Key Senate and House conferees today 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 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:
$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
$800,000 for additional funding to mitigate charter school commission costs.
$134,802 for charter school per-pupil allotment
$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.
$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.
4 positions and $96,309 for the pesticides branch.
$5.5 million for foster care payment rate increase.
$200,000 for Hawaii Health Information Exchange for Medicaid services.
$500,000 for the REACH program.
$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.
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.
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.
The Senate Committee on Ways and Means and House Committee on Finance today convened its first conference committee to negotiate the supplemental state budget. Ways and Means Chairman David Ige issued the following statement:
"Like last session, we wanted to take prompt action to allow ample time during conference to work with the House Finance Committee and ensure that we end this session with a balanced budget," said Ige. "Last session we made the decisive, thoughtful, and fiscally responsible decisions needed to cut $254 million from the administration's requested expenditures. At the beginning of this session, my counterpart in the House and I predicted the downgrade in revenue projections, which were confirmed by the Council on Revenues, and proactively prepared for this forecast by taking a conservative and responsible approach toward this supplemental budget."
Budget conference committee will resume on Thursday, April 17 at 3:30 p.m. in room 309 of the Hawaii State Capitol.
Following lower tax revenue projections, the Senate Committee on Ways and Means today passed a fiscally responsible HB1700 HD1 SD1, the supplemental appropriations act of 2014, which includes less spending while continuing to support education, health, human services, the environment and public safety. The bill adjusts appropriations for the operating and capital improvement budgets of the Executive Branch for Fiscal Biennium 2013-2015.
Compared to the Governor Neil Abercrombie's budget proposal, for FY2013-2014, the Senate's version of the bill reduces all funds by $46.1 million, inclusive of a general fund reduction of $45.8 million. For FY2014-2015, the bill reduces all funds by $167.9 million, inclusive of a general fund reduction of $158.7 million.
"As we did last year, the Senate displayed fiscal restraint. Given weak revenue projections, we made smart policy decisions by taking a conservative and responsible approach to the supplemental budget," said Sen. David Ige, chair of the Senate Ways and Means Committee.
On March 11, 2014, 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.
The bill does not include funding for certain administration requests that are intended to be funded under other appropriation measures, including joint majority package bills. Sen. Ige said that these reductions should not be counted as actual "savings." The reductions include $33.5 million for the UHPA salaries, $1.0 million for the Hawaii Invasive Species Council, and $4.9 million for Kupuna Care and other senior citizen programs.
"We wanted to take prompt action to ensure that there would be enough time in conference and continue discussions with our counterparts in the House," added Ige.
The following are major general fund appropriations included in the Senate version of the bill:
Department of Education
$15.0 million for the weighted student formula;
$2.0 million for the Strive HI school performance improvement system;
$2.0 million for student athletics.
Office of Early Learning
$5.7 million for early learning pilot projects, including the pre-kindergarten and family child interactive learning projects.
Department of Human Services
$3.0 million for Preschool Open Doors;
$1.5 million for Housing First; and
$5.5 million (plus $2.9 million in federal funds) to adjust to the monthly foster families board rates.
Department of Health
$3.2 million for home and community based services waiver for the developmentally disabled; and
$1.2 million for early intervention services contracts for infants and toddlers.
Hawaii Health Systems Corporation
$4.5 million to replace lost federal funds.
Department of Land and Natural Resources
$1.5 million for the Conservation and Resource Enforcement Unit.
$2.5 million (plus $1.0 million in special funds) for the watershed program;
$100,000 (plus $3.9 million in special funds) for the bid to host the International Union for Conservation Congress in 2016
Department of Public Safety
$2.0 million in program costs, which may be used at the discretion of the Department for such programs as the justice reinvestment initiative;
$786,718 for mental health care positions; and
$519,860 for suicide/hospital watch positions.
University of Hawaii
$5 million and 89 positions for the University of Hawaii, West Oahu;
Adding $47 Million and $9.2 Million in revolving fund for various programs for UH Manoa;
$9.3 Million in special funds for various programs for the University of Hawaii, John A. Burns School of Medicine;
$2.0 Million for various programs at UH Hilo; and
Adding 50 positions for community colleges
The following are Capital Improvement Project (CIP) highlights:
Department of Education: $638 million
University of Hawaii: $625 million for College of Pharmacy, restore health and safety funding, provide repair and maintenance funding
Department of Transportation
Reduced funding in all areas for new project, plus additional appropriations to existing projects
Revenue bonds reduced by $430 million from executive request
Federal funds reduced by $220 million from executive request
The Senate Committee on Ways and Means today advanced an amended version of Senate Bill 2609, a measure that would incrementally increase Hawaii's minimum wage from $7.25 to $10.10 by 2017.
The changes to the measure reflect the committees desire to strike a balance between concerns from advocates on both sides of the issue to ensure lawmakers craft a responsible bill that boosts the minimum wage while not hampering small entrepreneurs.
"Since last session, I have been in support of a minimum wage increase and have been working toward an accord. We're at the midpoint of the legislative session and there are several moving vehicles and ideas for lawmakers to consider," said Sen. David Ige, chairman of the Senate Ways and Means Committee. "I'm committed to ironing out the differences in opinion on this very important policy issue and am hopeful that we can strike a balance between all stakeholders so that we can come to an agreement by the end of the session."
Senator David Ige, with prior concurrence from Sen. Clayton Hee, chair of the Senate Judiciary Committee, recommended the following amendments to the measure:
Delete the provision for authorizing the Department of Labor and Industrial Relations to adjust the minimum hourly wage to the nearest 5 cents based on the Honolulu region consumer price index
Delete the repeal of the tip credit
Add a blank amount tip credit
These amendments will allow lawmakers to further the discussion, consider new proposals such as a "poverty threshold" to help protect low-income workers, and work out specifics on the amount of the tip credit.
All but one committee member voted to pass SB2609 out of committee. While discussing the recommended changes to the bill, colleagues acknowledged Ige for his work to "strike a balance" and thanked all advocates in the hearing room for their patience and participation in the legislative process.
The measure will now go to the Senate floor for third reading where, if approved, will then move to the House for consideration. Senators are expected to take this bill up during a full floor session on Tuesday, March 4.
Senate Committee on Ways and Means advance measures before the First Decking deadline on Friday, Feb. 28. (Photo Courtesy of Hawaii Senate Communications Office)
The Hawaii Senate Committee on Ways and Means today favorably passed Senate Bill 2598, a bill that would establish the Hawaii Commission on African American History and Culture.
African Americans first arrived in Hawaii in the 18th century and have since positively influenced the development and culture of Hawaii. However, their contributions are neither well known nor preserved. By establishing the Hawaii Commission on African American History and Culture, the people of Hawaii gain a fuller understanding of the cultural exchanges between the state and African Americans.
"Establishing the Hawaii Commission on African American History and Culture will allow us to honor the significance and impact of the African American experience in the state and promote awareness for Hawaii's diverse multicultural society," said Espero. "As Black History Month comes to a close, I am pleased that the Senate Committee on Ways and Means recognizes the significant contributions of African Americans in the state and the need to educate our citizens and visitors about them."
The bill will go to the Senate floor for third reading and is expected to cross over to the House for consideration.
The Hawaii State Senate's Committee on Ways and Means (WAM) today advanced bills that support Hawaii's keiki through a variety of education initiatives. If passed, the measures would restore funds to support school athletic programs, improve the learning environment for students and invest in Hawaii charter schools.
"Hawaii's keiki are our greatest resource and it's important that we give them every advantage for a better future," said Senator David Ige, chairman of the Senate Ways and Means Committee. "To do that, we need to invest in every aspect of their education from academics to athletics to their learning environment."
These measures will go to the Senate floor for third reading and if approved will move to the House for consideration.
The education measures passed today include:
SB2424 SD1: RELATING TO AIR CONDITIONING
Requires the department of education and department of accounting and general services, in consultation with the Hawaii state energy office of the department of business, economic development, and tourism and the Hawaii natural energy institute of the University of Hawaii, to develop a cooling master strategy and comprehensive study for the public schools and to report findings to the 2015 regular session of the legislature. Appropriates funds.
SB3083 SD1: RELATING TO SCHOOL ATHLETICS.
Appropriates general funds for fiscal year 2014-2015 for the school athletics program of the department of education. Authorizes additional coaching and assistant coaching positions for fiscal year 2014-2015 for the school athletics program.
SB2516 RELATING TO FACILITIES FUNDING FOR CHARTER SCHOOLS
Appropriates funds for the state public charter school commission to allocate to charter schools for facilities projects based, in part, on the need and performance of the charter schools. Requires annual reporting to the legislature.
SB2517 RELATING TO CHARTER SCHOOLS
Authorizes the state public charter school commission to request the issuance of general obligation bonds from the director of finance and to allocate the proceeds for the design, planning, construction, repair, and maintenance of public charter school facilities. Creates a working group to determine criteria for and to prioritize the allocation of general obligation bond proceeds to the public charters schools. Specifies that public charter school facilities funded through the proceeds of general obligation bonds are owned by the State. Requires the state public charter school commission to report annually to the legislature. Authorizes the issuance of general obligation bonds to the state public charter school commission. Repeals on June 30, 2024.
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