Exposing Hawaii’s Special Funds: Excess Balances of $1.4 Billion Raid Hawaii’s Taxpayers

Danny de Gracia, II and Kyle Shiroma 

In the last three years, nearly all fifty states saw government budgets operating in the red as a result of the global economic crisis. The fallout of the meltdown gained considerable notoriety in Hawaii as the determination was made to compensate for the revenue shortfall in part by implementing a temporary furlough of Department of Education personnel. The Hawaii State Legislature, faced with mounting public opposition to “Furlough Fridays” and insufficient revenues to maintain current levels of spending, considered a variety of funding mechanisms, one of which included the use of raiding funds designated on state budget worksheets as “B” means of financing (MOFs), or “special funds,” as it was believed that a number of these accounts were either in excess of their operational requirements or funded mandates which had sunset. Both the decision to raid special funds and the revelation that several may have excess balances or be obsolete provokes one to ask, “Just how many special funds are there, and what is their total in excess balances?” This paper aims to create a starting point for answering that question and to provoke policymakers and taxpayers alike to support a complete audit and publication of all Hawaii State funds – not just special funds – for the purposes of transparency and accountability in government. It also provides a policy option for legislators to find available monies that could potentially be returned to all taxpayers in the State of Hawaii in the form of a refund.
To read a commentary on this report, please click here. Otherwise, you can find the entire paper in the download link below.