The head of the state Department of Human Services yesterday said the proposed budget for her agency would result in cuts that are "draconian" and would cause "significant harm" to the people who need services the most.

But the chairman of the House Finance Committee said Lillian Koller's assertion that funds are being cut from her budget are incorrect. In fact, said Rep. Marcus Oshiro, D-39th (Wahiawā), his committee restored about $5 million to the department's budget.

In a letter sent yesterday to the Senate Ways and Means Committee, DHS director Koller blasted the budget measure approved by the House Finance Committee, which she said would result in millions of dollars in cuts. Koller wrote that the House version would prevent the state from spending more than $73 million in federal funds next fiscal year and cut the Child Welfare Services budget by $23 million, or 52 percent.

The budget bill was passed by the House last week and was referred to the Senate Ways and Means Committee. The committee will hold an informational briefing at 10 a.m. today in Conference Room 211 at the state Capitol.

Koller asked in her letter that the Senate restore cuts made by the House. She said the current measure would block the state's ability to spend millions in federal funding and force the state to tap into limited general funds.

"This is the rainy day when we must take advantage of every opportunity to switch state general fund expenditures to federal funds," Koller wrote. "This is the time to spend more federal funds, not less."

The proposed cuts come as the state is facing a $1.2 billion budget deficit through June 2011. Koller said the way to tackle the shortfall is to reduce general fund expenditures.

"Instead, the Finance Committee is doing the opposite," she said.

Oshiro disagreed with Koller and said she was putting her own spin on the budget numbers. He pointed out that the measure would add $5 million to the department's budget to "address the needs of the most vulnerable" and would not reduce the budget.

Oshiro said the House measure would restore positions and personnel to provide the services. He said Koller's idea of saving money is to reduce the workforce, which he said would result in a decline in service.

"She seems dead-set on firing people who provide direct services," Oshiro said. "Her decisions of setting up a new welfare eligibility program by shutting down all of the walk-in offices, having welfare applicants use the Internet for services, terminating case workers, I find that reckless."

Koller wrote that the "reduction in force" was instituted last year because of the state's budget shortfall. She said the problem with the House measure is that it would restore positions that are administrative and do not provide services directly to the needy.

Oshiro said that rather than criticize the measure in a press release, Koller should meet with him to iron out their differences.

"I challenge her to come in, sit down, we'll open our books, go line for line, dollar for dollar, and discuss her proposal," Oshiro said. "If it makes sense, we should adopt it. If it does not make sense, we should reject it."