SAN FRANCISCO — Hawaii Gov. Linda Lingle, in her final state of the state address Monday, called for a beefed-up rainy-day fund and a bond program to help property owners finance clean-energy systems and energy-efficiency upgrades.
After two terms, the Republican governor is termed out of office at the end of the year.
Her speech focused largely on how to meet the challenges facing the state’s economy, which has been hobbled by a recession-driven drop in Hawaii’s main industry, tourism.
The state faces a $1.2 billion budget gap over the next 18 months.
“My administration began seven years ago during challenging economic times and enters its final year in an even tougher economic climate,” Lingle said. “The difference between then and now is that the challenges we face today are so much greater, revenue loss so much larger, and the statewide impact so far-reaching, that the decisions we have to make are much tougher.”
Lingle said she wants to beef up the existing rainy-day fund and turn it into a fiscal stabilization fund that is seeded when tax revenues are growing.
“The fiscal stabilization fund will ensure that in years when tax revenues are growing, 5% of the general fund’s end-of-year balance will be placed in the stabilization fund prior to granting the currently mandated refund to taxpayers,” she said.
The current rainy-day fund is paid for with money from the tobacco industry’s master settlement agreement.
The GOP governor faces an overwhelmingly Democratic Legislature, but there is some evidence that lawmakers might support a stronger rainy-day fund.
House Democrats last year introduced a similar bill, which cleared both the House and Senate, before foundering in conference committee amid discrepancies over what formula to apply.
Lingle’s Hawaii clean energy investment bond proposal would use the state’s bonding authority to help property owners to pay for clean energy systems and energy-efficiency upgrades.
The proposal mirrors programs that already exist in 15 states, according to Lingle, and are often known as property assessed clean energy, or PACE, bonds.
The program is designed to assist residential and commercial property owners with the upfront costs of installing clean energy and energy-efficiency upgrades by allowing them to borrow the money from the state and then repay the loans over a period of years via an annual assessment on their real property tax bill. The assessment stays with the property if the owner sells.
Lingle would back the program with $50 million in general obligation bond authority.
Other elements of Lingle’s proposed clean-energy package include a ban on new fossil-fuel power plants, and exemptions to the state’s excise tax for renewable energy projects of at least two megawatts, electric and plug-in hybrid vehicles, and charging stations for such vehicles.
“It is time now to show the public by our actions that we will no longer allow our economic well-being to be dependent on burning oil and coal that must be shipped here over thousands of miles of open ocean,” the governor said.
