LOS ANGELES — In what would be a slowdown in the pace of issuance, Hawaii's $25.7 billion first-draft budget for the next two fiscal years contains requests for $545.9 million in general obligation bonds.
The bond request for the two-year period, released in Gov. David Ige's budget message, would fund repair and maintenance and reduce project backlogs.
Each fall for the last three years the state has issued around $1 billion of GO bonds, of which more than half was new money.
"A substantial portion of the recommended GO bond funded projects address health and safety issues or provide major repair and maintenance and other improvements throughout the state," according to Ige's message.
Moving forward on the projects in a timely fashion, he wrote, will "help to reduce project backlogs and prevent future requirements from becoming more significant in the forthcoming years."
The proposed GO issues pay for a third of the $1.1 billion budgeted for capital improvements in fiscal 2016 and just less than half of the $683.4 million budgeted for fiscal 2017. The state also plans to issue more than half a billion dollars in revenue bonds for facilities and highway projects.
"We will exercise prudence by reserving $300 million of the state's bond margin for priority projects, which may require authorization in fiscal 2017, the supplemental year of the budget," Ige said in his budget message. "I feel it would not be in the state's best financial interest to appropriate the maximum amount of GO bonds under the current bond margin, as these projects would be put out to bid in a crowded, and less favorable construction market."
The Council on Revenues, in projections released on Nov. 5, reduced its forecast for revenue growth from an anticipated 4% in calendar year 2014 and 4.7% in calendar year 2015 to 3.5% for both years. The revisions reflected downward trends in the nation's personal income growth rate, growth trends in the tourism industry, and the impact of recent changes in oil prices and housing rental on inflation, according to the budget message.
In Hawaii, K-12 schools are funded at the state level. That results in large capital requests in the budget with $100 million over the biennium proposed for the maintenance and improvement of public schools and $38.1 million in fiscal 2016 to reauthorize funding for previously authorized Department of Education projects.
According to the budget message, given the short time frame between the start of his administration and the statutory deadline to submit the executive budget to the legislature, the budget was primarily compiled by Gov. Neil Abercrombie's previous administration.
Ige was inaugurated Hawaii's governor on Dec. 1 and had to present the budget to the legislature Monday.
The proposed budget would increase spending by 4% for each year of the biennium budget. It allocates $12.6 billion in spending for fiscal year 2016 and $13.1 billion in spending for fiscal year 2017.
The new governor said in his budget message that he is fully committed to delivering a balanced budget to the state legislature. He vowed to avoid proposing new programs the state can't afford, to live within Hawaii's means and to spend public money wisely to avoid raising taxes.