Gov. Neil Abercrombie today unveiled a plan to spend $100 million dollars next year to pay down future obligations to state workers and retirees.
The problem is, the state's unfunded liabilities for state workers pensions and healthcare now stands at about $20 billion and is projected to top $37 billion over the next 12 years.
"To pay down this liability would require the state to put $500 million every year for 30 years," Abercrombie said in his State of the State Speech.
"This is a number impossible to meet."
But Abercrombie says the payment will send a signal that Hawaii is serious about avoiding the kind of fiscal crisis that forced some Mainland cities to slashed benefits to retirees and forced several into bankruptcy.
State Sen. David Ige, chair of the Ways and Means Committee, said he plans to introduce a bill requiring state will set aside even more money to tackle the looming problem.
"One hundred million dollars is not enough. That's why we're committed to finding a longer range solution," said Ige, (D), Pearl City, Aiea.
State Budget Director Kalbert Young said a move to reduce the state's unfunded liabilities will likely be seen favorably by the nation's financial markets.
Credit rating agencies are less likely to downgrade the state's bonds, which could help the state avoid paying millions of dollars a year in additional interest payments.
But state Sen. Sam Slom said he doesn't think the plan is realistic. He says fellow lawmakers are more interested in using the money for new social welfare programs than in fixing the state looming financial problems.
"It's a good idea. I laud the governor for that (but it's) not going to happen," said Slom (R), Aina Haina, Hawaii Kai.
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