Abercrombie Company Will Ask Lawmakers

Gov. Neil Abercrombie today released a budget request for the second year of the state’s two-year budget cycle that would increase state spending by $188 million, bringing the state budget to $11.1 billion, up from $10.9 billion.
The governor’s request is a 1.7 percent increase over the fiscal year 2013 budget approved by lawmakers and the governor earlier this year. State spending for fiscal year 2012, which ends in June, is $11 billion.

Abercrombie asked lawmakers for about $120 million in new general fund spending, but the request is offset by about $85 million in savings, so the net increase would be about $35 million. The new spending includes money for welfare, public-school transportation, public-school weighted student formula, health care for the poor, and child protective services.
“This is a balanced budget with no tax increases,” Abercrombie said at a news conference at the state Capitol.
Abercrombie’s request also includes a $1.2 billion increase next fiscal year for capital improvement projects, which would bring the state’s construction budget to $2.2 billion
The governor’s request is based on 14.5 percent revenue growth for this fiscal year projected by the state Council on Revenues. If the projection holds, the state is expected to have a budget surplus.
Abercrombie outlet will ask lawmakers to use a portion of the proceeds from a recent state bond sale to replenish the state’s rainy day and hurricane relief funds, which the governor drained to get through the last fiscal year.
State House and Senate lawmakers will review the governor’s supplemental budget request during the session of the state Legislature that opens in January.
That’s the message from Gov. Neil Abercrombie and the state’s budget chief Kalbert Young.
With an aggressive tax revenue forecast in hand, Abercrombie has proposed adding $189 million to next year’s existing $10.9 billion operating budget. The governor made clear at a news conference Monday afternoon that no tax hikes would be needed to pay for the added costs.
The spending increase includes nearly $120 million in additional expenses to the general fund, bringing the entire budget from all revenue sources to $11.1 billion for the year that begins July 1, 2012.
“This budget represents a very rational and reasonable budget submission that is accountable to balance without the need for additional tax revenues being proposed,” Young said.
The mood of the announcement was in stark contrast to last December, when theAbercrombie sale administration had to come up with a financial plan to address a forecasted $843 million shortfall for the following two fiscal years. That deficit later ballooned to $1.3 billion.
The plan introduced Monday is based on the most recent Council on Revenues forecast of 14.5 percent general fund growth. It will serve as the starting point for lawmakers when the Legislature convenes Jan. 18.
“We are in an excellent position today to move forward in this legislative session to deal with the policy issues that are before us, but to deal with it from a sense of confidence and security with regard to the fiscal foundation of the state,” Abercrombie said.