State budget deficit violates constitution

By Brooks Baehr - bio | email

HONOLULU (HawaiiNewsNow) - State government ended fiscal year 2010 in the red. It is the second straight year Hawaii has operated at a deficit and by in doing so violated the state constitution for a second straight year.

State budget director Georgina Kawamura told the Senate Ways and Means Committee Tuesday the state generated $14.6 million more than it spent in fiscal year 2010, but because the year began with a $36.8 deficit (left over from FY 2009) the state actually finished the 2010 fiscal year $22.3 million in the hole.

The state constitution requires a balanced budget, but no one gets penalized when it is not balanced.

"I'm not sure what the framers of the constitution had in mind when they put that in," said committee chair Donna Mercado Kim.

The state would have finished FY 2010 in deeper debt if it had not deferred medicaid payments, delayed tax refunds, and other payments until after the fiscal year ended June 30. Those payments will be absorbed in the 2011 budget.

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