LEO 'ELELE - TRUSTEE MESSAGES

OHA's 2009 legislative
budget struggle

Colette Y. Machado Trustee, Moloka'i and Lāna'i

Since the opening of the 25th Legislature in January, OHA has struggled to remind lawmakers of the State's obligation to OHA's beneficiaries when prioritizing and appropriating state funds.

In light of the economic situation of the state, OHA was asked by lawmakers to reduce its general funds budget request by 20 percent. OHA obliged and submitted a revised budget showing a reduction in general fund requests from $3.08 million to $2,469,659 million, which was approved by the House Finance Committee in March 2009.

On April 7 at a scheduled decision-making meeting, the Ways and Means Committee cut OHA's general funds budget to zero (0).

This action taken by the WAM Committee will severely impact OHA's ability to carry out the purpose of the Office as defined in Chapter 10. OHA will not be able to provide services or support to Hawaiians without the infusion of general funds. The general funds support to OHA is not just for financial reasons, but is provided to enable OHA to support Hawaiians as well as native Hawaiians to achieve its purpose as defined in Chapter 10.

OHA is concerned that this Senate Draft 1 of the OHA budget bill could be problematic legally as it is inconsistent with the language of Opinion No. 03-04 (May 30, 2003) of the attorney general of the State of Hawai'i. That opinion was issued in response to a request by Sen. Les Ihara Jr. and then-Rep. Ezra R. Kanoho on the legal authority for transferring ceded land receipts to OHA without a current, specific legislative appropriation. On page 2 of that opinion, the attorney general stated that the Hawai'i Constitution, in Article XII, Sections 5 and 6, makes the elected trustees of OHA, not the Legislature, responsible for determining how native Hawaiians' portion of ceded land receipts are spent to further the purposes of Section 5(f) of the Admission Act.

However, the present SD 1 does not draw upon state general funds at all. Instead, it finances all of OHA's budgetary items solely from OHA trust funds and requires that those funds be used in certain amounts in certain years for certain purposes. In so doing, the SD 1 appears to directly contravene what the attorney general described as the Hawai'i Constitution's intent "that OHA have exclusive authority to decide how much of, when, and in what specific way, the native Hawaiians' share of the ceded land receipts is to be used to better the conditions of native Hawaiians." (page 10 of Opinion No. 03-04).

Elimination of the general funds combined with the decrease in Trust funds available to OHA based on performance of its investment portfolio will leave OHA with spending shortfalls in FY 2010 of $3.8 million and $5.2 million in FY 2011.

OHA cannot cover the FY 2010 and FY 2011 budget shortfalls with trust funds as the BOT-approved budget includes the maximum 5 percent spending limit (as allowed by OHA's Spending Policy) in both years. The only way it can bring expenditures in line with its budget is through the reduction of personnel and programs.

The reduction of $1,469,669 in program operations (ID 175) will be detrimental to OHA's services and support to Hawaiian beneficiaries. The general funds allow OHA to serve less than 50 percent Hawaiians as the 5(f) trust funds can only be used for native Hawaiians. OHA-funded programs like Alu Like Inc., Native Hawaiian Legal Corp. and Nā Pua No'eau will not receive the level of funding they need if HB 900 remains at zero.

As the economic crisis looms and budgets tighten, our legislators will be pressed to prioritize and deliberate policies to meet the needs of our State. We must remind our elected officials that the economy is a temporary crisis compared to the injustices we intend to address. OHA's budget bill will likely head to conference in the coming weeks, where OHA hopes to receive some reprieve from the current budget situation.