Gov. reassures state's financial footing in light of fiscal cliff talk
Historic bond sale will help cushion pending federal cuts
The recent sale of general obligation bonds will help strengthen Hawaii’s financial foundation in light of the pending federal cuts said Gov. Neil Abercrombie.
"We are not falling off any cliffs. We have climbed up. We are moving in the other direction away from the fall," Abercrombie said.
The state credits the recent sale of close to $900 million of general obligation bonds at historic low interest rates.
Budget Director Calbert Young called that a sign of financial stability for Hawaii's future.
"This transaction generated three times the demand than there was available," said Calbert Young.
That unprecedented sale, they say should help Hawaii weather the loss of federal funding should congress and the President fail to reach a compromise on a spending plan.
The governor is bracing for potential cuts of between $25 to $40 million dollars, which will be reflected in the draft budget he presents to lawmakers in about two weeks.
Social services could absorb much of that hit.
The Abercrombie administration intends to make more than just a token gesture to deal with the state's unfunded liabilities of more than $8 billion.
"We are going to come to grips and we are going to wrestle this giant to the ground," said the governor.
Union workers will take note: Young hinted the state could restore the 5% pay cuts that government unions took in the last round of contract talks.
Young said he was most wary about the impact that the end of Bush era exemptions could have on discretionary income that in turn would affect Hawaii's economic drivers like tourism.
As for military spending, the governor seemed pretty confident that any cuts to the defense budget will not have a drastic effect on the Pacific Command.
"I expect whatever takes place in terms of defense budget cuts will be less likely to zero in on Hawaii and the Pacific region,” said Abercrombie.
The governor believes the cuts will come in the procurement of big military platforms for things like weapons systems.
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