By Derrick DePledge
The record $844 million state budget surplus last fiscal year and the projected carry-over balance for this fiscal year could trigger the constitutional requirement for a tax refund or deposit into the state’s emergency reserves by fiscal year 2016.
Under the state Constitution, a tax refund or reserve deposit is required when the surplus exceeds general-fund revenues by 5 percent for two consecutive years.
Lawmakers have often met the requirement with a token $1 tax refund. Voters in 2010 amended the constitution to also allow the requirement to be satisfied with a deposit into the emergency reserves.
Both Gov. Neil Abercrombie and Kalbert Young, the state’s budget director, said it is a good issue for the state to have after the difficulty of the last recession.
But Abercrombie, at a news conference Monday at the state Capitol where he announced his supplemental budget request for fiscal year 2015, was critical of the constitutional requirement. Voters in 1978 adopted the requirement for the tax refund.
"I realize that this passed but it had more to do with political fashion of the moment. `Oh yes, if there's extra money, let's not let the government keep it,'" the governor said. "That's a very shallow way of looking at it. The government isn't keeping anything. What the government is and should be is a reflection of peoples' needs that they otherwise cannot assume on their own."