MEDIA RELEASE

The Abercrombie Administration has submitted its 2013-2015 fiscal biennium budget to the Hawaii State Legislature with a renewed commitment to a proven fiscal strategy that has put Hawaii’s economy on track toward recovery.

The requests for general funds, approximately $6.1 billion for fiscal year 2014 and $6.3 billion for fiscal year 2015, include provisions that invest in Hawaii’s keiki, prepare for the future in areas of technology and the islands’ aging population, protect Hawaii’s watersheds, develop renewable energy resources, and for the first time begin to seriously address the state’s long-term liabilities associated with employee and retiree health benefits.

The budget also restores the 5 percent reduction in state employee wages, which was implemented following the worst recession in a generation.

“This balanced budget will build upon sound strategies that will continue to stimulate our local economy, while moving forward on IT transformation initiatives to better prepare Hawaii for an increasingly technological age,” Gov. Neil Abercrombie said. “We are also proposing significant investments in early education and health initiatives, as well as building an improved support system for our kupuna.”

The administration is requesting continued funding of priority capital improvement projects (CIPs) designed to improve the public infrastructure and the economic landscape, including the generation of local jobs.

Priority has been given to addressing needed repair and maintenance projects for public and educational facilities and ongoing CIP projects, which can begin construction quickly. Other proposed projects focus on addressing health and safety, and court-mandated or statutory requirements.

The requested CIP budget is approximately $1.7 billion in fiscal year 2014 and $906 million in fiscal year 2015 from all sources of funding, such as general obligation bonds and revenue bonds from self-funded enterprises.

More than two-thirds of the budget expansion over fiscal year 2013 are for items that are considered non-discretionary costs. These required expenditures include increasing costs for health and other post-employment benefits, debt service, Medicaid, pensions, risk management and workers compensation.

Approximately 63 percent ($278.5 million) for fiscal year 2014 and 70 percent ($437.1 million) for fiscal year 2015 are for these non-discretionary expenditures.

However, the state’s positive economic outlook and the administration’s fiscal prudence have afforded the opportunity to put into place several new initiatives for the benefit of the people of Hawaii while addressing fixed costs and long-term liabilities.

The administration’s commitment to investing in the people of Hawaii, growing a sustainable economy and making government more efficient and effective is reflected by investments in:

* Hawaii’s keiki, including early learning and early childhood health

* Preparing for the future through information technology transformation and providing a digital curriculum for Hawaii’s students

* Caring for Hawaii’s aging population by providing resources for kupuna care and the Aging and Disability Resource Centers

* Improving the state’s fiscal condition by providing modern and contemporary technology infrastructure that will give reporting transparency to the public and give government business managers the tools necessary to make better informed analysis-based decisions

* Sustainability and protecting the aina by maintaining Hawaii’s watersheds and developing renewable energy resources to reduce reliance on fossil fuels

* Stabilizing the state’s financial structure addressing increasing long-term fixed costs such as unfunded or underfunded liabilities for public employee benefits

“Our budget allows our state to make clear and deliberate steps in addressing unfunded liabilities that otherwise would continue to threaten our future fiscal solvency,” said Kalbert Young, director of the state Department of Budget and Finance. “Rather than leaving unresolved long-term commitments for the next generation, we are fulfilling our responsibility to deal with them now.”

Budget amount highlights include:

* Approximately $59 million per year for information technology initiatives and improvements

* More than $7.1 million in 2014 and $22.2 million in 2015 for digital curriculum for Common Core State Standards

* More than $9.6 million in 2014 and $35.3 million in 2015 for the Executive Office of Early Learning and early childhood education and health initiatives

* More than $5.6 million in 2014 and $5.9 million in 2015 for the Executive Office on Aging, Aging and Disability Resource Centers, and kupuna care programs

* More than $118.1 million in 2014 and $172.8 million in 2015 for health premium payments and other post-employment benefit pre-funding

“While uncertainties continue to loom on the federal level even this late into the calendar year, there is good reason to focus on Hawaii’s outlook as optimistic, even if moderated,” Abercrombie said. “Our fiscal plan has provisions in place should national events require them.

“There is much more work to be done but we are excited about Hawaii’s future. We have laid the groundwork for a stable foundation and commit our energies to making our Hawaii a place for all of us to prosper. Working together, we can make this happen.”

The budget will be available online at http://hawaii.gov/budget.