Governor Details Plan to Close Budget Shortfall

Between now and June 30, 2011, the state will need to close a gap of another $730 million, which means the state will have lost a total of $2.7 billion in projected revenue over the past year.  This is a fiscal emergency that is unprecedented in size and scope and one that requires immediate action.

The Governor shared that her Administration has already made difficult decisions over the past year to address the projected loss of $2 billion in revenues.  These steps have included:

- Restricted State general fund discretionary spending by 8 percent;
- Put a freeze on hiring, travel and purchases of new equipment;
- Restructured the state's long-term debt and debt payments;
- Transferred excess balances from certain special funds into the general fund;
- And utilized federal stimulus funds.

"None of these actions included reductions to the salaries and benefits of state workers despite the fact that 70 percent of our budget goes to pay the wages and fringe benefits of 46,000 employees who work for the State government," the Governor noted.

The Administration's plan closes the additional $730 million revenue shortfall through a combination of employee furloughs, a reduction in health insurance benefits for low-income adults and the deferral of certain payments.

"To balance our budget in the fairest possible way without slowing our economic recovery, we must adopt fundamentally sound fiscal measures," said Governor Lingle.  "This is a time when everyone must pull together, share the burden of these unprecedented times and be part of the solution."

Starting July 1, and continuing for the next two years, all state employees will be furloughed for three days per month.  The statewide furlough program, which affects the Governor, Lt. Governor and cabinet members, will save an estimated $688 million and will avoid having to layoff employees. 

Without the furlough plan, the state would have had to lay off up to 10,000 employees to realize an equivalent amount of savings.

Governor Lingle shared that the state will continue working each day to provide the best services possible and asked for the public's patience as departments and their employees work to minimize the effects of these furloughs on public services.

• Read and watch the Governor's remarks.
• "Worker furloughs the only sensible option," Pacific Business News, June 5, 2009
• "Lingle takes decisive action," Maui News, June 3, 2009
• "State furloughs preferable to layoffs," Honolulu Star-Bulletin, June 3, 2009