THE SENATE	S.B. NO.	3072
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE BUDGET.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that the current aggregate margin of the general fund expenditure ceiling does not reflect the underlying economic and fiscal conditions of the state. The original intent of the general fund expenditure ceiling was to prevent the state from spending revenues faster than the growth of the economy. The legislature recognizes there has been insufficient funding allocated for the Employment Retirement System and Employer Union Trust Fund in the past, and the current aggregate general fund expenditure margin of $1.6 billion for FY 2014 does not account for the state's combined unfunded retirement benefit liability of $22 billion. To account for and minimize the effects of the failure to incorporate the unfunded retirement liability when calculating the general fund expenditure ceiling each year since 1978-1979, the legislature realizes that a more stringent fiscal requirement and a current adjustment is needed to ensure that state spending remains in line with economic growth.

     SECTION 2.  Section 37-91, Hawaii Revised Statutes, is amended to read as follows:

     "§37-91  Definitions.  As used in sections 37-92 to 37-94:

     "Expenditure ceiling" means the maximum general fund appropriations allowed in any year.  The expenditure ceiling shall be determined by considering the fiscal year [1978-1979] 2013-2014 general fund appropriations as the expenditure ceiling.  The expenditure ceiling for succeeding fiscal years shall be computed by adjusting the immediate prior fiscal year expenditure ceiling by the applicable state growth.  When revisions are made to the total state personal income, the expenditure ceiling shall be recalculated on the basis of the latest available data, going back to fiscal year [1978-1979] 2013-2014.

     "General fund" means the fund used to account for all transactions which are not accounted for in another fund, but excluding federal funds received by that fund.

     "State growth" means the estimated rate of growth of the State's economy and shall be established by averaging the annual percentage change in total state personal income for the three calendar years immediately preceding the fiscal year for which appropriations from the state general fund are to be made.  When revisions are made to total state personal income, state growth shall be recalculated on the basis of the latest available data.

     "Total state personal income" means the total state personal income as defined by the state personal income series published by the United States Department of Commerce, Social and Economic Statistics Administration, Bureau of Economic Analysis, or its successor, for each year for which such income has been determined and published, including all revisions to the series.  For the current and next succeeding calendar year for which such income has not been determined or published, it shall mean the total state personal income for such year as estimated by the council on revenues."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Expenditure ceiling calculated

Description:

Provides for the expenditure ceiling to be calculated using 2013-2014 general fund appropriations total.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.