Expenditure Control

Expenditure Ceiling
The Constitution provides that the Legislature shall establish a General Fund expenditure ceiling which shall limit the rate of growth of General fund appropriations, excluding federal funds received by the General Fund, to the estimated rate of growth of the State's economy as provided by law and that no appropriations in excess of such ceiling shall be authorized during any legislative session unless the Legislature shall, by a two-thirds vote of the members to which each house of the Legislature is entitled, set forth the dollar amount and the rate by which the ceiling will be exceeded and the reasons therefor.

The Governor is required to submit to the Legislature a plan of proposed aggregate appropriations for the State which includes the executive budget, proposed grants to private entities, any specific appropriation measures to be proposed by the executive branch and estimates of the aggregate proposed appropriations of the judicial and legislative branches of government.   In any year in which this plan of proposed general fund appropriations exceeds the estimated expenditure ceiling, the Governor must declare the dollar amount, the rate by which the expenditure ceiling would be exceeded and the reasons for proposing appropriations in excess of the ceiling amount.

The Constitution provides that no public money shall be expended except as appropriated by law.   It also requires that provision for the control of the rate of expenditures of appropriated State monies, and for the reduction of such expenditures under prescribed conditions, shall be made by law and that General Fund expenditures for any fiscal year shall not exceed the State's current General Fund revenues and unencumbered cash balances, except when the Governor publicly declares the public health, safety or welfare is threatened, as provided by law.

Operating Expenditures
Maximum limits for operating expenditures are established for each fiscal year by legislative appropriations.   Pursuant to Part II, Chapter 37, HRS, monies can be withheld by the Governor or the Director of Finance to ensure the solvency of each fund.       

Capital Improvement Expenditure
Annual capital improvement expenditure plans are also prepared to control and monitor allotments and expenditures.   Prior to the initiation of a project, it is reviewed for adherence to the State's General Plan and other economic considerations, and as to its justification.   The Governor must approve the release of funds before any action can be taken.