LOS ANGELES — Hawaii Gov. Neil Abercrombie presented a supplemental budget for fiscal biennium 2013-15 Monday that will limit expenditures and use the $844 million budget surplus from fiscal 2012-13 to bolster reserves.
The budget will build on a $1.1 billion turnaround for the state since Abercrombie became governor in January 2011, he said.
When Abercrombie took office, he said the state was experiencing a $220 million shortfall leaving it with crippled government programs, furloughs and poor reserve levels.
"The supplemental budget and plan continue responsible management of state fiscal affairs in order to build upon the $1.1 billion turnaround our state has achieved," Abercrombie said.
The surplus will help the state achieve its goals to build up reserves to 10% of general fund revenues and pre-fund other post-employment benefits costs that were announced earlier in the year, said Kalbert Young, the state's financial director.
"These reserves will allow the state to weather future economic downturns and mitigate against cyclical public service cutbacks," Young said.
The budget allocates $50 million each to the state's reserve fund and the Hurricane Reserve Trust Fund in 2014. Those amounts are in addition to the $55.5 million in general excise tax revenues transferred in fiscal 2013 to the Hurricane Relief Fund. The money was allocated under legislation passed earlier this year.
Each fund also will receive $50 million in 2015 bringing Hawaii's reserves to more than $372 million, or 5.6% of projected general fund revenues in fiscal year 2015. The eventual goal is to build reserves up to 10% of general fund revenues.
The state also has $100 million earmarked to start prefunding its OPEB unfunded liability in fiscal 2014. It will follow with a $117.4 million OPEB payment in fiscal year 2015.
The budget includes funding for an additional $351.7 million in new general obligation bond-funded capital improvement projects.
The state will pay cash for $187.4 million in projects it had previously planned to bond for to reduce the growth of long-term debt, according to the budget proposal. It also proposes to use cash from the general fund to pay for an additional $100 million in repair and maintenance projects to the state's infrastructure.
Abercrombie also included a $40 million GO bond request to conserve land at Turtle Bay on Oahu's north shore in his supplemental budget for fiscal 2013-14 released Monday.
A working group established by Hawaii's legislature to resolve the dispute over expansion plans by the owners of the 858-acre Turtle Bay Resort had asked the governor to include the bond request.
Environmental groups have been battling with owners of the Turtle Bay Resort for five years over the proposed plan. If an agreement can be struck between the resort owners and Hawaii officials to set aside the land in a conservation easement at a cost of $40 million to the state, resort expansion would be limited to its current footprint.
The governor also has budgeted close to $10 million for early learning programs, $4.5 for a seniors program and $33.5 million to the University of Hawaii to make payments on revenue bonds issued for repair and maintenance projects.
"Although there are many priority needs that must be addressed, fiscal sustainability is essential," Young said. "This plan will allow the state to address its priority needs while positioning itself to best handle uncertainties, such as economic slowdowns or the recent federal government shutdown, by building up our reserves and exercising continued fiscal prudence."
