Do taxpayers want to get the bad news now, or later?
By law, Gov. Josh Green has to balance the budget, which has been affected by a recent downturn in state revenue projections. He opted Wednesday to square things up in public now, unveiling a list of cuts to overcome a shortfall of more than $1 billion.
Of course, the projections are estimates, so there is a chance that tax revenues could recover significantly, meaning that some project funding will have been reduced more than necessary.
Hoping to head that off may be why governors more typically decide to release lawmakers’ appropriations piecemeal-fashion over the course of the fiscal year, according to available funds and their own priorities.
But on balance, advantages to the public and stakeholders are clear with Green’s approach: It is more transparent than the cut-as-you-go process in which decisions have a lower profile and are harder to track.
And it gives ample notice about key funding reductions to affected government agencies, interest groups and the legislators themselves, who can begin planning to make adjustments to the new fiscal reality. It’s important, too, that those in line for funding at a later point make sure to spend this time positioning projects to be shovel-ready.
This budgetary juggling may have been prompted by unusual circumstances, such as the $200 million in unencumbered funds for the governor to distribute, and especially the reduction forecast by the Council on Revenues. But it’s worth watching this cycle as a model to adopt in future years.
There are some particular items in Green’s announced cuts — $554.7 million in the coming fiscal year, and $533 million in fiscal 2025 — that merit attention:
>> The shelving of the ill-considered First Responders Technology Campus in Mililani was a logical move, based on his correct assessment that not enough is known about the final cost of the project to move it along.
Meanwhile, it was good to hear the governor’s intent to pursue a near-term solution for agencies most urgently in need of facility upgrades, most specifically the Hawaii Emergency Management Agency.
>> Some of the projects losing funding in fiscal 2024 were desirable, such as the Kalaeloa electrical upgrades at $47 million, now cut by $42 million to $5 million. But Green’s rationale was that work was not ready to proceed in the first year anyway, so a large allocation wasn’t yet required. That makes sense, as long as there’s follow-through in coming years.
>> Similarly, there was a deep cut of $120 million from the $170 million lawmakers set aside to construct teacher housing. It’s important to advance this needed project at least incrementally and see that this incentive to build Hawaii’s teacher workforce is pursued.
>> It is concerning that funds for renovations and improvements to state parks has been cut in half to $25 million. The state has a long history of deferred upkeep, so it’s crucial that decision-makers not lose sight of the maintenance calendar.
Green’s essential argument is that he wanted to put a stronger imperative on projects that are well along in planning and have demonstrated a community consensus for their need. Aloha Stadium is one example of an initiative the governor wants to see progress on sooner rather than later. So is the relocation of a new Oahu Community Correctional Center, with long-standing overcrowding and deteriorating conditions.
It’s hard to dispute those as proper priorities for the state.
On the whole, then, the strategy for tackling the most critical state objectives is a sensible one, and pulling back the curtain on decision-making lets the public see more clearly how decisions are made. Illumination is always welcome.
