The State today released its final tax revenue figures for the fiscal year that just ended. As expected, the numbers show Hawaii's economy continues to weaken.
Somewhat unexpected, those numbers are not as bad as some had feared.
Tax collections for fiscal year '09 are down 436 million dollars or about 9 and a half percent compared to the year prior.
The State's budget shortfall, which was previously up to 730 million dollars, is now at 786 million.
That means the state must make another 56-million dollars in cuts.
But some expected that number could go as high as 150-million.
The Governor says after this next round of cost cuts, our government comes out looking nothing like it is today.
The fiscal year just ended on a sour note -- actual tax collections coming in far below the last council on revenues projections.
It means the unresolved budget gap over the next biennium is up to just below 800 million.
"We will not be the same government when we come out of this process. We can't be the same government we were a year ago and survive financially," says Governor Linda Lingle.
So how to survive? Departments have been told to slash even more non-labor expenses, and Lingle says unions should expect layoff notices by week's end listing position numbers, names and bargaining units. she says unions will have a chance to give feedback though its not a negotiation.
"Depending on what they say, I'll react back to them, then at some point not too long after that the individual notices would go out," says Governor Lingle.
Any firings would take effect in 90 days -- she says these lists won't include doe or University of Hawaii. Also Hawaiian Homelands, Commerce and Consumer Affairs and Transportation are spared because any savings from those couldn't go to the general fund anyway.
"So that means the numbers are that much higher in the remaining departments," says Governor Lingle.
Unions have said layoffs would move already tense talks in the wrong direction.
"We have never advocated that the employers lay people off yet it's been stated by every economic expert in town that the path the governor has chosen would be bad for the state's economy," says Randy Perreira, HGEA.
The governor says she's open to finding common ground in formal proposals that could involve wage cuts or the furloughs the unions blocked in court.
"We continue to believe that furloughs are the right approach," says Governor Lingle.
"It was one of the unions that came up with the idea of furlough and again it had a lot of appeal to me because I believed at the time I could do the furloughs unilaterally administratively," says Governor Lingle.
She says an appeal of the court ruling could be ahead. Meanwhile she says she's available for labor talks once unions bring a formal offer response.
