Professional Documents
Culture Documents
Prepared By:
Paul Harleman, MBA
Budget Director
Senate Minority Research Office
Phone: (808) 586-6988
Email: p.harleman@capitol.hawaii.gov
hawaiialternativebudget.com
Table of Contents
Message from the Senate Minority Leader
Budget Plan
Page |2
Page |3
Budget Plan
The state budget reflects more than numbers, it is reflects shared values and policy priorities. The Senate
Minority Alternative Budget is based on a "priority and reality based" budgeting philosophy. This differs
from conventional budgeting, which requires the development of budgets based on clearly defined policy
priorities. The priorities of the Senate Minority Alternative Budget are three bold and simple objectives
which are designed to revitalize Hawaii's economy, and improve the lives of working families and small
business owners:
1. Reduce the rising cost of living for Hawaiis working families
2. Improve Hawaii's deteriorating business climate
3. Make government less expensive and more effective
In the legislature, revenue losses are often cited as arguments against tax reform legislation. The proposed
Senate Minority Alternative Budget demonstrates the fallacy of that presumption. The state should move
in a different direction, with sustainable balanced budgets and lower taxes.
Table 1. Senate Minority Tax Relief Package
Bill Number
Tax
2017
SB947
SB957
SB958
SB959
2018
2019
2020
2021
-$115M
-$117M
-$120M
-$122M
-$185M
-$196M
-$214M
-$224M
-$232M
-$87M
-$98M
-$98M
-$101M
-$126M
-$16M
-$16M
-$16M
-$16M
-$17M
-$287M
-$425M
-$445M
-$460M
-$497M
Unlike the other budget drafts that have been introduced so far, the Senate Minority Alternative
Budget balances the budget in the long run without having to rely on any current or future tax
increases.
Reduces the Governor's Budget by a total of $1.59 billion and 455 positions.
Provides a total of $287 million in tax relief in FY 2017 and $425 million in FY 2018 and
beyond.
2015
$12,315M
$12,315M
$12,315M
2016
$13,146M
$12,838M
$12,567M
2017
$13,659M
$13,302M
$12,961M
Page |4
The Senate Minority Alternative Budget cuts a total of $1.59 billion from the Governor's Budget for FY
2016-2017. Despite these cuts, the proposed budget increases the current FY 2015 base budget by $252
million in FY 2016 and $646 million FY 2017. Most of these increases are for non-discretionary items
such as employee retirement benefit payments.
Table 3. Senate Minority Alternative Budget FY 2016-2017 (Departments - All Means of Financing)
Governor's House Budget Alternative Discretionary Hiring
Budget
Cuts
Budget Cuts Spending
Freeze
Restriction
Agriculture
Alternative
Budget
Total Cuts
$98M
-$8M
-$10M
-$3M
-$6M
$71M
-$26M
$406M
-$1M
-$9M
-$12M
-$6M
$376M
-$30M
Attorney General
Business & Economic
Development
$163M
-$1M
-$9M
-$6M
$M
$147M
-$16M
$800M
-$266M
-$5M
-$2M
-$2M
$526M
-$274M
$4,871M
$M
-$6M
-$2M
-$2M
$4,861M
-$10M
$158M
-$4M
-$6M
$M
$M
$148M
-$9M
Defense
$230M
-$1M
-$2M
-$3M
-$2M
$222M
-$8M
Education
$4,039M
-$5M
-$261M
-$56M
-$26M
$3,692M
-$347M
Governor
$8M
$M
-$1M
-$1M
-$1M
$7M
-$2M
$115M
-$13M
-$2M
-$2M
$M
$99M
-$17M
$6,273M
-$171M
-$46M
-$22M
-$14M
$6,018M
-$255M
$43M
$M
-$2M
-$1M
-$1M
$40M
-$3M
$3,359M
-$49M
-$117M
-$38M
$M
$3,154M
-$205M
Judiciary
$346M
-$8M
-$21M
$M
$M
$317M
-$29M
$932M
$1M
-$10M
-$3M
-$2M
$918M
-$15M
$297M
-$53M
-$9M
-$6M
-$7M
$222M
-$74M
$3M
$M
$M
$M
$M
$3M
-$1M
$22M
-$5M
$M
$M
$M
$17M
-$5M
$537M
-$12M
-$36M
-$3M
-$26M
$460M
-$76M
$60M
$M
-$3M
-$5M
-$9M
$42M
-$17M
Transportation
$1,811M
$M
-$33M
$M
$M
$1,778M
-$33M
University of Hawaii
$2,235M
-$71M
-$25M
-$20M
-$21M
$2,096M
-$139M
$26,805M
-$665M
-$612M
-$188M -$122M
$25,213M
-$1,592M
Hawaiian Homelands
Human Services
Human Resources
Health
Lt. Governor
Office of Hawaiian Affairs
Public Safety
Taxation
Total
Page |5
Budget Cuts
The Senate Minority Alternative Budget cuts a cumulative total of $1.59 billion ($989 million in general
funds) from the Governor's Budget for FY 2016-2017. The majority of these cuts are derived by adopting
the positions of the House Budget. HB500 HD1 includes $665 million in cuts total cuts to the Governor's
Budget.
In addition to the House Budget cuts, the Senate Minority Alternative Budget does not include any
funding for collective bargaining contract increases. The Governor's Budget includes a total of $575
million in collective bargaining increases for FY 2016-2017. By law, the Governor is required to
negotiate with public sector unions for salaries and employee benefits. The legislature, on the other hand,
has the discretion to decide whether to fund the increases associated with collective bargaining. In light of
the increasing costs for state employee pension and retirement benefits, the Senate Minority believes that
the current increases for collective bargaining are unwarranted.
The Senate Minority Alternative Budget also includes $310 million in budget restrictions. As a result of
lower than anticipated revenue collections, the previous Administration imposed a 10 percent executive
spending restriction on discretionary general fund appropriations. These restrictions amount to a $94
million on an annual basis. The Senate Minority calls on the current Administration to extend the
restrictions that are currently in place through FY2016-2017. In addition, the Senate Minority also calls
on the current Administration to impose a hiring freeze on general fund positions. Both budget
restrictions would save taxpayers an additional $310 million through FY 2016-2017.
A total of $8 million in cuts is derived by reducing the general fund appropriations for low-priority
programs. In addition to the these cuts, the Senate Minority Alternative Budget also includes $38 million
in savings that are derived from consolidating administrative programs within the Department of Health
and Human Services.
Table 4. Senate Minority Alternative Budget FY 2016-2017 Proposed Budget Cuts
$1,800M
$1,600M
$1,400M
$1,200M
$1,000M
$800M
$600M
$400M
$200M
$M
Amount
$315M
$665M
$566M
Program Consolidations
$36M
$8M
Page |6
Governor's
Budget FY
2016-2017
House
Budget
Cuts
Alternative
Budget
Cuts
Additional
Budget
Restrictions
Senate Minority
Alternative
Budget FY 20162017
General Funds
$13,845M
-$236M
-$443M
-$315M
$12,851M
Special Funds
$6,277M
-$117M
-$116M
$M
$6,044M
Federal Funds
$4,809M
-$54M
-$44M
$M
$4,711M
Federal Grants
$381M
$8M
$2M
$M
$391M
Private Funds
$1M
$M
$M
$M
$1M
County Funds
$M
$M
$M
$M
$M
Trust Funds
$371M
-$242M
-$2M
$M
$127M
Transfers
Revolving
Funds
$175M
$M
-$3M
$M
$172M
$920M
-$25M
-$5M
$M
$891M
$26M
$M
-$2M
$M
$25M
$26,805M
-$665M
-$612M
-$315M
$25,213M
Other Funds
Totals:
Page |7
$600M
$400M
$200M
$M
-$200M
-$400M
Alternative Budget
Governor
House Budget (HB500,HD1)
2015
-$71M
-$71M
-$71M
2016
$271M
-$178M
-$80M
2017
$35M
-$218M
-$79M
2018
$96M
-$49M
$72M
2019
$247M
$75M
$308M
2020
$411M
$319M
$545M
2021
$566M
$570M
$750M
The Governor's and House Budget drafts both rely on projected deficit spending until 2017 and 2018. The
Senate Minority Alternative Budget is based on the guiding principle that budgets should always be
balanced, no matter what. Despite the $287 and $425 million in anticipated revenue losses resulting from
the Senate Minority's Tax Relief package in FY 2017 and 2018, the Senate Minority Alternative Budget is
the only budget that is balanced in both the short and long-term.
Page |8
Nontax revenues
Revenue impact of legislation
Senate Minority Tax Relief
Package
2015
2016
2017
2018
2019
2020
2021
$730M
$636M
$643M
$653M
$661M
$664M
$667M
$M
-$4M
-$4M
-$4M
-$4M
-$4M
-$4M
-$287M
-$425M
-$443M
-$456M
-$490M
Tax revenues
$5,666M
$5,977M
$6,306M
$6,653M
$6,985M
$7,335M
$7,701M
Revenue
$6,395M
$6,609M
$6,657M
$6,877M
$7,199M
$7,539M
$7,875M
-$6,070M
$6,317M
$6,552M
-$6,716M
-$6,884M
$7,056M
$7,232M
-$155M
-$146M
-$147M
-$150M
-$154M
-$158M
-$162M
-$36M
-$36M
-$36M
-$36M
-$36M
-$36M
-$36M
-$3M
-$2M
-$3M
-$3M
-$3M
-$3M
-$3M
-$283M
-$72M
-$121M
-$111M
-$111M
-$111M
-$111M
$80M
$80M
$80M
$80M
$80M
$80M
$80M
$94M
$94M
$94M
$94M
$94M
$94M
$61M
$6,622M
$61M
$61M
-$6,466M
$61M
$6,338M
-$6,780M
-$6,952M
$61M
$7,128M
$61M
$7,308M
-$71M
$271M
$35M
$96M
$247M
$411M
$566M
Page |9
Page |10