HONOLULU, Hawai‘i – Following today’s Council on Revenues’ quarterly meeting on the
General Fund Revenue Forecast for fiscal years 2018 through 2024, Senator Donovan M. Dela Cruz, Chair of the Senate Committee on Ways and Means made the following statement:
"The Council on Revenues raised their projection from 4.5% to 5.3%. This is good news for our short-term obligations, however, per the State's Financial Plan their projections for the out years show that the State is still overspending for Fiscal Years 2019 through 2022. This budget shortfall is being covered by the carryover balance. The practice of using the carryover balance and restrictions to balance the budget will negatively impact our State's bond rating should we go below amounts established in the State Reserve Policy.
Per the 2016 State Reserve Policy, the Emergency and Budget Reserve Fund (EBRF) should be a minimum amount of 10% of the preceding year's general fund revenues combined with a carryover balance of 5% of the preceding year's general fund revenues. The EBRF is currently at $317.2 million for Fiscal Year 2018 –we need to bring it to $700 million.
We are looking at budget cuts and moving bills to generate revenues shrinking the gap between revenues and expenditures. These bills will address long term budgeting needs and strengthen the State Financial Plan. The State needs its financial plan in order to pay for obligations that include unfunded liabilities, costs related to our aging population, collective bargaining, and to build the EBRF to $700 million and to maintain a carryover balance of at least $300 million. This may allow the state to move away from the practice of restricting funds to balance the budget and avoid any threat to our bond rating.”