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Abercrombie: No new taxes, spending cuts in budget

By Audrey Mcavoy

Associated Press

Published: Monday, Dec. 19 2011 9:25 p.m. MST

Hawaii Gov. Neil Abercrombie, left, and Budget and Finance Director Kalbert Young announce the administration's budget for the 2013 fiscal year at a news conference at the state Capitol in Honolulu on Monday, Dec. 19, 2011. The governor says the state won't need to raise taxes or cut spending further to balance the budget.

Audrey McAvoy, Associated Press

Enlarge photo»

HONOLULU — Gov. Neil Abercrombie said Monday that the state won't need to increase taxes or cut spending any further to balance the budget during the upcoming fiscal year. The state will also be able to pay back the rainy day fund that was used to balance the budget this year, he said.

Abercrombie attributed the state's fiscal condition to decisions he and the Legislature made during the past year.

"We don't have to deal with more cuts, we don't have to deal with more threats of furloughs or anything like that because we've made those decisions. What we have to do is stick to them now," Abercrombie said at a news conference on his budget for the 2013 fiscal year that begins in July.

Legislative leaders cheered the governor's announcement.

"I'm really happy and elated that there is no proposal for next year by the administration on any tax increases," said House Speaker Calvin Say, D-St. Louis Heights-Wilhemina Rise.

But he noted that federal budget cuts could affect Hawaii state programs, and lawmakers will have to prepare if they want to restore funds cut by the federal government.

Say said this would be a focal issue for the House in the new legislative session beginning in January.

The state budget includes $2 billion in spending on state programs paid for with federal funds, excluding defense, he said.

The speaker said there was no proposal to consider new taxes in the House — like a tax on soda drinks that Abercrombie proposed during the last legislative session — to pay for new programs because the state hasn't had enough money to pay for existing programs.

"We'll just try to stabilize the overall growth of state government and see where we can try to continue to control our expenditure side," Say said.

Sen. David Ige, chairman of Senate Ways and Means Committee, said he welcomed the governor's announcement and said the state could begin to look at spending money on important programs like preventative health care, early childhood education and long-term care for the elderly.

"We are pleased that financial actions taken last session are working. We are grateful to hear we are not facing another budget deficit and we can begin to make some strategic investments in people and programs moving forward," said Ige, D-Aiea-Pearl City.

The only Republican in the 25-member Senate also welcomed the governor's announcement. But he cautioned circumstances could change.

"In addition to what the executive said, you still have the state Legislature," said Sen. Sam Slom, R-Diamond Head-Hawaii Kai. "And you have key legislators that want to promote their own programs or they want to respond to constituencies that did have their amounts reduced and they want that back again."

Slom said the state shouldn't be looking for new revenue streams. The state has an opportunity to do things differently and begin operating better and at lower cost, he said.

The budget Abercrombie announced is a supplemental budget for the second half of the period covering fiscal years 2012 and 2013.

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