House speaker eyeing outbreak’s affect on tax revenue

HONOLULU — The speaker of the state House of Representatives said Friday he wants to form a committee to examine the potential economic effects of the coronavirus outbreak so lawmakers can be prepared to cut spending if tax revenue drops sharply.

Scott Saiki recalled the state had to slash $2.1 billion in spending from state budgets over a three-year period when tax revenue sank during the recession a decade ago. That led to furloughs for government employees, a four-day week for public school students and dramatic cuts to mental health and other services.

The speaker said he wasn’t currently proposing to cut spending and build up financial reserves. He said he wanted to assess the economic effect of the outbreak before taking such steps.

But such cuts were a possibility, he said.

“We don’t want to leave the public in a lurch with last-minute draconian proposals like Furlough Fridays,” Saiki told reporters after announcing the committee idea on the House floor. “We do not want to put the public, we do not want to put workers and students, in those kinds of positions.”

Saiki said House members would vote Tuesday on a resolution that would create a select committee including government officials, industry leaders and union members.

The panel would study the economic impact of the outbreak, develop mitigation plans and monitor conditions.

Saiki said the committee would need to make initial recommendations before the Legislature adjourns on May 7.

The committee will follow the example of a war preparedness committee formed in 2003 after the U.S. invasion of Iraq, Saiki said. That panel advised lawmakers on the war’s effect on Hawaii.