Social service advocates urged lawmakers Tuesday to continue to use the state’s rainy day fund to help finance health, education and human services programs that were threatened during the recession.
The Abercrombie administration tapped the rainy day fund to help close the state’s budget deficit last year but also released money from the fund that lawmakers had carved out in 2010 to help dozens of social service programs.
The administration has proposed using some of the proceeds from a recent bond sale to replenish the fund, a signal to credit-rating agencies that the state is committed to building an adequate cash reserve. But social service advocates want a share of the money.
"While we appreciate the administration’s attempts to replenish the account, we’re going to appeal again to the Legislature as policymakers," Alex Santiago, executive director of PHOCUSED, an advocacy coalition, said at a joint hearing before the Senate Human Services Committee and the Senate Health Committee. "The budget, when you look at it, we have to find some way of keeping that safety net intact. It’s been tattered and torn repeatedly over the last number of years.
"What we’re seeing out there — we’re very concerned."
Social service providers ideally want money for the programs included in the state budget. Many note, however, that the rainy day fund was created as an emergency reserve to help maintain public health, safety, welfare and education.
Lawmakers turned to the fund in 2010 to provide $24 million for struggling programs, including money for Healthy Start, a child abuse prevention program, and Kupuna Care, which provides assistance to seniors.
Former Gov. Linda Lingle declined to release the money because of budget concerns. Gov. Neil Abercrombie released the money on his first day in office in December 2010, explaining that the state needed to live up to its commitments.
But Abercrombie soon found himself with a $1.2 billion deficit, so he asked lawmakers for permission to tap the rest of the fund to get through the last fiscal year.
The result is that there is only about $6 million left in the fund today. Kalbert Young, the state’s budget director, wants to use bond proceeds to replenish it with $20 million this fiscal year and $43 million next fiscal year, which would raise it to around $60 million, about the same level as before the withdrawals.
The Abercrombie administration also wants to replenish the state’s hurricane relief fund, which was tapped to help close the deficit and to end teacher furloughs on classroom instruction days.
Young told senators that House and Senate leaders might not agree to the administration’s timetable for replenishing the emergency funds. Lawmakers expected that social service advocates and others would argue that some of the money from the bond proceeds should go toward restoring state programs, not into cash reserve. Lawmakers could also direct money from the bond proceeds toward closing projected deficits in the latter years of the state’s six-year financial plan.
State Senate Minority Leader Sam Slom (R, Diamond Head-Hawaii Kai) agreed that social service providers have been in a difficult situation since the recession. But he opposes raiding the rainy day fund or other special funds. He said the state has not taken the steps necessary to encourage job growth that would improve the economy.
"And continually raiding funds — taking money, putting some back, taking money, putting some back — is not really an adequate fiscal plan. It is not taking into consideration what we need to do as a state," he said.
State Sen. Suzanne Chun Oakland (D, Kalihi-Pauoa), chairwoman of the Senate Human Services Committee, said senators chose Tuesday to advance a bill that provides money from the rainy day fund for social service programs so lawmakers would have options later this session. She, too, prefers that the programs be financed through the state budget. But she points out that the rainy day fund was meant for emergencies such as an economic downturn, not as a cash reserve to calm credit-rating agencies and bond investors.
"Even though we want to use it toward our bond rating, that wasn’t the reason why we created this fund," she said. "So I hope that we will consider at least a portion of the rainy day fund for some of these worthy programs."