Governor to Address People of Hawai`i

"The Council on Revenues' latest reduced revenue projections show that the state budget shortfall is much more severe than earlier projected," Governor Lingle said in a statement, noting that she will be meeting throughout the weekend with staff to identify options to close the projected $185.6 million shortfall between now and June 30, 2009, as well as a projected $500 million shortfall in the fiscal 2010 – 2011 budget period that begins July 1, 2009. 

Last week, in anticipation of the Council on Revenues' reduced projections, the Governor instructed all state departments to implement a 2 percent reduction on discretionary spending for the remainder of FY09.

When the Council on Revenues began lowering its forecasts last year, the Lingle-Aiona Administration took immediate steps to control and reduce FY09 expenditures, including a 4 percent restriction on discretionary spending and a hiring freeze implemented in June 2008, followed by an additional 2 percent restriction on discretionary spending applied in January 2009.

The Administration also recommended additional steps to close the projected shortfall when the Council on Revenues lowered its revenue forecast for FY09 again in March 2009. These included the use of federal stimulus money from the State Fiscal Stabilization Fund (SFSF) to restore cuts to the Department of Education budget and the use of reserve funds from the Emergency and Budget Reserve Fund (EBRF), otherwise known as the Rainy Day Fund.

However, the Legislature did not authorize the use of SFSF funds for FY09, which ends June 30, 2009, and limited the amount of funds that could be used from the EBRF, requiring the additional discretionary spending restriction.

• Read and listen to the Governor's Weekly Radio Address: Council on Revenues Update