SAN FRANCISCO (Reuters) - Hawaii's meticulous tourism records are thick with minus symbols, the basis for a projected state budget gap of $1.23 billion that Governor Linda Lingle says is a "fiscal crisis" that cannot be closed with spending cuts alone.
While strains of "Mele Kalikimaka" greet tourists, Lingle's proposal this week to balance Hawaii's budget over its two-year cycle ending in June 2011 lacked similar Christmas season cheer because visitor numbers and spending are weak, Georgina Kawamura, Lingle's director of budget and finance, told Reuters in a telephone interview on Wednesday.
"I can only remain hopeful that we are now at the bottom and will start to pick up," Kawamura said.
For the current fiscal year, Hawaii's budget is seen suffering a $721 million gap, followed by a projected $509.5 million deficit in the coming fiscal year.
"The stark reality of continuing declining general fund revenues means the state does not have sufficient resources to cover all expenditures," Lingle said on Monday in a bluntly worded budget message to lawmakers.
She said it is possible Hawaii's revenues may not recover to pre-recession levels until 2014.
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Arizona Collapse Near
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Oklahoma Has Biggest Deficit of All States
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It became 'the new normal' at some point for all states and municipalities to operate in a deficit mode, constantly issuing 'bonds' to banks (basically loans at interest to the state by the bank) to fund everything instead of operating within their budgets the whole time.
ReplyDeleteI beleive most municipalities have gone 'Houston' and spent any and all retirement funds / pension plans funds etc a long time ago and now constantly have to issue 'bonds' to pay for whatever. It's also a method the banks reap a fat profit from the taxpayers, essentially getting their cut at every step of the way.
Want to pave a 1/2 mile road? Borrow from the bank so they get their 'cut' even if you had the money in the coffers. It's ugly.
It's a gigantic clusterfuck of the highest proportions.
I regularly travel to Kauai (twice this December). I've seen several restaurants close; one (Poipu Beach Broiler) posted a sign apologizing for the closure, citing economic conditions. And I've seen the Sheraton Kauai cut back on many of the small perks they used to provide to guests--I give them crap about it every time I'm there, but they are now used to my poking.
ReplyDeleteThe States Bonds usage is going to start becoming a problem and what happens when they are cut off?
ReplyDeleteThe States have many reasons for their talk and resolutions about Amendment 10 of the US Constitution.
They are all TOTALLY SCARED of the public finding out the truth, because it would all collapse in minutes.
People have NO IDEA how close to the edge we have been for a while now. And the edge is crumbling ... and if you step back you will find another cliff edge behind you.
It's real simple. Balance your budgets. Cut expenditures across the boards, end or reduce pensions, and simply balance your darn budget and screw the special interests. Zero sympathy here for these idiotic states with leaders with no integrity. Just cut your darn expenses.
ReplyDelete10:41 Exactly. Pretty soon, no one is going to buy bond issues because no one beleives they'll get paid back.
ReplyDeleteBalance the states budget now.
ReplyDeleteHy I lived in Hawaii as a youngster, I went to Jr High and HS there before I left for the army.
ReplyDeleteI know one thing is this is one of the biggest welfare stats out there, the locals were all on some sort of state or fed aid, and sittin around drinkin beer and eatin poi and pork.
Its been a while since I seen the place, but I can understand what the deal is if it hadn't changed since than. All they ever know was to screw the tourists and over charge for everything.
I had a buddy that even was able to sell "genuine" Waikiki beach sand in small bottles right on the street of the beach lolololol, and the silly tourists bought it.
You dont seem to understand. It's beyond 'just cut your darn expenses". While it is true that they have been spending on the wrong things, there are at least three things affecting all states: property tax losses, sales tax losses, and increased costs related to gas and decreased credit. When people say the economy is shrinking, it isnt just a matter of balancing the budget.
ReplyDeleteBe crisis savvy
ReplyDeletePhotocopy money
Our family takes a traditional Christmas trip every other year. We were excited to travel to Hawaii, but the legislature passed a significant tax on lodging. We chose to go on a cruies instead to the Carribean. We had hoped that Hawaii would not raise taxes on their primary revenue source. Whn they did, we changed our plans. Hope and Change does work! We revolted against higher taxes.
ReplyDelete