The “No Alternative” Budget

Links: Summary | Graph 1 | Graph 2 | Graph 3

Downloads: Complete Report | Spreadsheet | Spreadsheet 2

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Senate Minority “No Alternative” Budget

This budget was created by taking Governor Linda Lingle’s projected budget which served as the base from which Governor Neil Abercrombie, the House Finance committee, and the Senate Ways and Means committee used to create their respective draft budgets. This “No Alternative” budget was produced through careful examination of Governor Abercrombies’s Executive Supplemental Budget worksheets, the budget worksheets available from the House Finance committee for House Bill No. 200 H.D.1, and previous Budget Acts from two prior bienniums.

The intent of this budget is to explore methods of relieving the State from its current spending shortfalls, defining a plan that will permanently address the serious issue of wasteful government over-expenditures, and allow an opportunity for growth of the private sector.

Unlike current budgeting options, this budget does not use tricks of delaying the payment, repayment, or rightful return of certain moneys. It does not require lawmakers to raid special funds, even if the intent is to repay the balance in a few years. It does not require any new taxes, nor does it require lawmakers to increase current tax rates. It does not introduce new fees for which the revenue will not be made readily transparent to the public.

Instead, the “No Alternative” budget aims to create transparency within government and foster a culture of efficient government spending while promoting an understandable level of service.

This budget was created from the ground up. The structure was provided by our current budget system. It began its life with only the core programs. Core programs are defined as the bare essentials needed to maintain a government that supports the average taxpayer. While many may not agree as to what the core programs are, research evidence supports a list of services that would continue to exist in the event of a major county and/or national crisis.

The following are the core City and County of Honolulu items. These are items that would remain in service in the event of a county-wide government shutdown:

• Honolulu Police Department
• Honolulu Fire Department
• Honolulu Department of Environmental Services (waste water, sewage, trash)
• Honolulu Department of Emergency Management
• Honolulu Emergency Services Department
• Honolulu Transportation Services Department (traffic control).

The following are the core items of the Federal Government. These are items that would remain in service in the event of a nation-wide government shutdown:

• Providing for the national security, including the conduct of foreign relations essential to the national security or the safety of life and property
• Benefit payments and the performance of certain contract obligations
• Medical care of inpatients and emergency outpatient care
• Conducting activities to ensure continued public health and safety, including safe use of food, drugs and hazardous materials
• Air traffic control and other transportation safety functions
• Border and coastal protection and surveillance
• Protection of federal lands, buildings, waterways, equipment and other property owned by the United States
• Care of prisoners and other persons in the custody of the United States
• Law enforcement and criminal investigations
• Emergency and disaster assistance
• Activities that ensure production of power and maintenance of the power distribution system
• Activities essential to the preservation of the essential elements of the money and banking system of the United States, including borrowing and tax collection activities of the Treasury
• Activities necessary to maintain protection of research property.

Based on the above, the Senate Minority Caucus has determined what the core items are for Hawaii State government.

The “No Alternative” budget is intended to be a sustainable plan and therefore requires additional non-core, high-priority, as well as a significant amount of non-core, low-priority items to be included. This budget only reflects a version of the operating budget for the State and does not include capital improvement appropriations. The main focus of the “No Alternative” budget is on general fund spending, cuts, and savings.

Some of the key features of the “No Alternative” budget include:

• Restoration of furlough reductions to certain programs, with the emphasis on those that provide transparency of government operations and spending, increase government efficiency, and promote business growth in Hawaii, in particular small business growth.
• The maintenance of the Hawaii Hurricane Relief Fund, the so-called “rainy day” fund, and the Tobacco Relief Fund, none of which were raided, or “borrowed” from.
• The “No Alternative” budget does not require a cut in pension benefits, health care benefits, or other retirement benefits as is proposed by other groups.
• All losses of federal stimulus funds are properly taken into account. The “No Alternative” budget does not aim to make up those losses in funding by substituting general fund money.
• Certain programs were consolidated in order to increase the efficiency of each state employee
• Some additional line items were added for accounting purposes.
• A gain of certain federal funds, funds that do not require significant amounts of general fund money to meet matching requirements.
• No salary or pay raises for public employees.
• A very limited amount of new positions added.
• A focus on the safety and welfare of the young, the old, and the physically or mentally challenged.

It is important to note that the Ways and Means committee has voted and passed a Senate draft of HB 200 HD1. At the time the “No Alternative” budget was drafted, the Senate draft of HB 200 was not available for examination online. Therefore, the data does not currently compare to the Senate Draft. However, the numbers, as presented by the WAM Chair, differ only slightly with the House Finance’s draft. The SD1 version of HB 200 has since been made available to the public at the state Legislature’s website.

The “No Alternative” budget considers conservative measures, which may be agreeable to many. There are additional places that could be examined to find savings; however, it would be difficult based on the public information that is available. Therefore the “No Alternative” budget represents a fair deal that one could create without having access to any non public information.

Ultimately, the “No Alternative” budget reflects the voice of the people, and mimics spending and savings trends of the average household in Hawaii’s tight economy. Since the “No Alternative” budget is projected out for two years, it is likely that it will experience a significant decrease in overall deficit with the possibility of a surplus depending on the nature of the economy and the pace of its recovery.

Below are two tables that include a summary of the budget for each respective draft. Included are only a few of the means of financing which account for most of our State operating budget. The first table represents the next fiscal year, and the second represents the fiscal year following.

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