HOUSE OF REPRESENTATIVES

THE TWENTY-FIRST LEGISLATURE

REGULAR SESSION OF 2002

A G E N D A

Due to the terrorist attacks of September 11, 2001 tax revenue projections have been lowered by over $300 million for the current fiscal biennium. In response to the revenue shortfall, the Administration submitted proposals to reduce expenditures and to increase revenues. The proposals included:

REDUCTION TO EXPENDITURES

1. Restrict 1% of discretionary costs for Fiscal Year 2002 ($16.5 million)

2. Restrict 2% of discretionary costs for Fiscal Year 2003 ($33.0 million)

3. Extend the amortization of the Employees' Retirement System unfunded liability.

INCREASES TO REVENUES

1. Double the Tax on Alcohol beginning in Fiscal Year 2003. ($40.0 million annually) (Changes tax on alcohol from volume to ad valorem)

2. Transfer Hawaii Hurricane Relief Fund in FY 2003 ($213 million)

3. Transfer other non-general fund balances to the general fund. FY 2004 ($20.9 million)

4. Authorize an additional $900 million in Capital Projects. FY 2003 ($47.8, 41.8, 23.9 million)

5. Removes 5% exemption for Administration Expenses to DCCA special funds FY 2002 ($1.5 million annually)

Several proposals to increase revenues have met resistance, if not been outright rejected by the Legislature. As additional revenue proposals are eliminated, additional reductions have become necessary.

The Committee's staff will present an overview to:

1. Revisit the Administration's General Fund Financial Plan

2. Provide an update on the status of the Administration's fiscal bills.

3. Provide details of additional cuts of 5% as provided by the departments.

4. Provide details of additional reductions beyond the 5%.

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