Top Hawaii Headlines: Thursday morning edition

State and union negotiators meet with one main goal in mind, to reach new government worker contracts without furloughs or layoffs.

Gov. Linda Lingle yesterday defended her furlough plans for state workers from an objection by the federal Social Security Administration.

Four employee unions and the state have fewer than two weeks to come to an agreement on how to cut $688 million n spending to ease the budget deficit.

Hawaii's congressional delegation is asking Gov. Linda Lingle to reconsider her decision to furlough state workers who are paid with federal funds, especially those who process claims for disabled residents and military personnel.

Hawaii County employees will avoid furloughs or layoffs threatened against their state counterparts under unprecedented action announced Tuesday by the state Council of Mayors.

Honolulu Prosecutor Peter Carlisle and City Council Chairman Todd Apo are seriously looking at the possibility of running for Honolulu mayor if Mayor Mufi Hannemann steps down to run for governor.

An Oahu grand jury indicted a tenured math professor at the University of Hawaii at Manoa yesterday for arson in a case that his colleagues call a tragedy reminiscent of the movie "A Beautiful Mind."

North Korea is reportedly preparing to fire a long-range ballistic missile toward Hawaii early next month.

Hawaii County residents spoke unanimously Tuesday -- this isn't the time to change council committee chairmanships and last-minute resolutions isn't the way to do it.

Puna Councilwoman Emily Naeole was made the council's new vice chairwoman on a 5-4 vote Tuesday following nearly eight hours of testimony, debate and bickering.

A friendly crowd filled an elementary school cafeteria Tuesday night to speak in favor of locating the Thirty Meter Telescope in Hawaii

Maui County Council members took steps Wednesday that could lead to the long-anticipated curbside pickup of residential recycling items such as glass, cans, newspapers and plastic.

The $1.8 billion question

A morning of festivities, food and laughter today masked a darker reality that became clear by mid-
afternoon – the economy is in a world of hurt, and state government is grappling to find a solution.

Even the festivities at the opening day of the 25th Legislature were on the cheap – student performers from area elementary, middle and high schools replaced the professionals that have entertained on the House floor in previous years. After all the hoopla, a joint House-Senate money committee grilled administration budget chiefs on how the state can work itself out of an anticipated $1.8 billion hole by 2011.

Speeches by House and Senate officers and majority and minority leaders stressed bipartisan cooperation. House Speaker Calvin Say called the $1.8 billion shortfall over three years the worst budget crisis he’s seen in his 32 years in the Legislature.

“We must make up this shortfall, and this will be our major challenge,” Say, D-St. Louis Heights, Palolo Valley, said. “Everybody has to be part of the solution.”

Senate President Colleen Hanabusa, D-Nanakuli, Makaha, hit many of the same notes in her speech.

“These are the times when we must say what we can do and what we will do,” Hanabusa said. “These are the times when we can no longer afford partisanship or politics as usual. Times when our obligation is to bring the service, vision, and leadership we were elected to provide. Times when we stop looking for political points and start looking for the solutions.”

The Republican minority pushed for togetherness as well. It was the Republican leader of House, not the Democratic one, who drew applause by congratulating Hawaii-born President Barack Obama on his inauguration the day before. House Minority Leader Lynn Finnegan, R-Lower Pearlridge,

Aiea, Halawa, went on to liken cooperation in government to the plantation creation of saimen, made when Chinese, Japanese, Filipinos and Portuguese workers threw their contributions into a massive stewpot to make enough food for a crowd.

“People of Hawaii, the future is now,” Finnegan said. “Tough times are here, but if we are committed to working together, we will forge a better tomorrow.”

Finnegan’s food analogy was carried into her office, where, like the other legislators, she threw the doors open to serve food to constituents. In Finnegan’s case, saimen was on the menu.

State budget down $125 million

The Hawaii Council on Revenues today confirmed some lawmakers’ worst fears – there’s about $125 million less to spend than they thought for the budget year that's already halfway over.

The $125 million must be cut from the FY 2009 budget that ends June 30. Forecasters hope the economy will turn around in time for a 1-percent increase in the FY 2010 budget, but they aren't making any promises.

The projected 3-percent decrease in state revenues for the current FY09 budget is a drastic drop from the 0.5-percent decrease forecast just a few months ago. A percentage point equals about $35 million in revenues.

The cuts are going to be painful, hitting those who need help most. Education and entitlement programs such as those administered by the Department of Health and Department of Human Services account for a whopping 78.4 percent of the state operating budget.

Council on Revenues Chairman Paul Brewbaker will brief legislative money committees on the details of the budget downturn at 2 p.m. Tuesday in the Capitol auditorium. The Council reports its latest revenue forecast to the governor and the Legislature on June 1, Sept. 10, Jan. 10, and March 15 of each year.

Governor Linda Lingle wasn't surprised by the news.

"The Council on Revenues’ decision to lower projections is not unexpected given national and global economic conditions, as well as other external factors beyond our control that are impacting Hawaii," Lingle said in a statement. "The lower revenue projections reflect the challenges we will face as a state in the next couple of years, and underscore the need for all of us to work together. "

Hawaii is certainly not alone, according to the National Conference of State Legislatures, which says only 12 states aren’t expecting budget shortfalls.

“These budget gaps are approaching those seen in the last recession, which were the worst since World War II, and show every sign of growing larger,” NCSL Executive Director William T. Pound said in a statement. "While the data we collected from state legislative fiscal officers are pretty sobering, our discussions with legislative leaders tell us that they expect the problem to only get worse.”

(This article was edited 1/13/09 for clarification following new information).

Grim budget news, times 10

Gov. Linda Lingle has proposed a budget that assumes the economy will dip only half a percentage point during the fiscal year that ends June 30. But lawmakers said Monday they’re expecting revenue losses to be 10 times that.

The House Finance and Senate Ways and Means committees held a combined informational session where the Republican governor’s budget director, Georgina Kawamura, briefed them on the Administration’s 2009-2011 spending plan. Briefings on specific departments continue through the week.

But the Council on Revenues, when it meets Friday, could render the current spending plans obsolete. Tax collections have been down 2.6 percent during the first five months of the fiscal year, and the year could end up down 5 percent over the previous year.

That would be $225 million less on a roughly $11 billion budget, compared with the $22.5 million the governor was working with.

If so, an administration spending plan that already cuts 14 percent of discretionary spending could be forced to slice deeper – much deeper.

Democratic majority lawmakers, as expected, had plenty of questions.

But several of them focused on Lingle’s restructuring of the state’s bonds to push about $300 million in annual debt payments eight years into the future, when she will no longer be in office.

“To me, it’s somewhat misleading,” said Senate Majority Leader Gary Hooser, D-Kauii, Niihau. “We’re just extending our debt.”

“We’re deferring it; we’re not saving it,” said Senate Ways and Means Committee Chairwoman Donna Mercado Kim. “We’re leaving it to the future to pay it … So it’s not a true savings.”

The Administration will do whatever is necessary to balance the budget, said Kawamura. It’s an ongoing process, she said.

“We cannot do it by cuts alone,” Kawamura said. “It is agony for us in regards to what we have to do every day to get a balanced fiscal plan.”

Lingle presents slimmed-down budget

HONOLULU – Salaries will be frozen and Healthy Start prenatal health care and adult dental care programs abolished, but no state employee would be laid off under a reduced spending plan unveiled today by Gov. Linda Lingle.

The $11.1 billion FY 10 and $11.3 billion FY 11 operating budgets are a 3.8-percent and 3.3-percent reduction, respectively, over the base budget. But Lingle said the numbers represent a 14-percent reduction in discretionary funding over the two-year period.

Lingle also plans to tap into special funds – taking $36 million from the Deposit Beverage Container Special Fund, $9 million from the Wireless Enhanced 911 Special Fund and $40 million from the Emergency and Budget Reserve Fund – in order to balance the budget. The Legislature must agree to emergency appropriation bills in order for her to tap into those sources.

Lingle said she’d met with legislative leaders earlier in the day to present her budget proposal. The Legislature will use the budget as a base for its own deliberations, but doesn’t have to give the governor everything she wants.

“The world has changed and our fiscal situation has changed dramatically. That means it simply cannot be business as usual,” Lingle said during a news conference to announce her proposed budget.

“I believe that we will emerge stronger than we are now,” Lingle added, saying that the grim fiscal picture offers “great incentive to work together” with the Legislature in a collaborative fashion.

Lingle’s proposed cuts are in addition to cuts of $40 million proposed by the Department of Education and $13 million by the University of Hawaii System. Those two departments, combined with Department of Health and Department of Human Services, account for a whopping 78.4 percent of the state operating budget.

In addition to cutting spending and tapping into special funds, Lingle said the state would increase revenues by refinancing debt and collecting more taxes. While there would be no tax increase, Lingle said the state could collect an additional $122 million by stricter enforcement of taxes on cash transactions and tightening Act 221 investment tax credits.

A fast-tracked $3 billion public works program will also stimulate the economy and contribute to a healthy budget, Lingle said.

Lingle proposes salary freezes

HONOLULU -- Gov. Linda Lingle plans to cut $4.1 million from the state budget by freezing top officials’ salaries for the next two years.

The salary freeze would affect 208 employees, including the governor, lieutenant governor, cabinet heads and deputies and justices of the Hawaii Supreme Court and all state court judges.

The administration employees are scheduled for salary hikes of 5 percent on July 1, 2009 and 3.5 percent on July 1, 2010. The justices and judges are scheduled for salary increases of 10 percent in 2009 and 3.5 percent in 2010.

Lingle will propose a bill in the 2009 legislative session to accomplish the salary freezes. The bill covers the positions recommended for increases in 2007 by the Commission on Salaries. The increases will go into effect automatically unless the Legislature takes action.

The bill also would suspend a 3.5-percent increase scheduled for all 76 state legislators for January 1, 2010. Additionally, Lingle is asking the Legislature to forgo the 36 percent ($12,808) salary increases lawmakers are scheduled to receive on Jan. 1, 2009. This would save an additional $486,704 in fiscal year 2009.

“…It is important that state leaders also make sacrifices and lead by example,” Lingle said in a statement. “At a time when many Hawaii residents are losing their jobs or seeing their salaries frozen or reduced, it would be inappropriate for state leaders to accept pay raises.”