Effect of Budget Crisis on HDOA

Chairperson, Hawai`i Board of Agriculture
October 5, 2009

I've been meeting with groups in the agricultural community to explain the state budget crisis and how it is affecting the Hawai`i Department of Agriculture (HDOA). Having received comments from many people saying they appreciate getting a clear explanation of the situation, I’ve prepared this overview to foster a better understanding of the challenges we are facing.

The state’s dropping revenue projections from March 2008 to September 2009 were estimated to be a $2.9 billion deficit over the biennium.  This is an economic decline of unprecedented magnitude.  The current prediction is that we will not return to the pre-recession revenue levels until 2012 at the earliest.

Approximately $2 billion of the gap had been closed through the Governor’s budget and the legislature by May 2009.  A $900 million shortfall still needed to be addressed.

To help reduce the general funded state budget, Governor Linda Lingle instituted the following:

• Governor, Lt. Governor and Cabinet officials (State Directors and Deputies) took a five percent pay cut, plus a two-day-per-month furlough – totaling a 14 percent cut in wages.
• Restricted the budgets of the University of Hawai`i, Department of Education and the Hawai`i Health Systems Corporation by 14 percent.
• Called for a three-day-per-month furlough for all other employees of executive branch departments.  However, the furlough was contested in court by the public worker unions.
• With the furlough action blocked, options to close the gap are limited. 
• On August 4, 2009, Governor Lingle announced that 1,100 state employees were given notice of a reduction-in-force (RIF).  Only general-funded departments were initially affected including the HDOA and the departments of Health, Human Services, Accounting and General Services, Business Economic Development & Tourism, Labor & Industrial Relations, Land & Natural Resources, Defense, Budget & Finance, Public Safety, Tax and Human Resources Development.
• Departments that are primarily funded through special funds and federal funds with very few positions paid by the general fund were not part of the initial RIF.  These departments included Transportation, Commerce & Consumer Affairs and Hawaiian Homelands.
• 600 state employees who are “exempted excluded” employees are under a three-day-per-month furlough, also amounting to a 14 percent wage decrease beginning in mid-September.  This includes many of the Deputy Attorneys General.
• The Governor does not have fiscal control over the Office of Hawaiian Affairs, the Judiciary and the State Legislature.  However, the Legislature did institute a five percent pay cut for legislators.

2009 Legislative Session

During the 2009 Legislative Session:

• HDOA’s General Funds were reduced by 19 percent
• 25 positions were eliminated
• 36 positions were transferred to special funds
• All research and extension funds were deleted

Although severe cuts were made throughout the state budget during the last session, it was still not enough to make up for the growing budget deficit.

RIF in HDOA

Out of 214 general funded positions within HDOA, 96 positions are currently on the RIF list and will be abolished on or around November 20 if this course continues.  The RIF positions equate to 44 percent of HDOA’s general fund staff.   (Note:  the number of RIF positions has been amended to reflect the restoration of some of the plant quarantine inspector positions through alternate funding sources.)

The following is a breakdown by division:

(Note:  there are no G-funded positions in the Ag Loan Division and the Agribusiness Development Corporation)

RIF Effects and Efforts to Mitigate Effects

All divisions are holding discussions with stakeholders and prioritizing industry needs.  In addition, all divisions will try work with Federal partners and others to develop solutions and share responsibilities.

Plant Quarantine (PQ) Inspections

When the RIF was first announced, 50 of the 83 plant quarantine inspector positions were to be eliminated.  However, in September, 22 of the 50 positions were restored by tapping alternate sources of funding (through the Hawaii Invasive Species Council and the Pest Inspection, Quarantine and Eradication Special Fund), leaving 28 positions still slated for RIF.

Even with the restored positions, the RIF will impact the branch’s capacity to inspect incoming shipments, conduct invasive species response and inspect and certify plant material for export.

PQ addresses the following inspection priorities:

• Aircraft, vessels and cargo arriving from Guam and other high-risk areas for brown treesnake.
• Imported food, such as produce, seafood and other processed food items at risk for red imported fire ants (RIFA) and other pests.
• Imported livestock feed material, such as hay, corn meal, cottonseed, mash, etc.
• Live animals arriving under PQ permits, such as non-domestic pets.
• Microoganisms arriving under PQ permit
• Imported plants and plant parts for nursery, seed and farm production and retail sales
• Responding to pest reports and investigations
• Nursery certification for export products
• Intrastate inspection and clearances for ag commodities

PQ is also working with its partners to improve efficiency and systems:

• Implement a cargo manifest system to improve identification of high-risk cargo for more efficient scheduling of inspectors and quick release of low risk cargo.
• Centralizing inspections for major retail importers and air cargo for more efficient use of inspection time and manpower.
• Work with mainland shippers to improve cargo loading to assist in more efficient inspections in Hawai`i.
• Working with the U.S. Department of Agriculture (USDA) regarding additional sources of funds for inspection.
• Continue to monitor payments into the Pest Inspection, Quarantine and Eradication Special Fund.

The size of state government, the types of services it offers and the way it delivers those services is undergoing change to fit a drastically downsized budget in these economic conditions.  We ask for the cooperation of all of our partners in working

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