Kyle: My question is on the state workers. I see no reason why they should be exempt from sharing the pain. Companies are laying off, and as the state's largest employer, the state must come to terms with the economy and reduce the workforce. What are your thoughts?

Georgina Kawamura: I agree with your thoughts that we need to have shared sacrifice. The governor's proposals regarding labor savings are right in line with what you have shared.

Jason: Do you support raising taxes? If not, what programs are you willing to cut? If you do support raising taxes, which ones?

Kawamura: I do not support raising taxes. It would be devastating to our struggling families and to our small businesses. The governor has submitted a balanced financial plan that does not require raising taxes or making any more reductions to programs that were proposed in the budget submitted in December 2008.

Kim: Before thinking of layoffs for state workers, have they (state workers) discussed furloughs or pay cuts as an alternative option?

Kawamura: The governor does not support layoffs of state workers because we should not be adding to the unemployment numbers. Instead, we continue to discuss all options for reducing our labor costs which may include furloughs, pay cuts or adjustment of benefits.

Jo: How imperative is it for the state to cut the Department of Education budget? Shouldn't we be spending more instead of less on schools? Is cutting the school budget the only way to balance the budget?

Kawamura: The governor's executive budget proposal included reductions to the DOE budget that was proposed by the Board of Education.

It is important to realize that spending reductions had to be proposed because of the revenue shortfall, which was $1.1 billion at that time.

Every department was subject to spending reductions in the proposed budget. Since then, our Council on Revenues has reduced revenues by an additional $900 million, bringing us to this point of needing to balance our budget while facing a $2 billion shortfall.

The governor has not proposed any additional cuts to the DOE's budget.

Nahoaloha: The governor suggested that she won't know the outcome of labor negotiations until after the end of session, adding that the Legislature ought to compute the budget based on what she estimates she'll save in labor costs.

How will that work, exactly? Would the Legislature have to pass a temporary budget and then make final revisions in special session? It seems very unusual to me.

Kawamura: While we remain optimistic that contract negotiations may be concluded before the end of the session, the governor's point is important to note if we don't complete discussions by the time the contracts end.

Budget and Finance has suggested the technical solution to address this situation.

Nahoaloha: Can you provide a little detail about that "technical solution"? Thanks.

Kawamura: We propose to reduce an appropriation in Budget and Finance by the estimated savings amount in FY 10 and also in FY 11.

Subsequently, upon a contract agreement, B&F will allocate specific savings to each department.

Lisa: What is the state doing to help small businesses during these tough times?

Do you see the large number of restaurants and other businesses going under? Is there an updated count on business closures?

Kawamura: The governor's approach is to focus on programs that will strengthen our economy and to limit proposals such as tax increases that will be devastating to small businesses.

I'm sorry that I do not have an updated count on business closures.

Tina: What is the state doing to prepare for the additional homeless, due to the economy? It seems that social services are just being cut back further and further. This is short-sighted.

Kawamura: We have been working on this area for many years.

The state has been successful in developing additional shelters on O'ahu and Kaua'i.

The governor's focus is on the development of affordable housing, which includes rentals and home ownership opportunities.

Funds for homeless programs continue to be maintained. Also, over the years when our economy was doing well, funds for social services has increased dramatically.

Kaimana: I've been reading about this battle with the schools. Why didn't your departments discuss this with school officials first? It seems like a battle that could have been avoided.

Kawamura: We did! Therefore, we were surprised to learn of this reaction from the superintendent.

Charles: How does your budget affect higher education? And what happened to the West O'ahu campus? Our students need to have an option of staying home for college in this tough economy. We should do what we can to improve all education at all levels.

Kawamura: The governor's executive budget proposal included reductions for the university that were recommended by the Board of Regents.

The West O'ahu campus plans are proceeding. They broke ground. The total development will be reliant on the private agreement entered into by the university.

Teri: You speak of pay cuts for all state employees, does that mean that everyone, including the governor, lieutenant governor, you, highly paid school principals, athletic directors, the superintendent and legislators will also be taking a pay cut? We have not heard anything about this and it concerns me that the discussion is always about the workers. What about the "bosses" who make large salaries?

Kawamura: The governor's proposal is to include everyone in this shared sacrifice. Some of these individuals, including me, are subject to the Legislature's approval of a new law.

Ladyluck: Does the state have a broader financing plan to make sure our hospitals are fiscally healthy during this downturn?

Kawamura: This is an important issue that must be addressed by the Legislature as we look at the long-term financial stability of our public hospitals.

Issues such as procurement, negotiating labor costs and the level of service each public hospital provides are vital to this discussion.

Mililani Mom: Why not offer early retirement incentives? The workforce will be reduced.

Kawamura: To offer early retirement incentives, there is an upfront cost that will need to be covered and right now we do not have that ability to cover that additional cost. Also, in the long run, it will add to our unfunded liability of the retirement system.

Garrett: Can you please explain to the public how the governor's budget, which includes cuts to employee wages and cuts that will negatively impact important social programs for the disadvantaged, will revitalize Hawai'i's economy?

Kawamura: We have $2 billion less to spend. Therefore, we need shared sacrifice from everyone in this difficult time.

Cuts to employee wages actually helps social programs because if we don't reduce wages, many other programs will have to be cut to make up the shortfall.