Hawaii Open Budget Initiative Press Conference on March 4, 2015
Senator Sam Slom and Representative Gene Ward introduce the Hawaii Senate and House Minority's launch of the Hawaii Open Budget Initiative website, which allows anyone to interact with the state budget figures.
Wednesday, March 4, 2015
Hawaii Open Budget Initiative: A bold step towards fiscal transparency
Today, Senator Sam Slom and Representative Gene Ward held a joint press conference to launch the Hawaii Open Budget Initiative, a nonpartisan effort to make the state budgeting process accessible to the public by putting state budget facts and figures online, in real time, on the Hawaii Open Budget Initiative website: http://hawaiiopenbudget.com.
Senator Sam Slom says, "State departments and agencies are required to disclose information, but they usually publish information in static format, like in a PDF. With the Hawaii Open Budget site, people will for the first time be able to work with the numbers to create their own version of the budget and envision their ideal state economy."
Representative Gene Ward says, "Hawaii's government holds its budget like a poker player holds his cards...close to his chest and turns a card over only when he has to. With this budget website, all bets are off the table and the people of Hawaii win."
Hawaii lawmakers are taking this step toward fiscal transparency just in time for Sunshine Week, which is "an annual celebration of access to public information" slated for March 15-21, 2015.
Among the Hawaii Open Budget's main objectives is to educate the public about the state budget process by making the information readily available in a dynamic format and encouraging interaction with the numbers. Lawmakers are confident the site will allow people to gain insight into the decisions they have to make, and see the consequences behind decisions to increase taxes, cut spending, propose a tax credit or grant a tax exemption. There is even a "Balance the Budget" interactive tool where people can choose which proposed laws they want to enact to balance the state budget.
To learn more, visit the Hawaii Open Budget Initiative website or connect through Facebook, Twitter or LinkedIn by searching for Hawaii Open Budget Initiative or using the links provided on the webpage at http://hawaiiopenbudget.com. There is also a demonstration video on how to navigate the site and use the various tools, which can be accessed at http://hawaiiopenbudget.com.
Senate Minority - Opening Day Remarks by Senator Sam Slom
On January 21, the legislature opened its 2015 session and Senator Sam Slom delivered the following speech on behalf of the Senate Minority.
"Senate President Kim, Governor Ige, our Military, distinguished guests and overburdened Hawaii taxpayers, on behalf of the entire Senate Minority: Aloha!
First, let me reassure all of you who have been worried, that I remain a Republican-I'm not switching parties- and will continue to represent the loyal, but responsible, opposition to harmful legislation, while advocating reasonable alternative legislation to solve problems and ease the economic burdens on our citizens.
It has become increasingly difficult to stand up and speak out against the status quo and call for change in Hawaii. Yet it must be done. There are some who would silence any dissent. Sometimes there are severe political, media, economic and social consequences for speaking out. Ask former UH Chancellor Tom Apple. Ask me.
With a New Year, we remain hopeful with a new Administration we may actually get some positive change.
We now have a Governor, who was one of us in the Senate, whom I respect -with an engineering and not a community organizing background. As he said, government can't do it alone; people must get involved and do some of the "heavy lifting" to solve our problems still left over from years past.
Our job is to restore and encourage the public's confidence in our process, and to be more transparent and accountable ourselves, while empowering our citizens. We have to do more than just talk or make speeches; we need appropriate action. We can do this.
The public feels disconnected because we haven't done a good enough job. There haven't been consequences for bad behavior in government. We have been lax in the oversight of billions of taxpayer dollars.
Your Senate Minority offers a thoughtful, effective 5 point Action Agenda for 2015:
(1) Economic Diversification and Budget Reduction.
(2) Meaningful, Outcome Based Education
(3) Health Connector, Obamacare and HHSC Alternatives.
(4) Changes to the Public Utilities Commission and Analysis of the Proposed HECO Merger.
(5) Reduction in the Cost of Living for our Beleaguered Residents, middle class and poor.
Your Senate Minority continues to caution that Hawaii's economy, overall, has not turned an economic corner and that many more of our citizens and small businesses are struggling needlessly.
Every national organization rates Hawaii worst in economic opportunity. We are now worried that more than 20,000 of our active duty Army and 30,000 dependents-which we too often take for granted or criticize-may leave Hawaii causing more than $1 billion in economic loss. Our military is more than dollars; they contribute to all of our society. This decision will be made outside of Hawaii. In Hawaii, we can improve our business climate and diversify by listening to those who have the proven ability to create jobs.
Our $25 billion operating budget is bloated and must be trimmed as we propose. So too our $20 billion unfunded liability. It can be done. WE MUST PROMISE NO NEW TAXES! We can't throw good money after bad for the "Black Hole" that is the flawed O'ahu fixed rail transit. It is all about development, not alleviation of congestion. It is $700 million over budget already. No extension of the General Excise Tax should be permitted by this Legislature. Not one more penny to those who purposefully misled the taxpayers of this State. Otherwise, elected officials are like enablers who assist drug addicts to become more destructive.
Stop this project now and provide real transportation alternatives like "Hot Lanes," already advanced.
Our educational system in Hawaii has shortchanged the students and parents who pay for education. We need a comprehensive financial and managerial audit of both the DOE and my Alma Mater, the University of Hawaii. UH said it's proud to have "52% of the students able to graduate in 6 years." That's not good enough.
The Legislature must say NO to continued short falls in DOE programs, the annual UH Athletics deficits and the spendthrift UH Cancer Center, and YES to more classroom teaching. Tuition must reflect actual costs, not large salaries to coaches and VIPs.
The PUC has been without effective leadership for the past several years. Too many dockets remain open. We have worked with new Chair Randy Iwase in the past. We will support a changing mission for the PUC and an objective analysis of the planned $4 billion HECO merger. My staff member Kathryn Higa, an experienced mergers and acquisitions analyst, has already been on this task since December.
The Hawaii Health Connector has sped through millions of dollars without noticeable results or honesty in presentations. The data it provides to the Legislature does not match up with federal data. It should receive no more taxpayer funds.
The Medicaid computer failure may cost taxpayers up to $100 million more. The Legislature has to monitor outside contracts when agencies don't.
We should continue to practice compassion, but not ignorance, in helping people truly in need while separating those who prey on others and game the system.
We have to increase our residents' standard of living by reducing their burdensome costs. We can do this by food and medical GET tax relief, and by advancing federal affordable cargo shipping reform of the Jones Act. The Senate Minority has been cooperating with like-minded lawmakers in Alaska, Guam and Puerto Rico.
We have many other positive legislative changes. Come see us and help our bills be heard.
On behalf of the Senate Minority, I pledge our continued efforts to support good legislation regardless of who introduces it; to examine and report honestly on the impact of all bills, and to work toward ending Legislative exemptions for ourselves for laws we pass on to others.
We celebrate our God-given liberty, and our ability to change. Our goal should not just be a "New Day," but, a Better Day. This is not a partisan issue. Together, we must navigate a different course with a vision of how much greater Hawaii can be.
Finally, this is the "Year of the Sheep." My hope and advice is that the taxpayers and voters of Hawaii will stop being sheep, and become more independent, vigilant, and hold their elected officials to a higher standard.
God Bless Hawaii, our Armed Forces men and women, and the United States of America."
Thursday, January 8, 2015
The Senate Minority weighs in on the sustainability of the General Fund
Senator Sam Slom says, "If we make bad assumptions now, they will have long term negative effects on our state."
Today, the Senate Minority Office published a report questioning the sustainability of the state's General Fund, and considered the following four key factors affecting the state's financial plan:
Continuation of executive spending restrictions (imposed by the previous Executive Administration);
Revised projections of General Fund revenues by the Council on Revenues from 3.5% to 4.5%;
Expiration of collective bargaining agreements in June 2015, and related costs of renewing these contracts; and,
Overall long term General Fund expenditure growth estimated at 2.3% despite actual growth of 4% over the last decade
In its report, the Senate Minority urges that adjustments be made to the Executive Biennium Budget for fiscal years 2016 and 2017, in order to avoid dangerously low cash reserves that could negatively affect the state's bond rating and lead to new or increased taxes to bail the state out in the future.
Sen. Slom said, "Hawaii is at an economic and fiscal tipping point. For years, the Legislature has ignored certain figures or made assumptions based on false or misleading indicators in creating a financial plan for the state. This has led to a reactive rather than proactive approach to the budget, as each poor decision catches up with us at some point. If we keep ignoring financial realities eventually the state is going to find itself in a desperate situation financially. We have to start planning responsibly, and our Executive and Legislature should be open, honest and forthright with the public, government departments and unions."
The Senate Minority report was partly prompted by the Council on Revenues meeting Tuesday, where the Council revised its General Fund revenues forecast to 4.5% growth, up 1% from its September 2014 forecast. This translates to a $55.5 million positive impact on the General Fund for fiscal year 2015. However, even with that small revenue increase and the $163.3 million the state will be saving if it extends the executive spending restrictions put in place by former Governor Abercrombie, the General Fund is still facing serious depletion, for two reasons.
First, a significant number of collective bargaining agreements will expire at the end of the current fiscal year, in June 2015. Extending those agreements means the General Fund will absorb $97 million that is currently not accounted for in the Biennium Budget. Secondly, the Budget predicts a conservative 2.3% overall growth in expenditures out of the General Fund, but over the last decade, actual growth in expenditures has been about 4% or $498.6 million over fiscal years 2018-2021. Senator Slom said, "The people cannot afford any more inaccurate fiscal assumptions. As legislators, and as servants of the public, we have to use the best evidence there is, so that we end up with a financial plan built on a reasoned approach and sound assumptions."
Thursday, January 8, 2015
Excessive use of special funds impacts us all
The Auditor of the State of Hawaii recently released a report on the University of Hawaii's use of special funds. Today, Senator Sam Slom expressed his view in reaction to the report.
Senator Slom said, "Our state Constitution requires a balanced budget. That means the state should not spend more than it takes in. Unfortunately, the use of special funds has grown over recent years and it has become a habit of some members of the Legislature and Executive to use special funds to avoid the Constitutional requirement of balancing the budget. The recent Auditor's report is evidence that hundreds of millions of dollars can bypass legislative and public scrutiny and distort Hawaii's budgeting process as a result."
In the December 2014 report, the State Auditor recommended that 17 existing UH special funds, revolving funds, and trust funds be discontinued for falling short of four key legislative criteria. The four key legislative criteria include that a special fund must:
serve the purpose for which it was originally established;
reflect a clear nexus between benefits and charges made upon the users or beneficiaries of the program;
provide an appropriate means of financing the program or activity; and
demonstrate the capacity to be financially self-sustaining.
In 2013, Senator Slom pointed out the difficulty imposed by special funds on the Legislature's ability to put together an accurate operating budget in the Hawaii Senate Minority Office's Alternative Biennium Budget. Slom stated, "The creation of special funds is troublesome, because appropriations that are made out of special funds are not subject to an equivalent level of legislative scrutiny as those appropriations from the general fund. In addition, most special funds are not used for the purpose they were established for and ultimately are 'raided' by the Legislature for other purposes in the general fund."
Non-general funds, like special or revolving funds, are separate from the general fund. Any revenues from state taxes, like the General Excise Tax (GET), Individual Income Tax or Motor Vehicle Tax, flows into the general fund. In contrast, non-general funds (like revolving funds, trust funds and special funds) are revenues earmarked for specific purposes. Examples of non-general funds include the State Highway Fund and the Mental Health and Substance Abuse Fund. By law, these non-general funds must be evaluated regularly to determine whether they meet the four key legislative criteria.
Slom indicated his position on special funds saying: "A special fund should not be considered unless there is a direct revenue stream like a tourist ticket price or the like. It should not be some made-up revenue stream like 'the legislature will put in an amount, plus a portion of this tax, and all donations by individuals, corporations, etc.' In addition I believe that all taxes should go directly into the general fund budgeting process so the people can clearly see what comes in and what goes out. Transparency of government is my number one goal. The people of Hawaii should always know what their government is doing."
Special funds accounted for almost a quarter of the state operating budget as of 2012 (see report). Since being elected to office in 1996, Senator Slom has voted against the creation of every new special fund.