In preparing the executive supplemental budget, Gov. Neil Abercrombie set forth an overall strategy of maintaining a sustainable multi-year financial plan to establish a solid financial foundation for Hawaii. In doing so, he empowered our state financial team to develop a budget and six-year financial plan that continues to build up fiscal reserves, while investing in critical state services and managing our long-term liabilities.

Less than four years ago, with the economy spiraling downward, the state and county implemented "Furlough Fridays," wage reductions, and closed and underfunded programs. Many Hawaii families suffered from increased bankruptcy filings, foreclosures and layoffs. We have worked hard to turn our economy around and ensure government revenues are growing at a robust rate; and we did it without having to create new taxes over the last three years.

Since the governor took office, the administration has aggressively marketed state bonds, generating more than $271 million in bond premiums — which is considered revenue to the general fund that adds no additional debt to the state.

In addition, the state has refunded more than $800 million of previously existing debt that will generate more than $200 million in taxpayer savings over the next 15 years.

Both of these steps help to lower debt service payments into the future. We streamlined internal processing of tax filings so taxpayers and businesses received credit for paying their taxes faster as well as expedited tax refunds.

To stimulate the economy, we increased funding for public construction projects and committed $1 billion for airport modernization. An additional $250 million has been allocated for much-needed harbor improvements.

Meanwhile, unemployment has improved to fifth lowest in the nation (4.5 percent statewide; 3.8 percent on Oahu in December 2013), and employers are enjoying a lowered unemployment insurance rate, which allows them to apply savings to reinvest in their businesses and personnel.

People should remember that prior to 2011, the state had to access reserves just to pay its bills. But, our approach was to advocate for expeditious repayment back into the reserves and to diligently work toward a repayment plan.

Last year, Acts 266 and 267, which were part of the governor’s 2013 legislative package, together directed a total of $100 million in general funds toward paying back these borrowed funds. As a result, the state’s Hurricane Reserve Trust Fund, and Emergency and Budget Reserve Fund (also known as the "Rainy Day Fund") will each receive $50 million in fiscal year 2014. This session, we are asking the Legislature to appropriate another $100 million total ($50 million each) toward these funds.

Building reserves and saving money when available is a crucial part of our conservative financial plan. Reserves will allow us to keep government open for business and sends a strong message to Wall Street that Hawaii is serious about prudent financial management.

Achieving financial sustainability is not single-faceted. It is not simply defined as reducing spending, nor is it about increasing revenues. A financial plan for sustainability is much more robust and multi-faceted. It is about building financial reserves, managing expenditures, and providing for increased public services.

The proposed budget includes long-term objectives such as restoring services, investing in information technology to improve government efficiency, supporting the business community, combating homelessness, and educating our keiki.

Sustainability means we must come to grips with our growing liabilities. Ignored for decades, unfunded liabilities in the state pension system and health fund are finally being addressed. In order to develop a sustainable government that ensures economic prosperity, we must first have a budget that is stable, prepares for hard times, invests during good times, and pays down its debt. We are on the right track to a sustainable financial future — and it’s about time.