative services within the University of Hawaii and the Department of Education.

In addition to these savings, the Senate Minority Alternative Budget includes a $60 million appropriation to upgrade the state’s outdated information technology systems.

PAYING OUR UNFUNDED LIABILITIES AND RECAPITALIZING OUR RESERVES

To provide a long-term solution to our state’s growing unsustainable share of non-service related general fund expenditures, the Senate Minority Alternative Budget proposes a long-term solution that limits the growth of discretionary programs to inflation and includes the mandatory pension payments in the state’s constitutional debt limit.

In addition to the proposed policy changes, the Senate Minority Alternative Budget also includes:

• $500 million in both FY 14 and 15 to prefund the Employer Union Health Benefits Trust Fund.
• $100 million in both FY 14 and 15 to recapitalize our Hurricane Relief Fund and Emergency and Budget Reserve Funds.

Due to the favorable economic projections made by the Council on Revenues and the fiscally prudent approach of the Senate Minority, the proposed budget is projected to generate a $741 million general fund surplus in FY 15, which could be used for a variety of tax relief initiatives such as completely removing the corporate income tax and reducing the tax rates for struggling taxpayers.

Read the full report here: https://senateminority.wordpress.com/issues/budget

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