Despite progressive lawmakers’ objections, governor cuts half a billion from state spending plan

HONOLULU (HawaiiNewsNow) - With a few strokes of his veto pen, Gov. Josh Green has rewritten parts of the state budget and several other pieces of legislation — to find over $500 million to cover a deficit in the state financial plan.

The action angered progressive lawmakers, who say a historic tax break approved this year unnecessarily benefits higher income families and unbalanced the budget.

Wherever you stand on the issue, there’s little doubt that keeping track of this session’s $10 billion budget and other spending bills has been a rollercoaster. First, there was fear of a wildfire budget crisis then a major tax cut and now a dramatic cutback through the governor’s vetoes.

On Monday, the governor estimated the budget was about $300 million short of being balanced and pledged to “cover” the shortfall.

That shortfall was fixed, he said, by vetoing a bill that would put $300 million more in the rainy day fund and another $135 million that was due as an advance payment for state worker pensions.

The veto meant that money would remain in the treasury while leaving $1.5 billion in the rainy day fund and leaving a $300 million carry-over surplus to ensure low borrowing rates for state bonds.

But former House Majority Leader Della Belatti said the governor’s veto message includes many more millions in cuts.

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“There is a shell game,” Belatti said.

“We need to ask the tough questions, how much money are we getting? What are the correct projections, and most importantly, what are the important things we have to prioritize?”

Belatti and other progressive lawmakers, Amy Perruso of Wahiawa and Jeanne Kapela of S. Kona and Keaau, were upset the cuts include $10 million from invasive species programs and to the capital improvement budgets for construction and repair of libraries, schools, the university and community colleges.

The Governor’s office said the cuts to cash spending for schools construction were small compared to the overall schools construction budget, which is funded primarily and typically by borrowing through General Obligation bonds. The office said the agencies had more than enough to complete the projects they had planned.

In all the cuts to cash spending amounted to less than one percent of the budget, the governor’s office said. But lawmakers who focused on the cash cuts were upset.

“To reduce the funding available for biosecurity in this time of high urgency for communities, I think, is irresponsible,” Perruso said.

But the governor said program cuts were to areas where the money was not likely to be spent anyway because it was either not needed or would lapse before it could be committed.

“We won’t even be able to implement those programs we don’t even have the capacity to do it,” he said. “Those appropriations could not be executed over the course of this year.”

The governor also defended the tax cuts the progressive lawmakers blamed for the need for spending reductions. They say legislative leaders rushed the cuts without knowing their full cost.

“When we choose to benefit and put the wealthy above the benefit of our local schools and access to higher education, then it’s communities like mine on neighbor islands that suffer the most,” Kapela said.

But Green denied tax cuts caused the shortfall because they didn’t take effect this fiscal year. He called the lawmakers criticism hypocritical.

“First they want affordability and tax equity, and I give it to them, and then they complain that the budget isn’t adequate,” Green said.

The Governor’s office said overall the budget and spending bills are generous compared to prior budgets.

Belatti countered, “I think we are cutting core services at a time when we’ve just given away quote, unquote, historic tax cuts.”

The governor said if those programs really need the money, lawmakers convene again in six months and can reappropriate the funds.

He called some of the cash appropriations “false appropriations” meant to pad the budget with popular spending that lawmakers can point to in campaigns, that in the end actually does not get spent.

He said he spent 14 years in the legislature and knows the “games.”