Abercrombie Administration Approach to Addressing FYs 11-13 Budget Shortfall and Amendments to the FB 11-13 Executive Biennium Budget

(February 22, 2011)

MULTI-YEAR FINANCIAL SUMMARY GENERAL FUND FISCAL YEARS 11 - 13 (in millions of dollars) Estimated FY 11 Estimated FY 12 REVENUES: Executive Branch: Tax revenues Nontax revenues Judicial Branch revenues Other TOTAL REVENUES 4,451.9

512.1

36.2

75.2

5,075.3

4,897.0

495.6

36.8

25.2

5,454.6

Estimated FY 13 5,190.9

502.4

37.4

38.2

5,768.9

EXPENDITURES Executive Branch: Operating Specific appropriations Other Sub-total 4,943.3

5.3

50.8

4,999.3

5,568.2

5.0

180.7

5,753.9

5,754.0

5.0

258.5

6,017.5

Legislative Branch Judicial Branch OHA Lapses TOTAL EXPENDITURES 32.2

130.7

2.5

(65.0) 32.2

141.1

2.5

(65.0) 32.2

143.6

2.5

(65.0) 5,099.7

5,864.7

6,130.8

REV. OVER (UNDER) EXPEND.

CARRY-OVER (DEFICIT) Beginning Ending (24.4) (410.1) (361.8) (22.2) (46.6) (46.6) (456.7) (456.7) (818.5) Adjustments needed to balance fin. plan Ending Balance (71.6) (410.1) (361.8) 25.0

25.0

25.0

2

Summary of Abercrombie Approach to Addressing FYs 11-13 Budget Shortfall FY11 FY12 FY13 Shortfall

plus: Proposed Revenue Measures plus: Proposed Expenditure Measures

Subtotal - Excess (Shortfall) Other Potential Revenues:

COR revised estimate of 3% growth Utilize Rainy Day Fund (1) Utilize HHRF (2)

Balance - Excess

(71.6) 20.0

(5.3) (46.3) 45.6

46.0

0.0

91.6

45.3

(410.1) 232.8

(192.7) 15.4

49.1

0.0

42.0

91.1

106.5

(361.8) 277.7

(211.9) 127.8

51.9

0.0

0.0

51.9

179.7

(1) Current available balance of $46 million (2) Current balance of $117 million; Required minimum of $75 million for re insurance purposes 3

Proposed Revenue Measures FY11

HB 1092 & SB 1319 Repealing state tax deduction Exemption for Fed AGI threshold 0.0

0.0

State tax on pension income Exemption for Fed AGI threshold 0.0

0.0

0.0

Repeal exclusion of royalties from penalties TAT and TOT enhancements: Increase rate on timeshare properties HB 1062 & SB 1289 Raise alcohol tax by 50% Establish a soda tax HB 1019 & SB 1246 Reduces GF amounts and increases SF amounts from barrel tax HB 1089 & SB 1316 Annual federal tax conformity measure HB 1060 & SB 1287 Funding of Chief Information Officer position HB 1084 & SB 1309 Lt. Governor SF State share of Medicaid settlement Total Proposed Revenue Measures 0.0

0.0

0.0

0.0

0.0

0.0

0.0

20.0

20.0

(13.2) (3.0) (1.0) (0.1) 0.0

232.8

FY12

94.0

(30.3) 157.0

(44.7) 2.5

26.6

20.0

25.0

FY13

94.0

(15.0) 157.0

(44.7) 2.5

31.2

20.0

50.0

(13.2) (3.0) (1.0) (0.1) 0.0

277.7

4

Reduce TANF services

Proposed Expenditure Measures FY11

9.6

(HB 1066 & SB 1293, Budget Message) 0.0

Reduce Medicaid services (Budget Message) Labor savings (CB negotiations) ERS - Increased contributions (HB 1037 & SB1264) Base pay amendment to AFC calculation (HB 1042 & SB 1269) 0.0

0.0

0.0

EUTF - Eliminate Medicare Part B reimbursements (HB 1041 & SB 1268) Current on ERS only (Budget Message) Health prevention and other health programs (HB 1062 & SB 1289) Other adjustments Redirect monies from HTA to State Parks ($6M) and SFCA ($4M) U funds Total Proposed Expenditure Measures 0.0

0.0

0.0

(4.3) 0.0

5.3

FY12

28.5

25.0

88.2

0.0

13.2

41.7

0.0

(10.0) 6.1

0.0

192.7

46.8

26.2

(20.0) (6.0) 0.0

211.9

FY13

28.5

50.0

88.2

(15.0) 13.2

5

Overview of Abercrombie FB 11-13 Operating Budget

Abercrombie FB 11-13 Operating Budget Statewide Totals by Means of Financing

FY 2012 Revolving Funds, $4.3, 1% Federal Funds, $28.3, 6% Trust Funds, $2.0, 0% Inter-departmental Transfers, $11.0, 2% General Funds, $133.8, 27% FY 2013 Revolving Funds, $3.8, 1% Federal Funds, $(17.9), 7% Trust Funds, $1.5, 1% Inter-departmental Transfers, $11.1, 4% Special Funds, $311.4, 64% Total $490.8 M Special Funds, $78.9, 29% General Funds, $160.4, 58% Total $237.8 M

7

Abercrombie FB 11-13 Operating Budget Statewide Totals by Department - All Funds

HHL, $6.8, 1% UOH, $10.0, 2% AGS, $11.4, 2% LNR, $12.7, 3% DEF, $13.7, 3% TRN, $24.6, 5% BUF, $61.4, 13% HMS, $68.7, 14%

FY 2012

PSD, $4.3, 1% EDN/LIB, $4.2, 1% HTH/HHSC, $4.2, 2% PSD, $4.7, 2% HTH/HHSC, $4.2, 1% OTHER, $5.5 , 1% AGS, $6.0, 2% BED, $6.5 , 3% HHL, $6.8, 3% DEF, $9.4, 4% UOH, $10.0, 4% LNR, $11.6, 4% LBR, $263.3, 53% EDN/LIB, $27.1, 10%

FY 2013

OTHER, $5.9 , 2% HM S, $(10.4), 4% BUF, $95.3, 37% TRN, $60.7, 23% Total $490.8 M Total $237.8 M

8

Abercrombie FB 11-13 Operating Budget Statewide Totals by Department - General Fund

FY 2012 LNR, $2.1, 2% HTH, $2.3, 2% BED, $2.5, 2% DEF, $6.8, 5% UOH, $10.0, 7% HM S, $47.8, 36% Total $133.8 M GOV, $1.6, 1% PSD, $1.6, 1% OTHER, $4.1, 3% BUF, $54.9, 41% HTH, $2.3, 1% BED, $2.3, 1% DEF, $2.4, 1% UOH, $10.0, 6% HMS, $19.6, 12% EDN/CS, $23.6, 16% FY 2013 PSD, $2.1, 1% LNR, $2.0, 1% OTHER, $4.5, 3% BUF, $91.5, 58% Total $160.3 M

9

Summary of Abercrombie FB 11-13 General Fund Operating Budget

Items previously included in GF financial plan but not included in base budget:

COFA client Medicaid funding

FY 2012

13.2

TANF benefits & services (revised amount) Repay deferred FY 09 ERS contribution (revised amount) Increased full year EUTF contributions per FY 11 agreement Total financial plan items 49.5

0.0

54.3

117.0

FY 2013

13.2

49.5

36.8

54.3

153.8

Items not included in either GF financial plan or base budget:

Medicaid benefit reduction (25.0) (50.0) Total other than initiatives 92.0

103.8

10

Summary of Abercrombie FB 11-13 General Fund Operating Budget

(continued) Abercrombie Initiatives: DAGS

-- data center operations, procurement & reapportionment

FY 2012

0.9

0.2

DOA

-- Agri research statisticians, planner & Irrigation System Revolving Fund supplement

AG

-- position funding

B&F

-- various positions, treasury consultant & ARRA oversight (FY 12 only)

DBEDT

-- restoration to support economic development

DOD

-- maintenance costs, emergency management support & juvenile justice & delinquency program support

DOE

-- student & althletics transportation, nursing services, Early Learning Council & Charter Schools

GOV & LG

-- restore full-year funding 0.9

0.7

2.5

6.8

0.7

1.9

FY 2013

0.8

0.2

0.9

0.4

2.3

2.4

23.6

1.8

11

Summary of Abercrombie FB 11-13 General Fund Operating Budget

(continued) DOH

-- Early Intervention Program & civil union program costs

DHS

-- Pre-School Open Doors Program, new Medicaid eligibility system & other program support

DLNR

-- Conservation & resource enforcement, historic preservation & dam safety

PSD

-- Kapolei Court Complex deputy sheriffs, partially funded ACO's, re-entry work furlough program & vehicle replacement

TAX

-- MTC audit fee, positions to maintain tax computer systems & Tax Review Commission (FY 12 only)

UH

-- community colleges, UH Hilo & strategic outcomes

FY 2012

2.3

10.1

2.1

1.6

1.1

10.0

Total Initiatives Grand Total Operating 41.8

133.8

FY 2013

2.3

7.0

2.0

2.1

0.7

10.0

56.5

160.3

12

Overview of Abercrombie FB 11-13 CIP Budget

Abercrombie FB 11-13 CIP Budget Statewide Totals by Means of Financing

FY 2012 County/Private Revenue Bonds, Contrib., Special Funds, $72.4, 6% $9.3, 1% $103.9, 9% Federal Funds, $196.2, 16% G.O./G.O.R. Bonds, $824.3, 68% Total $1,206.2 M Special Funds, $101.2, 20% Revenue Bonds, $44.6, 9% FY 2013 G.O./G.O.R. Bonds, $247.8, 49% Federal Funds, $109.4, 22% Total $503.0 M

14

Abercrombie FB 11-13 CIP Budget Statewide Totals by Department - All Funds FY 2012

HHL, $36.3, 3% BEDT, $46.1, 4% DEF, $51.7, 4% AGS, $63.2, 5% HTH/HHSC, $71.0, 6% UOH, $80.0, 7% EDN/LIB, $98.0, 8% LNR, $26.7, 2% HMS, $15.7, 1% OTHERS, $21.5, 2% BUF, $489.0, 41% HTH/HHSC, $17.0, 3% LNR, $26.3, 5% AGS, $30.0, 6% HHL, $35.0, 7% HMS, $35.3, 7%

FY 2013

AGR, $9.9, 2% OTHERS, $15.1, 3% EDN/LIB, $98.0, 20% TRN, $207.0, 17% Total $1,206.2 M DEF, $56.3, 11% TRN, $82.1, 16% Total $503.0 M

* The $489 million requested in FY 2012 and the $98 million for FY 2013 in the Department of Budget and Finance will be transferred to the State Educational Facilities Improvement Special Fund and spent by the Department of Education, pursuant to Sections 36-32 and 237-31, HRS.

BUF, $98.0, 20%

15

Abercrombie FB 11-13 CIP Budget Statewide Totals by Department - G.O./G.O.R. Bonds

FY 2012 HMS, $15.7, 2% HHL, $16.2, 2% LNR, $26.2, 3% BED, $42.3, 5% AGS, $60.0, 7% HTH, $71.0, 9% AGR, $10.3, 1% DEF, $8.1, 1% PSD, $5.5, 1% DEF, $5.2, 2% AGR, $5.9, 2% BED, $12.1, 5% HHL, $15.0, 6% HTH/HHSC, $17.0, 7% LNR, $26.3, 11% FY 2013 PSD, $3.0, 1% BUF, $98.0, 40% UOH, $80.0, 10% Total $824.3 M BUF, $489.0, 59% AGS, $30.0, 12% HM S, $35.3, 14% Total $247.8 M

* The $489 million requested in FY 2012 and the $98 million for FY 2013 in the Department of Budget and Finance will be transferred to the State Educational Facilities Improvement Special Fund and spent by the Department of Education, pursuant to Sections 36-32 and 237-31, HRS. 16

Summary of Abercrombie FB 11-13 GO/GOR CIP Budget

DOA

-- various irrigation system & watershed improvements.

DAGS

-- State facilities & Aloha Stadium health/safety/maintenance improvements, energy conservation improvements, Kamamalu building & Washington Place renovation.

B&F

-- reauthorize lapsed GO bonds for SEFI encumbrances*

FY 2012

10,260,000 60,000,000

DBEDT

-- Rental Housing Trust Fund, Iwilei senior residence, FTZ renovations & Kalaeloa infrastructure

DOD

-- National Guard facilities and armories renovation/improvements & Veteran’s Cemetery improvements.

DOE

-- Statewide facility improvements, Ewa Makai Middle School, Keeau Middle School classroom building, McKinley High fire safety improvements & Kapolei II Elementary School. * 390,965,000 42,330,000 8,060,000 98,000,000

FY 2013

5,900,000 30,000,000 0 12,100,000 5,234,000 98,000,000 * NOTE: DOE SEFI appropriations are technically SF appropriations; however, source of SEFI is GO bonds which are authorized in B&F. To avoid double counting, amounts for B&F in this table reflect only reauthorizations of lapsed GO funding for SEFI encumberances; new authorizations are shown in DOE.

17

Summary of Abercrombie FB 11-13 GO/GOR CIP Budget

(continued) FY 2012

16,250,000

DHHL

-- water systems at Makuu, North Kona, & Honokowai, & Papakolea sewer system.

DHS

-- improvements at Kuhio Park Terrace, Mayor Wright Homes, Palolo Valley Homes, Lanakila Homes, Hale Laulima & Puahala Homes.

DOH

-- improvements at Hawaii State Hospital, Waimano Ridge & other DOH facilities.

HHSC

-- electronic medical records system & hospital improvements.

15,670,000 26,182,000 44,839,000

FY 2013

15,000,000 35,300,000 1,303,000 15,667,000

DLNR

-- rockfall & flood mitigation & improvements to State parks, boating/ocean recreation facilities & forest/outdoor recreation facilities.

PSD

-- correctional facilities renovations, Kulani Correctional Center exploratory well & planning correctional facility development.

26,250,000 5,500,000

UH

-- capital renewal & deferred maintenance & Leeward Community College’s Education & Innovation Instructional Facility.

80,000,000 26,300,000 3,000,000 0 Total GO/GOR CIP 824,306,000 247,804,000 18

Summary of Abercrombie FB 11-13 Federal Fund & Revenue Bond Fund CIP Budget

FY 2012 FY 2013

Federal Funds: DOA

-- agricultural water systems

DBEDT

-- FTZ import-export incubator

DOD

-- National Guard facilities & armories

DHHL

-- homestead projects & improvements

DLNR

-- boating facilities

DOT

-- airport & highway improvements 5,700,000 3,000,000 43,683,000 20,000,000 4,000,000 0 51,036,000 20,000,000 500,000 123,331,000 0 34,396,000 Total 196,214,000 109,432,000

Revenue Bonds: DOT

-- airport improvements

DOT

-- highway improvements Total 38,992,000 33,445,000 72,437,000 35,488,000 9,079,000 44,567,000 19