We happened to watch the KGMB-Hawaii News Now last night at 6 p.m., and I was interested in the promo announcing an upcoming story about law violations by the state.
It turned out to be a story on the Senate hearing on the state’s finances. Senators were told that the state ended up with a $22 million deficit at the end of the fiscal year.
State government ended fiscal year 2010 in the red. It is the second straight year Hawaii has operated at a deficit and by in doing so violated the state constitution for a second straight year.
According to the story: “The state constitution requires a balanced budget, but no one gets penalized when it is not balanced.”
The allegation is not clearly sourced, so its difficult to tell whether the charge that the deficit created a constitutional violation came from the senators or from Hawaii News Now. Even if it came from senators at the hearing, wouldn’t you compare it to the actual constitutional provision while reporting and take note of discrepancies?
Baehr pressed Ways & Means Committee Chair Donna Mercado Kim about the issue, suggesting that the absence of penalties or consequences is a problem. She was noncommital.
But wait. What are they talking about?
The constitution addresses the budget, not the actual, end of the year financial picture. The BUDGET.
“Budget” is clearly different from “actual”.
The budget is the plan, in the form of bills, prepared by the governor and eventually passed by the legislature. The Hawaii State Constitution says that there have to be sources of revenue, also identified in bills, to cover all of the budgeted expenditures. The budget provision of the constitution addresses just that–the budget–and makes no reference at all to actual, end-of-the-year financial shortfalls.
The State Constitution (Article 7, Section 8) clearly refers to the budget, the plan of proposed expenditures. Plan, not actual.
Within such time prior to the opening of each regular session in an odd-numbered year as may be provided by law, the governor shall submit to the legislature a budget in a form provided by law setting forth a complete plan of proposed expenditures of the executive branch, estimates as provided by law of the aggregate expenditures of the judicial and legislative branches, and anticipated receipts of the State for the ensuing fiscal biennium, together with such other information as the legislature may require.
The section goes on about the budgeted expenditures and sources of revenue, contained in various bills, that have to match in order for the resulting budget to be legal.
The legislature passed balanced budgets in each of the two years, so there was no violation of the constitution, contrary to the Hawaii News Now report.
What the deficit does mean is that the budget submitted by the new governor will be that much harder to balance in order to meet the constitutional requirement.
This is one of those situations where the Lingle administration was unfairly maligned with the charge that they violated the law. I wonder why someone along the way didn’t catch the problem with the story, and also if anyone will offer the public a correction and the administration an apology?

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