Monday, January 7, 2008

House Finance members question the Governor's financial plan

House Finance members questioned the Governor's financial plan based on a 5.7% tax growth and the Dept. of Budget & Finance's procedures for determining the release of grants-in-aid (GIA) funds at today's Committee on Finance informational hearing. The State Auditor reported on her inability to access information from the Department of Transportation on the Hawaii Superferry, and the Ethics Commission explained how their investigation of the Bureau of Conveyance is being resolved.

Governor's Financial Plan

The Dept. of Budget & Finance submitted the administration's financial plan, which was based on the August 2007 Council on Revenue projections of a 5.7% growth in tax revenue. In December 2007, actual tax revenues came in at 3.2%, therefore, legislators found it highly unlikely that tax revenues will reach 5.7% in the next six months. As such, the administration's financial plan would probably leave the state $94 million short at the end of the next fiscal year. However, the administration's financial plan may be adjusted in accordance with the results of the Council on Revenue report to be announced Wednesday.


The release of GIA funds after they have been appropriated by the legislature has been an on-going concern. Finance Chair, Rep. Marcus Oshiro, questioned B&F's criteria for determining when grant funds are released, and which GIA recipients receive money first. Non-profits related to health, safety and other critical issues are supposed to be at the top of the list. However, lawmakers questioned why non-profits like Organ Donors and the Weed-and-Seed program of Kalihi didn’t seem to meet the department's criteria.

Georgina Kawamura, B&F Director, said that other state departments are the actual expending agencies; it is those departments that review the program recipients and determine if they fit the criteria, not Budget & Finance. "If the department can't make the case, we don't make it for them."

Rep. Oshiro then wondered if B & F was just a "rubber stamp" department. That's not the case, according to Kawamura. After receiving the GIA list from the legislature, they find documents that go with the request and work with the individual organizations. However, they are not the final authority on the release of monies.

"The governor is the final authority. We just make recommendations," said Kawamura.

Rep. Ward joined the discussion and said that the before the legislature drills B & F about their money-releasing criteria, the GIA committee needs to look at their own operations.

The Office of the Auditor

The Office of the Auditor addressed the issue of information accessibility as they are unable to complete the audit of the Department of Transportation's decision to exempt the Hawaii Superferry from the environmental review process without the release of several more boxes of documents. According to Marion Higa, state auditor, the DOT only delivered 20 -25 percent of what their office requested. Furthermore, the department did not comply with requests for digital copies in lieu of hard copies. Since missing the November 2007 deadline to provide the remaining documents, the DOT has yet to produce more information.

To expedite the release of information, Higa suggested that the legislature hold those being audited responsible for their tardiness. You should hold public forums to demand an explanation and their reasons for delay, she said.

Rep. Ward had some reservations about digging for minutiae about the Superferry when the majority of Hawaii residents wants the Superferry. He asked Higa what kinds of scenarios she foresees from obtaining the rest of the documents. Rep. Oshiro interjected and announced that she was just doing her job. Higa reiterated his point by saying that responding would be speculation and that the Office of the Auditor is only doing what the legislature required of them. They will not be able to complete their audit on time unless they receive the information requested soon.

The Hawaii State Ethics Commission

Executive Director Daniel Mollway said the original investigation of the Bureau of Conveyances that produced biased information and cost taxpayers $15,000 was not a total loss. Staff attorneys are conducting the subsequent investigation and only $1000-$2000 will be used for computer forensic investigation. Even though the former investigator had a personal interest in the investigation, some of his collected documents can be used. The first investigation gave the commission a sense of what is there and what is not there.

The investigation will be finalized in February and presented to the commission. If there is no ethics violation, a public statement could be issued; however, if there is an ethics violation, they are restricted by law from divulging info. Note that the Ethics Commission's investigation is separate and apart from the Joint Legislative committee's investigation of the Bureau of Conveyance's management. The legislative committee has hired the State Auditor's Office to conduct that investigation.


Doug said...

More posts in this style, please!

A firsthand report from a hearing that lasts several hours and with only a few notable bits of information passed at random intervals. This is very useful. Seriously. The media can't be everywhere at once, and they are not about to write stories about every little factoid that they hear anyway.

T.D. said...

Hi, Doug. Thanks for the comment. We'll be sure to post more reports like this.

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