Error Decreases General Fund Balance

The State is in a bigger financial hole after the Govenor's office reported a negative $44 million discrepancy to the Fiscal Year 09 general fund balance. The discrepancy was due to errors in the recording of tax revenues collected.

$98 Million Budget Shortfall to Trigger More Spending Reductions for State

The Hawaii State Council on Revenues predict that tax collections this fiscal year will decline by another 1.5%. The resulting decline would expand the state budget shortfall by another $98 million to at least $878 million by June 2011.

Governor Linda Lingle and other state leaders are trying to find more ways to balance the budget in light of the new projection. Nine-hundred non-union employees in the ex-ecutive branch will be taking a three-day furlough starting September 16. Meanwhile contract negotiations between the state and public worker unions are still being worked out, with binding arbitration set to begin tomorrow.

Already several state programs and operations have been or will be cut. These include the Kulani Prison Camp on the Big Island, the State Film Office, several positions within the State Dept. of Human Services, library hour cutbacks, and the closure of Wailupe Elementary School. More spend-ing reductions and adjustments are coming.

Meanwhile all cards are once again on the table say vari-ous legislative and labor leaders. While no special session is planned to tackle the budget crunch this year, some leg-islators are leaving options open including a general excise tax increase and diverting all of the hotel room tax reve-nues to the state. The same legislators know that increas-ing the tax burden is bad for business and everyone else.

I will continue to vote against all tax increases and seek to find solutions to the crunch by reducing spending.