HONOLULU (HawaiiNewsNow) - Gov. Neil Abercrombie today announced that the State of Hawaii ended fiscal year 2013 with a positive fund balance of $844 million. The state's positive balance marks a $1.1 billion turn-around since the Governor took office.
The announcement was made before a group of business executives at a Chamber of Commerce of Hawaii luncheon where he and Finance Director Kalbert Young outlined the state's fiscal situation and economic outlook. (View the presentation, "Hawaii's Fiscal and Financial Condition," here: http://governor.hawaii.gov/wp-content/uploads/2013/12/Hawaii-Fiscal-and-Financial-Condition-2013.pdf)
"Well, you can call it a surplus, but it's not as if there's 844 million extra dollars around," the governor told Hawaii News Now. "What it means is we can pay our bills, meet our expenses and be in the black."
Those bills include the state pension system, health cared for government retirees, and re-filling the state's reserve funds, which were depleted after the Great Recession that began in 2008.
"We're going to have cash reserves so that we don't have to find ourselves as we did when I came into office, having to raid the hurricane fund and the rainy day fund and our reserve funds just in order to pay our bills," Gov. Abercrombie said.
The governor's office said that "difficult but necessary financial control measures" enabled the state to gradually increase its ending balances every year since the start of the administration. It also said that "affordable and sustainable contracts were negotiated with the majority of public workers."
The state also recapitalized reserves for the rainy day and hurricane relief funds in the amount of $211 million. It also restored government services such as agricultural inspections.
Standard and Poor's said that as a result of the stronger budget performance, there's a chance that Hawaii will receive a higher bond rating in the next two years. That would allow the state to borrow money for big projects at lower interest rates.
Of course, a lot of people will want a piece of the so-called surplus. But the governor said his priorities will include schools, airport infrastructure and developing renewable energy. He won't give more specifics until he releases his supplemental budget request in ten days.
"We're not gonna go backwards and say this is here for one interest or another to scoop up," said the governor. "That's what happened before. We have to meet our obligations."
The governor's office also announced that on Nov. 21, the state successfully completed the sale of $860 million of tax-exempt and taxable general obligation bonds.
"Due in large part to the state's current and projected fiscal position, as well as its recently formalized commitment to addressing its retirement liabilities, we see Hawaii's credit quality poised to strengthen," said Finance Director Kalbert Young.
"This year's successful bond sale is the latest reflection of investor confidence in the State of Hawaii," he added.
"The better things get, the shorter memories sometimes become. Just three years ago, our state had a less than favorable rating and faced a dire financial situation. We have accomplished much in a short period of time. The difficult decisions we made are now paying off," he said.
"We will continue to responsibly manage the state's fiscal affairs in order to grow our economy and provide quality government services to the people of Hawaii."