The state Senate’s sole Republican is waving red flags over the pace of government spending in Hawaii.
Sen. Sam Slom says the Legislature and new governor will face a big challenge next year because the state is on track to deplete its record $844 million carryover balance by 2016.
A five-year financial outlook, based on current spending projections, shows the state budget hundreds of millions of dollars in deficit. By 2019, the projected carryover ending balance will be just over $1 billion in the hole, according to Paul Harleman, the Senate Minority Research budget director.
The state by law must have a balanced biennium budget, so that means tough decisions have to be made in the coming year about tapping into the reserves, increasing taxes, cutting services or a combination thereof, Harleman wrote last week in a paper on the budget.
Democrats recognize the budget dilemma.
Gov. Neil Abercrombie’s finance director, Kalbert Young, said the state will be challenged for declining ending balances beginning this fiscal year, which started July 1.
Positive ending balances from previous years, going back to 2012, will help keep the state’s financial ship afloat through 2016. But if revenues come in as forecast, Young said, “there would have to be significant fiscal constraint measures in play this fiscal year to preserve those positive ending balances through FY16.”
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