The Hawai'i Legislature opened its 60-day session last week with a $574 million budget surplus as a backdrop.

House and Senate leaders found common ground on many issues, particularly education, affordable housing and alternative energy, but differ substantially about whether some of the surplus should be used for tax relief.

Other rifts may emerge as lawmakers begin to go over hundreds of different bills.

In unexpected political drama, U.S. Rep. Ed Case announced he would challenge U.S. Sen. Daniel Akaka in the Democratic primary for the Senate seat, prompting several state lawmakers to jump into the race to replace Case in Congress.

ISSUE WATCH

Education: The Lingle administration and Republicans began to question the state Department of Education's claim of a $525 million backlog of repair and maintenance projects. Democrats said school repair and maintenance will be a priority in spending the surplus, and the administration also has called for more spending. But expect the department to have to do a better job of explaining the backlog before more money is approved.

Affordable housing: Democrats released a proposal to build 10,000 to 15,000 affordable units over the next five years to respond to a housing shortage and high real-estate costs. The plan involves an initial $78 million, then another $286 million over five years.

Tax relief: Senate President Robert Bunda, D-22nd (North Shore, Wahiawa), again called for substantial tax relief, creating a wedge between him and House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo, Wilhelmina Rise), who has said tax relief should come only after other state needs are met. The Lingle administration and Republicans will try to exploit the opportunity and build public pressure for tax relief, which may be the liveliest political issue this election year.

Alternative energy: House Democrats want $100 million for energy conservation measures in public buildings, which would help reduce the state's electricity bills.

OVERHEARD

"Some cynics have said that the only purpose of taxpayers in the state of Hawai'i now is to act as ATM machines for the Democratic Party."

— State Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai)

LINKS

Check out First Readings, a blog from the Legislative Reference Bureau, at www.hawaii.gov/lrb/libblog.

COMING UP

State of the State: Gov. Linda Lingle delivers her State of the State speech at 10 a.m. tomorrow. Her remarks to lawmakers at the state Capitol can be seen live on KHON 2, KITV 4, News 8, KGMB 9 and 'Olelo (channel 53).

Big day: The deadline for bill introductions is Wednesday.