A New Day in Hawai‘i: the Lingle to Abercrombie Transition and the State Budget

Abstract

DOI 10.1515/cjpp-2012-0031 Calif. J. Politics Policy 2012; 4(3): 117–139 Research Article Todd L. Belt* A New Day in Hawai‘i: the Lingle to Abercrombie Transition and the State Budget Abstract: The State of Hawai‘i’s budget for Fiscal Year 2012 was balanced by a combination of spending cuts and the closing of tax loopholes. The process pitted a new governor, working on his predecessor’s budget proposal, against a some- what fragmented legislature. Several controversial proposals were floated, but in the end, Hawai‘i did what it usually does, and passed the tax increases on to the tourists. Keywords: Hawai‘i State Budget; Neil Abercrombie; Rental Car Tax; Transient Accommodations Tax *Corresponding author: Todd L. Belt, Department of Political Science, University of Hawai‘i at Hilo, 200 W. Kawili St., Hilo, HI 96720-4091, e-mail: tbelt@hawaii.edu 1 Introduction On December 5, 2010, the state of Hawai‘i ended eight years of divided govern- ment, inaugurating Neil Abercrombie as governor. Two-term Republican Gover- nor Linda Lingle handed the reins of power to Democrat Neil Abercrombie, who promised a “New Day for Hawai‘i”. The deck is stacked against the new governor in many ways. The economic downturn that began in 2008 continued to create substantial budgetary head- aches during his first year in office, culminating in a $1.3 billion shortfall for the fiscal year (FY) 2012. Former Governor Lingle’s budget, transmitted to the leg- islature just before Abercrombie’s inauguration, reflected vastly different priori- ties than those of the incoming governor. Abercrombie and his staff scrambled to introduce an adjustment package shortly after the state legislature convened, but they could only do so much. Among the priorities for funding were capital improvement projects (CIPs), servicing of debt obligations, and the funding of