Honolulu – Senator Sam Slom has serious concerns about the state of Hawaii’s finances. Slom, Minority Leader in the Hawai’i Senate, said today “The recent Council on Revenues downgrading forecast indicates Hawaii is in a much worse position than what was anticipated. Hawaii is set to go bust in 2016 unless the new Governor and the Legislature make some serious cuts.”
“Senate Minority Research shows that,based on revenue forecasts, if the State continues to spend at the current rate Hawaii will use up its general fund carryover balances as early as 2016. The small 10% of department funds withheld this year by the Governor’s office will not be enough to stop the freefall as it is just a drop in the bucket ($14m) in a 6+ billion dollar state budget.”says Slom.
Senator Slom adds “Because the State is not constitutionally permitted to borrow from outside sources for operating expenditures, it is likely the State will tap into the Emergency Budget Reserve Fund and Hurricane Relief Fund. Those funds are not large so that will be a small band aid for the problem and will not address the problem of overspending for long. The State and the Legislature will have their work cut out for them to deal with this mess resulting from kicking the can down the road for so many years. The final option to deal with the problem by raising taxes is the least desirable and burdensome for the people because we are already one of the highest taxing states in the nation.”
View the Research article here. “The Implications of the Council on Revenues General Fund Forecast: What happened to the $844 m surplus?” by Paul Harleman, Budget Director, Senate Minority Research Office, September 15, 2014.
 To tap into the Emergency Budget Reserve Fund the state would need a time of emergency, economic downturn, or an unforeseen reduction in revenue, as provided by law. Hawaii Constitution, Article VII, Sec. 6.