Lawmakers fear economic forecast will be bad news

The Maui News
Tuesday, April 29, 2003

By MARK ADAMS
Staff Writer

HONOLULU - With a final vote on the state budget scheduled for today at the Capitol, Maui lawmakers said all things considered, the county did pretty well in an austere year for spending.

But the legislators are also looking with trepidation at the May 9 date for the state Council on Revenues to announce its next quarterly forecast of how the Hawaii economy will fare in coming months.

Those forecasting the forecast are expecting a downward turn of 1 percent to 2 percent. If that proves to be true, it would translate into a $30 million to $60 million drop in general fund tax revenue lawmakers have counted on as they massaged the spending package.

"I'm very concerned," said state Sen. Shan Tsutsui. "I think when the war with Iraq first started and the tourism industry stayed strong, it gave people a false sense of security. But visitors make their plans to visit as far as 12 months in advance. I think we'll now see the effects on people who started planning at the beginning of the year."

Democratic Sen. Roz Baker said she is also afraid that the revenue forecast won't be good news. Adjustments to the budget that the Legislature finishes this week and sends to Gov. Linda Lingle will then have to be made. In a year filled with difficult choices for both lawmakers and Lingle, that could spell more bad news.

The lawmakers weren't sure exactly what process would be used if further budget cuts are needed.

"A 1 percent reduction would be $30 million. The governor may have to cut more or we'll have to go back into session and do it ourselves," Sen. Baker said.

State Rep. Brian Blundell said he has heard the Legislature will have to go back into session if a major shortfall arises, although the freshman Republican thinks the governor could handle making the cuts herself.

"I have a lot of trust in the governor, although I'm not sure the rest of my colleagues feel that way . . . I'm pretty sure they would want to come back."

Sen. J. Kalani English said it was the Legislature that restored $30 million to the $15.2 billion budget Lingle sent them in January after she revised the package left behind by outgoing Gov. Ben Cayetano.

"We restored $30 million in cuts to education and social services," English said. "It's only reasonable to think that's where the cuts will come from" if the governor ends up balancing the budget.

The senator agreed with Tsutsui that people in Hawaii have a false sense of security right now that may soon be stripped away.

Global financial markets haven't yet reached bottom, he said, and the Bush administration is in the process of shifting tax burdens to the middle and lower classes of society.

The SARS virus, which arose without warning, will also have an impact on tourism, English said.

"We have to be real cautious about how we proceed. There are so many factors involved," he said.

Turning to what is in the budget now and will hopefully survive intact, English, Baker, Tsutsui and Blundell all pointed to funding for an emergency air-ambulance helicopter serving rural Maui County as a major accomplishment of the 2003 legislative term.

English said it is a remarkable example of a partnership between state and county officials, with the Maui County Council and state House and Senate conferees all making decisions to fund the air ambulance on Friday.

"This is an absolute victory for all Maui, Molokai and Lanai residents," English said, praising his colleagues for supporting the bill.

Sen. Baker said she is disappointed that money to expand the South Maui ground ambulance service could not be found, but she noted that the helicopter's ground crew will be stationed in Wailea and available to serve the public when not occupied with an airlift.

Rep. Blundell, who represents West Maui, said he pushed hard for the bill in House Republican caucuses.

"I said to my colleagues, 'This is my bill,' " he said.

Baker chaired the Senate Health Committee and said several items of interest to Maui County await final passage today.

They include $750,000 to expand the number of dialysis stations at St. Francis Medical Center and a bill that sets up a funding mechanism for long-term health care by instituting a $10-a-month tax surcharge on state taxpayers.

The lawmakers said there is also a $25 million appropriation to build the planned Maui Lani Elementary School and an additional $18 million to add a fourth lane to Haleakala Highway, money to add a passing lane to Honoapiilani Highway between the pali and Olowalu, and $1.6 million to further work on a temporary Paia bypass.

Sen. English said several bills he introduced were consolidated into a health-care bill that allocates $700,000 for the Hana Community Health Center; $750,000 for Molokai General Community Hospital; $75,000 for the Maui AIDS Foundation; $90,000 for Hale Mahaolu; $50,000 for a community health outreach program on Molokai; and $50,000 for MEO buses.

He also was successful in getting several environment-based bills passed, including a tax credit for those using solar energy.

English said Maui's senators have begun working together on a regular basis like never before as difficult financial challenges face the state.

While it remains to be seen what happens to the final budget, English said the "snapshot in time" that existed Monday looked good for Maui County.

"Given the financial constraints this year, and the change in attitude toward fiscal management, Maui did extremely well," the senator said.

Return to Sen. English Home Page - KalaniEnglish.com

 

 

 

 

 

 

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