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Monday, August 09, 2010

One state's wonky finances: Hawaii has $1.4 BILLION in unspent revenue (but the politicians want MORE taxes!)

Ten years ago this summer I went to work as a full-time reporter. It was with a... well let's just say they don't make outfits like this anymore. Probably one of the last of the newspapers with that old-school journalistic 'tude. Anyhoo, my very first assignment was to investigate the budget that the General Assembly had proposed for North Carolina's next fiscal term.

A full decade later and I still get fits of anger just thinking about the crap I found in those hundreds of pages of monetary monstrosity that I picked through line by agonizing line.

(A space shuttle launch complex for North Carolina? Really? And how much money did we spend trying to put that here when there's already a good working one in Florida?)

Even if it's a long drive and a fair swim away from the Tarheel State, what fellow journalist/blogger and friend of The Knight Shift Danny de Garcia II forwarded to me this evening about his home state of Hawaii brought back those memories of wrath and disillusionment from a decade ago. Danny and colleague Kyle Shiroma just went public with the findings of their investigation: Hawaii has $1.4 BILLION sitting unspent in its coffers... even while many of its elected officials insist upon higher taxation!

From the report at Grassroot Institue of Hawaii...

Hawaii’s taxpayers might be shocked to discover that while numerous voices in and out of the local political establishment are calling for an increase in the General Excise Tax to cover any future budget shortfalls in education or other state services, upwards of $1.4 billion dollars in unspent excess funds may be sitting in special funds, several of which were tagged by the auditor almost a decade ago for repeal.

According to the Department of Budget and Finance’s “Reports on Non-General Fund Information: Fiscal Years 2006-2012,” some 186 special funds spread across twenty different departments hold an estimated $1,412,357,203 in unspent revenues over and above their operational requirements. In plain language, if the estimates provided by the Department are correct, the state has more than just pocket change stuck in its seats.

Until recently, few members of the public were aware of how many special funds existed, what their purpose was or how much money the State of Hawaii was holding in these accounts. For this reason, Grassroot Institute analysts decided to review the Department’s worksheets and itemize all the special funds to see just what they contained.

The Department of Transportation is reported as having $582,449,161 in unspent special funds (41% of the state’s excess balances), Department of Labor and Industrial Relations has some $327,412,159 unspent (23%) and the University of Hawaii holds another $119,225,732 (8%) making them the top holders of excess revenues.

The worksheets show figures such as $6,968,895 unspent in the Works of Art Special Fund (AGS 881) for public aesthetics and art education – a fund which was advised by the Auditor to be repealed in 2001 and its balances lapsed into the General Fund – and on the opposite end of the spectrum, zero balances in the Agricultural Park Special Fund Escrow Account (AGR 141HA) which also continues to exist despite a recommendation for repeal.

Why should taxpayers approve an increase of taxes to balance the budget when the state’s own reports show over $1.4 billion in excess sitting in their accounts collecting interest? If these excess balances were divided equally among the population, there would be checks of close to $1,100 going to every man, woman and child in Hawaii.

If this kind of financial mis-sight is going on in a state like Hawaii then... is it too far to assume that much the same - if not worse - is going on in other states as well?

This kind of thing might... emphasis on might... entice me to give North Carolina's budget the hairy eyeball again for the first time since 2000. Provided that I have at the ready a glass of whiskey, a gun and two bullets. Just in case.


Danny de Gracia II said...

Thanks for blogging on this, Chris. And actually in what may come as a surprise, this concerns North Carolina also because all of our major candidates for Governor are advocating that the best way to plug the budget hole is to pull down/maximize Federal funding ... i.e., they want to rob you guys of more Federal taxes to pay for Hawaii.

So North Carolina needs to say "no!" to a Hawaii bailout!