New taxes and program cuts will be needed to bring Hawaii’s budget back into balance, Gov. Neil Abercrombie said Monday in his first state of the state address.
Abercrombie, a Democrat, took office in December.
“This new day begins with an honest account of the state of our government,” Abercrombie said.
The immediate fiscal problem, according to the governor, is an $844 million operational deficit through the next biennium, but the state faces deeper structural budget problems.
“As difficult as it will be to balance the budget, that effort will merely be life support for what has become a battered, under-resourced, and often dysfunctional democracy,” Abercrombie said.
The governor said he will propose higher taxes on alcohol and soda pop, to eliminate a state tax deduction for state taxes, and to eliminate a tax break on pension income to treat it like all other income for tax purposes.
Abercrombie said he wants to end the current practice of state-funded reimbursement for federal Medicare Part B benefits for Hawaii government employees.
“It is a bonus paid for by taxpayers that can no longer be justified in light of our current fiscal and social crisis,” he said.
The governor, an unabashed liberal, also told lawmakers that Hawaii will be forced to cut its spending on social programs.
“We will have to scale back on those social services for which funding no longer exists,” he said.