Bill 884 Set for hearing.

Senate Bill 884 has been set for a hearing on Monday, April 27 at 3 p.m. in Room 229 at the Capitol. This bill would raid various special funds, transferring moneys to the General Fund, where they could be used for anything from road repairs to education to legislators' pay raises. The ostensible purpose of this is to make up for a projected $1.76 billion shortfall in tax revenues due to the recession. But it could be used to gut such programs as the Campaign Elections Fund and the HI 5 beverage container deposit funds.

The latest version of the bill at the Legislature's Web site authorizes the state to raid at least two dozen special funds for “excess” money, including $33 million from the Hawaii Tobacco Settlement Special Fund, $20 million from the HI 5 fund, $12 million from the Emergency Medical Services Special Fund, $10 million from the Rental Assistance Revolving Fund, $9 million from the Wireless Enhanced 911 fund, $8 million from the Clean Air Special Fund, $6 million from the Special Fund for Disability Benefits, $5 million from State Risk Management Revolving Fund, $4 million Environmental Management Special Fund, $1 million from the Agricultural Loan Revolving Fund, 3.3 million from the Compliance Resolution Fund, $2 each from million from the Special Land and Development Fund, Hydrogen Investment Capital Special Fund and the Housing Finance Revolving Fund, $1.5 million each from the Stadium Special Fund, the Neurotrauma Special Fund, the Judiciary Computer System Special Fund and the Medicaid Investigations Recovery Fund, $600,000 from the State Identification Revolving Fund, $1 million from the Drug Demand Reduction Assessments Special Fund. The bill also would trancfer 5 percent of the receipts of several other funds to the general fund for "central service expenses," and woul require other funds to turn any interest earned on their accounts over to the general fund.The Campaign Elections Fund isn't mentioned in this draft of the bill, but its house companion bill, HB 39, contains a clause stating that the fund "$1 in excess of the requirements of the fund" and authorizes the transfer of that "excess" to the general fund. The "$1" a placeholder for an amount to be filled in later. If that paragraph is moved into the Senate draft on Monday and that $1 is replaced by more than $5 million, it could jeopardize the pilot program, currently scheduled to start in 2010, that would provide full public funding for county council elections on this island.

If the various funds really do have such excesses, then the bill could provide for more efficient use of state revenues. But many of those funds come from specific revenue streams that were authorized only for specific purposes. The Hawaii Tobacco Settlement Special Fund, for instance, was the result of a legal settlement with the tobacco companies, and was intended to finance efforts to mitigate the damage caused to those companies' victims. The Special Elections Fund contains the voluntary donations of taxpayers who checked a box on their tax forms thinking that their donation would go toward publicly funded elections. If that money becomes part of the general fund, ironically, it could be used to pay for various projects espoused by the very special interests that donors thought they were helping to thwart.

In some cases, the bill transfers the authority to determine "excessive funding" from the Auditor's office to the legislature itself. In the case of HI 5, it deletes a clause that authorized the "adjustment" of deposit rates in the case of excess funds, and instead transfers consumers' extra nickels to general revenue. And it explicitly claims a nearly unfettered government power to raid special funds in the future:

The legislature finds that section 37-53,
Hawaii Revised Statutes, provides the governor nearly unlimited
authority to transfer non-general funds to the general fund.

Apparently, the legislature is taking that authority for itself as well. If this bill passes, our beverage deposit nickels and our donations for publicly funded elections might end up paying bureaucrats' salaries or financing legislators' pet projects.

SB 884 goes to Conference Committee at 3:00 PM on Monday, April 27. Key legislators to contact on the issue include Sen. Donna Mercado Kim and Sen. Colleen Hanabusa.