Ige’s budget staff makes $500M ‘clerical error’ in calculating projected shortfall

Published: May. 12, 2020 at 11:38 AM HST
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HONOLULU, Hawaii (HawaiiNewsNow) - During a news conference on Monday, Gov. David Ige acknowledged his budget staff made a financial miscalculation before he proposed 20% pay cuts for all state workers several weeks ago.

“We did make a clerical error in some of the earlier presentations,” Ige said.

Lawmakers believe the error was significant and amounted to a massive change in the projected budget shortfall, from about $1.5 billion to closer to $1 billion, according to state Rep. Sylvia Luke.

“They incorrectly inputted (economist) Carl Bonham’s numbers, so Carl Bonham projected 16% revenue loss in the first year and 8% gain in the 2022," Luke said.

"But they mistakenly put a negative instead of a positive, which exacerbated their financial plan.”

Bonham, the head of the University of Hawaii’s Economic Research Organization, is the one who caught the mistake, according to Luke.

House leaders have put together a package to fill the $1 billion gap, which includes tapping the $395 million in the so-called Rainy Day Fund.

More than $285 million is expected to be left over from this year, due to COVID-19 spending restrictions, and leaving vacant positions unfilled could add another $71 million.

Lawmakers also believe that by borrowing money using bonds, $270 million could come from the Rental Housing Revolving Fund and construction projects.

Some new programs would also likely be cut.

"They’re going to go after every last dollar that isn’t nailed down right now, to fill this billion dollar budget gap and take advantage of all this money from the federal government,” said HNN political analyst Colin Moore, an expert in public policy who says it’s clear that lawmakers came up with this package without the governor’s input.

Luke says the financial package would carry Hawaii through July 2021.

Ige did not say if he would support the House package, but did caution lawmakers about budget cuts without his administration’s approval.

Ige also disagreed with them that it would eliminate the need for widespread pay cuts.

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