Senate Passes $11.162 Billion Budget Bill

The State Senate passed the $11.162 billion Supplemental Budget bill (HB 2012 HD1 SD1) 24 to 1 during the crossover voting session held in the State Capitol on Tuesday, April 10.

Senator Slom was the lone dissenting vote on the budget saying that there should be cuts in spending.

The House Draft of the State Budget shows that several areas take up whopping amounts of funding of nearly or more than $2 billion each — Dept. of Education ($1.824 Billion), Dept. of Human Services ($2.3 billion), Dept. of Health ($1.5 billion) and the Dept. of Budget & Finance ($1.82 billion), from which the Employeeʼs Retirement System (ERS) and the Employer-Union Health Benefits Trust Fund (EUTF) is administered.

The State Constitution mandates a balanced budget and like last year, this yearʼs budget will not be balanced without mandating cuts in spending or increased taxation, which I oppose.

The latest Council of Revenue projections from March 7 shows an optimistic growth in tax collections of 11.5%. The rosy projection is still short of the 14.5% used when the budget was submitted by the Governor. My office predicts single digit growth in tax revenue.

Stop the Spending: Hawaii’s Finances Need to Be Controlled

By State Senator Sam Slom
Originally published in HawaiiReporter.com
November 8, 2011

The 2010 Comprehensive Annual Financial Report (CAFR) showing the financial condition of the state government was just published, and it showed a substantial cost increase for medical services for state employees.

As Hawaii Reporter recently reported, “the 2009 CAFR shows an unfunded liability for the Employees Union Trust Fund of $7.2 billion and for the Hawaii State Teachers Association’s Voluntary Employees’ Beneficiary Association (VEBA) of $1.6 billion for a total of $8.8 billion (for July 1, 2007, even though the CAFR is for June 30, 2009). Whereas the 2010 CAFR details unfunded liability for the EUTF of $11.5 billion and for the Hawaii State Teachers Association’s VEBA of $2.5 billion for a total of $14.0 billion. (These numbers are for July 1, 2009.).”

This is an increase of 60 percent or $5.2 billion in just two years, largely because Hawaii has among the most generous health benefits in the nation, but we have to do what we can to get these growing costs under control.

Every year at the Hawaii State Legislature, I sponsored senate legislation to establish fiscal notes, alternative budgeting, reform for health care and changes for the public Employee Retirement System.

The Administration is content with lame efforts to ‘slow the growth of the deficit,’ and the lop-sided Democrat Legislature has thus far been unwilling to seriously confront this problem.

We are running out of time and we must act aggressively and decisively to change direction to save what is left of economic security for the taxpaying families we represent.

If you are diagnosed with terminal cancer, you can’t settle for slowing the growth; you must get rid of the cancer.

We have had several options to deal with this problem but have not had the political back bone to do it. It is clear that the trend is devastating.

The 2011 CAFR will be worse than 2010 and so on until we are unable to act.

Taxpayers must hold the 2012 legislature’s feet to the fire and be directly involved in next November’s election to remove those elected officials unwilling or unable to stop this fiscal cancer.

Nearly 200 Bills Become Law as Decision Deadline Nears

As published to Senator Slom’s Neighborhood Board Report to Kuliouou.

Governor Neil Abercrombie signed nearly 200 bills into law since our last report on this topic. Many of the bills that became law are those that I have opposed when they made their way through the legislature. Among the bills newly signed into law are the following:

Act 164 (HB 200): The $22 billion unbalanced state budget was signed into law as Act 164. I opposed the budget bill because it did not make the kind of deep cuts required to keep the state running without increasing the financial burden on the taxpayers. The Senate Minority offered an alternative budget during the 2011 session.

Act 163 (HB 1038): A major adjustment to the State Employees Retirement System (ERS) will increase the amount employees have to pay into the system and increases the years an employee is “vested” for retirement benefits. The retirement age also increases. The bill is supposed to address critical funding issues regarding the ERS.

Act 162 (SB 1328): Increase to the vehicle registration tax. I voted against this and all other tax and fee increase bills.

Act 165 (SB 1088): Extends unemployment insurance benefits and increases cost for business. Opposed this on final vote.

State Revenue Projection Remains the Same

No special session is scheduled to be held after the Hawaii State Council on Revenues chose not to revise their most recent economic forecast for 1.6% growth this year. Had the council downgraded their forecast it was highly possible that the State Legislature would have had to meet in special session to address the revenue shortfall by increasing taxes.

Senator Slom stated in a HawaiiReporter.com article: “I continue to believe our budget is not balanced and we have not emerged from the recession. There may be recovery for selected industries such as the visitor industry, but for the majority of businesses and families, it is still a difficult time. And the key indicator, private jobs, does not show up in the data. As the council itself said, the models are based on mathematics and subject to interpretation. My interpretation is that as long as the state continues its tax and spending policies, it will have a continuing adverse impact on recovery and any meaningful expansion. It also is interesting to note that the chairman even hinted that Hawaii may go into another recession in 2014.”

Senator Slom addressed the state budget shortfall earlier this year with a “No Alternative” budget that featured several deep cuts and no tax increases.

For Additional Reading:

Council on Revenues Won’t Change Economic Forecast, HawaiiReporter.com 5-27-11
Cash Outlook Standing Pat, Honolulu Star-Advertiser, 5-27-11
Senate Minority No Alternative Budget

End of Session Town Hall Meeting Video

Senator Slom along with State Rep. Gene Ward sponsored a Town Hall meeting in Hawaii Kai on Tuesday, May 10th. In the first clip, Senator Slom talks about the State Budget, taxes and more. The second focused on questions taken from audience members. Video by Michelle Van Hessen.

The Budget, The Budget, The Budget

Senator Slom talks about the State Budget bill (HB 200) at yesterday’s (April 12) crossover bill voting session.