Report Title:

Appropriation; Emergency Budget and Reserve Fund

 

Description:

Fiscal Year 2009-2010 appropriation from the Emergency and Budget Reserve Fund in lieu of general funds for the health care payments program (HMS 401) to address the budget shortfall in fiscal biennium 2009-2011.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1065

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

MAKING AN APPROPRIATION FOR THE DEPARTMENT OF HUMAN SERVICES TO ADDRESS THE BUDGET SHORTFALL.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  Many unprecedented events have converged to create an economic, financial, and fiscal environment that threatens the very foundation of our national economy.  Problems that arose in the national housing sector and sub‑prime mortgage market last year have radiated from Wall Street to Main Street.  Across the United States, the result has been increasing business bankruptcies and closures, lower consumer confidence and spending, and job losses and rising unemployment.

     For state governments, the financial crisis and economic downturn have adversely impacted tax revenues and budgets.  Most states, like Hawaii, rely on income and sales taxes as their main sources of revenues.  The slowdown in employment and consumer spending has reduced state revenues nationwide at a time when operating costs continue to rise.

     Hawaii is experiencing a severe contraction in its visitor, retail, and construction industries.  As a consequence, the council on revenues has revised its revenue projections downward five times during 2008 and once again at the beginning of January 2009.  The cumulative effect of these successive reductions in revenue estimates for fiscal years 2008‑2009, 2009‑2010 and 2010‑2011 is a substantial decrease in the amount of general funds that the State can expect in the immediate and near future.  Given the level of spending that has been authorized by the legislature during the 2007 and 2008 regular and special sessions and the anticipated rising cost of state operations, a $1,760,000,000 general fund budget shortfall is projected by the end of fiscal year 2010‑2011 if corrective action is not taken.  This appropriation is one of the steps being taken to address this shortfall.

     SECTION 2.  The legislature finds and declares that:

     (1)  The health care payments program (HMS 401) of the department of human services is essential to the public health, safety, and welfare of the people of the State of Hawaii;

     (2)  An appropriation from the emergency and budget reserve fund is needed to fund the health care payments program for fiscal year 2009‑2010 due to the severe economic downturn impacting the State that has reduced state general fund revenues;

     (3)  The appropriation in this Act will assist in addressing the critical budget shortfall facing the State in fiscal biennium 2009‑2011 by allowing moneys from the emergency and budget reserve fund to be used as a source of funding to replace the general funds that would be used to fund the health care payments program for fiscal year 2009‑2010; and

     (4)  The appropriation in this Act is consistent with the purposes of the emergency and budget reserve fund.

     The purpose of this Act is to appropriate $15,000,000 from the emergency and budget reserve fund to fund the health care payments program of the department of human services for fiscal year 2009‑2010 in lieu of general funds to help address the budget shortfall in fiscal biennium 2009‑2011.

     SECTION 4.  There is appropriated out of the emergency and budget reserve fund the sum of $15,000,000, or so much thereof as may be necessary for fiscal year 2009‑2010, for the health care payments program (HMS 401).  The funds are in lieu of a like amount of general funds that would have had to be appropriated for the health care payments program for fiscal year 2009‑2010.

     The sum appropriated shall be expended by the department of human services to carry out the purposes of this Act.

     SECTION 5.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

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By Request