HONOLULU (HawaiiNewsNow) -- "Simply balancing the budget doesn't get Hawaii back on track," Gov. Linda Lingle told Senate lawmakers Thursday.
In presenting an updated financial strategy for the next six years, Lingle told members of the Senate Ways and Means committee that creating good paying jobs is vital.
"Job growth is not happening quickly enough," she said. "We have some very positive proposals before the legislature in order to create new jobs in the private sector and the legislators need to be supporting that."
Lingle proposes a 5.5 percent reduction in government workers salaries in fiscal 2012 and 2013 and trimming the state's Medicaid payments.
"Those are the two largest cost savings in this financial plan is the pay reductions and the healthcare benefits that we pay out to the people who rely on government," said Lowell Kalapa, president of the Tax Foundation of Hawaii.
Lingle's plan puts off expenses to a future date when she believes revenues will start to improve.
To get people off unemployment she wants government to help employers pay health insurance for up to 6,450 new hires.
"The number 6,450 was chosen because it represents the equivalent of bringing down the unemployment rate by one percentage point," she said. "If we have seven percent unemployment in the state, this would bring it down to six percent."
But the bottom line is cost savings.
"What doesn't appear to be factored in is how every one of these money saving issues is going to have a compounding effect on those who are the most vulnerable as needs continue to go up," said Alex Santiago of PHOCUSED, an alliance of social service providers..
"We can't sustain government at the level it is now." Lingle said. "Our two biggest costs are labor and Medicaid and there has to be some reduction in those costs over time."
She told lawmakers her plan is based on assumptions and no one has a crystal ball.