STAND. COM. REP. NO.726-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2300

H.D. 2

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 2300, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE JUDICIARY,"

begs leave to report as follows:

The purpose of this bill is to amend the Judiciary Appropriations Act of 2001 (Act 1, Special Session Laws of Hawaii 2001), that provided necessary funds for the operation and capital improvement costs for the Judiciary for fiscal biennium July 1, 2001 through June 30, 2003.

In deliberating on this bill and other bills that affect state finances, your Committee was faced with a number of major policy issues that limited its ability to fund the priority items of the House of Representatives. Although economic indicators suggest that the economy is growing and revenues are increasing, nevertheless, your Committee, took a prudent course in developing this budget.

In the days following the September 11th terrorist attacks, Hawaii felt the direct effects of the economic catastrophe that inevitably followed. The suspension of air transportation and the subsequent drop in visitor arrivals effectively stalled the momentum of Hawaii’s economy. Many people found themselves struggling to support their families. The state unemployment office was flooded with new claims. Providers of service for the hungry and homeless found themselves overwhelmed by requests for help. As Hawaii mourned with the rest of the nation for those lost in the attacks, we also experienced the pain and need in our own community as the damage rippled outward from the tourism industry to impact other sectors of our economy.

The Council on Revenues estimated the projected growth rate for this current fiscal year at –0.7 percent or a loss of $315 million in the current biennium. This bleak forecast was echoed in presentations by Hawaii’s noted economists at the start of the 2002 legislative session when the economists indicated that Hawaii’s economy had temporarily stalled.

Recognizing that the fiscal integrity of the State is fundamental to a sound and responsible government, the impact of changing economic conditions and other financial developments was closely examined by your Committee in developing the Judiciary’s Budget. As a consequence of the September 11th terrorist attacks, the slowdown of Hawaii’s economy and the Council on Revenues predictions, prudence dictates that all state agencies take a fiscally conservative approach regarding future expenditures and program expansions.

With this in mind, your Committee has asked that reductions be taken in order to balance the State Budget. The Judiciary has taken a reduction in the following areas:

    1. $1,116,220 in general payroll;
    2. $276,582 in purchase of services (all areas); and

(3) $224,708 for per diem judges (the equivalent of 2 full- time judges.

In addition, your Committee has provided funding for existing services through H.B. No. 2654, H.D.2. Included in this bill are:

(1) 59 positions and $2,509,245 in funds for rural Oahu

courthouses; and

(2) $2,315,914 further lump sum reduction in the Judiciary purchase of service;

Your Committee realizes that the above items provide essential services to the community including: rural community access to courts, sex offender treatment services, adult and juvenile drug treatment services, domestic violence services, and dispute resolution services. At the same time, your Committee has reduced the Judiciary’s budget by taking ten percent of the Judiciary’s vacancies totaling $414,725 and 9.5 unfunded vacant positions. Your Committee believes that, although difficult, the reductions are justified and constitute a proper course to follow.

Your Committee realizes the importance of the Judiciary as the third branch of government and has thoroughly reviewed the Judiciary’s $2.6 million in supplemental requests. However given the current fiscal situation, your Committee was only able to grant $38,592 toward the funding of the Judiciary’s portion of risk management.

Although the current situation seems dire, it should be noted that there are positive signs that Hawaii and the nation’s economy will recover quickly. While the Council on Revenues predicted a shortfall this year, it also forecasted future revenue projections at an average 5 percent increase each year over the next four years. Meanwhile, recent Department of Business, Economic Development, and Tourism figures for March even more concretely demonstrate the resiliency of our State’s economy. Given these strident steps toward recovery, your Committee finds that the apparent temporary nature of the crisis dictates an extension of the mindset established during the Special Session of 2001: We are all in this together and we must persevere to do what it takes to address immediate and essential needs.

Your Committee recognizes that most of the Judiciary’s supplemental requests are needed and justified and has taken these requests into consideration. However, your Committee is unable to approve any requests other than risk management at this time. Your Committee will continue to monitor revenues and consider funding requests during Conference as revenues allow.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2300, H.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 2300, H.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT Y. TAKAMINE, Chair