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Lawmakers agree on fiscally responsible state budget bill

MEDIA RELEASE

Key Senate and House conferees have concluded negotiations on the state budget bill, agreeing upon and passing a fiscally responsible $12.1 billion budget for fiscal year 2014-15.

HB1700 includes funding for core services such as education, health, the University of Hawaii, human services, the environment, public safety, and supporting and caring for the lives of Hawaii’s people.

The bill now goes to the full Senate and House for a final floor vote.

At the start of the 2014 legislative session, the Senate Ways and Means committee continued to remain cautious about spending given signs of slower economic growth, which would mean hundreds of millions of dollars less than expected over the next two years.

Midway through the session, on March 11, the Council on Revenues reduced its projected general fund tax revenue growth, from 3.3 percent to zero percent in FY2013-2014 and 7.4 percent to 5.5 percent in FY2014-2015.

Combining this with the Department of Budget and Finance’s estimated reduction of general fund non-tax revenue growth, it’s projected that there will be a cumulative total of $491.8 million less in general funds over the current fiscal biennium.

Through prudent money management, and in order to reflect the weak economic forecast, lawmakers reduced Gov. Neil Abercrombie’s executive budget request by $173 million in general funds over fiscal biennium 2013-15.

The governor’s $200 million budget request for FY2015 was significantly cut down to $65.7 million.

Funding for capital improvement projects amounted to just over $5 billion, of which $2.3 billion is funded in general obligation (GO) or reimbursable bonds. This number includes the lapse and reauthorization of $339 million in GO Bonds for the State Educational Facilities Improvement (SEFI) Fund.

The budget includes $40 million for grant-in-aid (GIA).

“Although we are in better, yet cautious, economic times than past sessions, this year we were faced with many challenges, including lower revenue projections announced midsession,” said Sen. David Ige. “My colleagues in the Senate and I worked diligently with our counterparts in the House to take this into consideration and balance the state budget through a financially responsible approach.”

“This is a budget that we can be proud of because we were able to balance the interest of the community with the availability of funds,” he added. “HB1700 emphasizes the Senate’s commitment to public school education, the Department of Education and the University of Hawaii. The biggest winners this session are our keiki. We invested money in the weighted student formula, athletics, the Strive-HI program and UH collective bargaining agreements, among others.”

“One might have thought that assembling the construction budget in better economic times would be easier than in the immediate past, but this has not been the case,” said Sen. Michelle Kidani, vice chair of the WAM Committee. “Despite challenges, we crafted the CIP budget prioritizing two essential goals: continue the progress begun over the last few years in renovating, repairing and maintaining existing state-owned facilities to utilize our current resources and reduce general fund expenditures in the future, and designate funds for projects needed to address future capacity needs and economic growth.”

“We funded major projects for the DOE and UH system, the Department of Health, the Department of Land and Natural Resources, and the Department of Transportation,” added Kidani. “Working with what we have, I think my colleagues and I did a good job in making smart financial decisions for our state and the people of Hawaii.”

Highlights of the budget include:

Education

$15 million for the weighted student formula, which are funds given to schools based on enrollment and other factors.

$2 million for school athletics.

$1.925 million for Strive-HI performance system, which was designed to measure and better understand school performance and progress, and to help tailor rewards, supports and interventions for school improvement.

$600,000 for the educator evaluation system.

$579,208 for the professional development management system.

$256,000 for teacher induction and mentoring program.

$200,000 for a contract with Teach for America.

$3 million for early learning through the prekindergarten program.

$9 million to cover the shortfall in utility costs

$592,000 in general funds for sabbatical leave for teachers
Charter Schools

$800,000 for additional funding to mitigate charter school commission costs.

$134,802 for charter school per-pupil allotment
Public Libraries

$685,000 for electricity budget shortfall in libraries statewide.

$200,000 to increase security services at libraries statewide.

$600,000 to maintain computers and other technological services offered by Hawaii State Public Libraries System to patrons.

Health

$5 million for the Hawaii Health Systems Corporation.

$2 million for the Hilo Medical Center primary care residency program.

$750,000 for Hawaii Health Information Exchange for operational and technical support.

University of Hawaii

89 positions and $4 million for the University of Hawaii West Oahu campus.

$1 million for community college outcome based funding.

$19.5 million in general funds for UHPA employees’ salary increases.

Increase of the special fund ceiling by nearly $46 million to support UH-Manoa campus operations and programs.

50 positions to support UH community colleges operations.
Agriculture

4 positions and $96,309 for the pesticides branch.
Human Services

$5.5 million for foster care payment rate increase.

$500,000 for the REACH program.

$200,000 for Hawaii Health Information Exchange for Medicaid services.

Environment

$577,000 for operating expenses for conservation and resources enforcement officers.

12 temporary positions and $800,000 for community fisheries enforcement units.

$100,000 in general funds and $3.9 million in special funds for the International Union for Conservation of Nature World Conservation 2016 Congress.

Public Safety

10 positions and $259,930 for hospital and suicide watch posts.

6 positions and $155,958 for hospital and suicide watch posts.

20 positions and $786,718 for mental health treatment at correctional facilities.

CIPs

HB1700 provides nearly $900 million to fund projects that continue the progress begun over the last few years in renovating, repairing and maintaining existing state-owned facilities to utilize our current resources and reduce general fund expenditures in the future.

Including:

$700 million for the Department of Education and $90 million for the UH system

Remainder allocated to hundreds of other projects, mainly in the Department of Health, DLNR and DAGS.

Major funding in the amount of $1.9 billion is provided to the Department of Transportation for highways, harbors and airports, including an additional $280 million for the new Mauka concourse at Honolulu International Airport.

HB1700 addresses future capacity needs and economic growth.

Including:

Funding for the much anticipated UH Hilo College of Pharmacy in the amount of $33 million.

Allied Health and Administration Building for the growing UH West Oahu campus at Kapolei in the amount of $28 million.

Following last year’s major investment in technology infrastructure, the budget this year includes an investment of $100 million in state and matching federal funds for Kolea, the new eligibility system for public assistance programs.

Collaboration Leads to $10M for Nonprofit Organizations

House and Senate budget conferees has funded more than $10 million in Grant-in-Aid (GIA) for nonprofit organizations on every island in the state. The appropriations were made as negotiators announced this morning that they have come to an agreement on House Bill 1700, the overall state budget.

The agreement culminated nearly two weeks of discussions on a wide range of issues such as education, invasive species protection, and support for statewide government services. HB1700 HD1 SD1 CD1 will now go before the full House and Senate for a final vote Tuesday, April 29.

“This year there was once again uncertainty over the amount of discretionary funding available for Grant-in-Aid,” said Rep. Ty Cullen (Royal Kunia, Village Park, Waipahu, Makakilo, West Loch), lead House GIA manager. “Fortunately, the House and Senate were able to put together a little over $10 million to support our local community and service groups, who assist a wide range of individuals within our community and are an integral part of our social safety net providing essential services for our state.

Lead by House Finance Chair Sylvia Luke and Senate Ways and Means Chair David Ige, the two sides focused on developing a balanced financial plan in consideration of the state’s downgraded revenue forecast. Coming into the session, the State was forecasted to see a sizeable surplus of $844 million. However, recent revenue forecasts have projected zero percent for this fiscal year, amounting to nearly half a billion less to spend in the next fiscal year.

Balance Plays Key Role Advancing Legislation Supporting People, Land

In the spirit of collaboration, House and Senate conferees struck a balance passing out several conference drafts that support the people of Hawaii and protect and preserve the land that they live.

“The Legislature for the third year in a row worked efficiently and effectively to end conference negotiations on time,” said Senate President Donna Mercado Kim. “In the past, certain bills required extending the deadline for negotiations. Efficiency is important to the Senate as we continue to do work for the people of Hawaii.”

Increasing Minimum Wage

Senate Bill 2609 will boost the income of Hawaii’s lowest paid workers giving them more money to spend and invest, increasing economic activity and growth, while allowing them to care for their families.

The final version of the bill increases the state’s minimum wage from $7.25 to $10.10 over the next four years.

For workers who earn at least $7 more than the minimum wage, businesses can deduct a 75 cents tip credit. The current tip credit is 50 cents.

“From the start of the session, the Hawaii State Senate has been committed to improving the lives of Hawaii’s people and raising the minimum wage is just one of the measures that will do just that,” said Sen. Clayton Hee, Judiciary Chair. “Raising the minimum wage is not only good for Hawaii’s people, it’s the right thing to do and makes good economic sense. My colleagues and our counterparts in the House worked tirelessly to work out differences and through compromise were successful in approving this much-needed piece of legislation.”

Preserving Hawaii’s Lands

House Bill 2434 will provide the $40 million needed to complete the agreement reached last week between the State of Hawaii, City and County of Honolulu, The Trust for Public Land, and Turtle Bay Resort (TBR) to establish a conservation easement on 665.8 acres of land at Turtle Bay Resort in Kahuku.

“The Senate has always been committed to funding this important conservation easement on the North Shore,” said Sen. David Ige, Ways and Means Chair. “This session and last, we advanced legislation funding the agreement, and were ready to include the $40 million in the state budget. I’m pleased with the result and thank those members who worked quickly and diligently to pass out this bill before the deadline.”

State Supplemental Budget

HB1700 includes funding for core services such as education, health, the University of Hawaii, human services, the environment, public safety, and supporting and caring for the lives of Hawaii’s people.

Through prudent money management, and in order to reflect the weak economic forecast, lawmakers reduced Abercrombie’s executive budget request by $173 million in general funds over fiscal biennium 2013-15.

The governor’s $200 million budget request for FY2015 was significantly cut down to $65.7 million.

Funding for capital improvement projects amounted to just over $5 billion, of which $2.3 billion is funded in general obligation (GO) or reimbursable bonds. This number includes the lapse and reauthorization of $339 million in GO Bonds for the State Educational Facilities Improvement (SEFI) Fund. The budget includes $40 million for grant-in-aid (GIA).

“Education was a real winner in this bill,” said Ige. “We were able to make key investments at every level ensuring that our students have the best access to quality education. We also made investments to protect our agriculture lands by adding positions to the pesticides branch in the Department of Agriculture, funded many key programs in other areas and closed on time with a balanced and fair budget despite challenges.”

JOINT MAJORITY PACKAGE BILLS

Supporting Hawaii’s Kupuna

HB1713 SD2 and SB2346 SD1 HD2 supports Hawaii’s kupuna through funding of aging, long-term care and investor education programs.

Protecting the Environment

HB1714 establishes an interagency sea level rise vulnerability and adaptation committee under the State Department of Land and Natural Resources.

The final joint majority package bill, HB1716, which appropriates $5 million to the Hawaii Invasive Species Council for invasive species prevention, control, outreach, research, and planning, passed out of committee earlier this month.

“The Senate and House members of the 2014 legislative session put forth a joint majority package that addresses the combined interests and priorities of our State and I am pleased that the remaining three bills in the package have made it out of conference,” said Senate Majority Leader Brickwood Galuteria. “These bills support the present and future of our state as it supports our kupuna and addresses the effects of climate change for our future generation. Here in Hawaii, we are lucky to live in a place that cherishes our culture, traditions and environment, and protecting those ideals is one of our duties as lawmakers.”

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