State needs to rein in wild spending

The following “Island Voices” commentary was published originally in the Honolulu Star-Advertiser on May 28, 2023.

By Joe Kent and Jonathan Helton

Government transparency in Hawaii took a hit this year when state lawmakers approved a state budget that burned through the state’s budget surplus and wildly exceeded the state’s constitutional spending limit — almost all at the last minute in conference committee and with virtually no public input.

Joe Kent

Details on how the budget was cobbled together will probably never see the light of day, but what is certain is that the executive general fund budget now being considered by Gov. Josh Green contains $11.29 billion in spending, an increase of 23% over the previous year. Combined with other budget bills, state spending is poised to exceed the state spending cap by $1.6 billion, or 16%.

Hawaii’s Constitution stipulates that general fund spending should grow no faster than the state’s economy. However, the Legislature can legally exceed that limit by a two-thirds vote of each chamber, and that is what it routinely does.

Ironically, the proposed fiscal 2024 budget did face some unusually vocal opposition. Eight House members voted “No” and six voted “Aye with reservations.”

Jonathan Helton

Some of those representatives were upset about the lack of transparency, some about the overspending, and others that particular spending proposals in the governor’s original budget request were slimmed down.

In reality, almost every state department received more money than last year, including the Department of Education, contrary to what some would have us believe.

The Grassroot Institute of Hawaii recently calculated that if this level of spending continues, the state could be running a deficit by 2028. Remember the $10 billion surplus that state administrators were predicting at the beginning of the year? Fuhgeddaboudit.

So what can we do to stop this fiscal madness?

In the near term, the governor should use his line-item veto power to pare down the budget. Target No. 1 should be the $200 million “slush fund” that was appropriated to him to do with what he will, no strings attached.

Former Gov. Neil Abercrombie, among others, has criticized this lack of legislative oversight. He said the budget bill “says it is completely up to him (Green), which is a bad idea.”

Gov. Green has a chance to exhibit rare leadership by refusing this pot of money — which is especially dubious because it was added to the budget after the conference committee had voted.

Looking ahead, the best and most straightforward way to prevent more episodes of irresponsible spending is for lawmakers to simply exercise restraint.

They could also give the state spending cap some teeth, which a small group of legislators tried to do a decade ago by proposing an amendment to the Constitution that would have eliminated the Legislature’s ability to override the cap. To no one’s surprise, that bill never received a committee vote.

A further step could be to assemble a panel of experts — as suggested by the state Tax Review Commission — that would examine how to reduce state spending, debt and liabilities. Given the state’s high debt and pension liabilities, such a commission could be useful in diagnosing the problem and starting a dialogue on possible fixes.

Ultimately, the state’s free-spending ways represent tough times ahead for Hawaii taxpayers, many of whom have already fled our islands for lower costs of living elsewhere.

For the sake of Hawaii’s future, it’s time lawmakers got serious about fiscal restraint.

Joe Kent is executive vice president and Jonathan Helton is a policy researcher at the Grassroot Institute of Hawaii.

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