Gov. Linda Lingle plans to use federal money meant for public education to help close a $90 million budget deficit for the fiscal year that ends in June.

The state should receive an estimated $192 million in state fiscal stabilization funds from the economic stimulus package approved by Congress and President Obama. Most of this federal money is meant to help kindergarten-through-12th-grade public schools and the University of Hawai'i.

But Lingle is expected to announce today that her administration needs to use the federal education money for the deficit. The education money is just one component of the governor's updated plans for this fiscal year and the two-year budget cycle.

State schools superintendent Pat Hamamoto has already expressed her concern about the governor's plans to state lawmakers.

"The governor's plan is to use the stabilization money now when we have a shortfall. If we use it now, we're compromising all the work that we need to do to ensure that our kids are still moving forward," Hamamoto said.

$90M SHORTFALL

The precipitous decline in state revenues due to the recession has forced Lingle and state lawmakers into difficult and unpopular decisions on the state budget. This month's lower forecast by the state Council on Revenues has caused Lingle to come up with another $90 million to get through the last three months of the fiscal year. Lingle and lawmakers have to find an additional $170 million to balance the budget over the next two years.

Lingle will likely explain today that it is her administration, and not the state Department of Education, that will decide how to use the federal stimulus money.

'THE BIGGER PICTURE'

The state will receive about $192 million in stabilization funds split in two areas: $157 million for education and $35 million for other government services.

The Lingle administration plans to use $90 million of the DOE's share of the federal money — about $112 million — for this fiscal year and the rest in fiscal year 2010 to close the deficit.

The administration will use the $35 million for other government services on a joint education plan for DOE and UH.

"They're looking, obviously, at their own individual needs and their own spending," Georgina Kawamura, the state's budget director, said of the DOE and UH. "We're looking at the bigger picture."

The state House draft of the budget approved last week assumes the state will use the federal education money over the two-year budget cycle, not this fiscal year.

State Rep. Marcus Oshiro, D-39th (Wahiawa), the chairman of the House Finance Committee, said he shares Hamamoto's concerns.

"I've said this over and over again. The federal stimulus monies are one-shot deals," he said, adding that spreading the federal money out over two years would be better than using most of it this fiscal year.

Hamamoto is expected to meet with members of the Board of Education's Committee on Budget and Fiscal Accountability today to ask that the board request that the governor use stabilization funds to restore some $86.6 million in budget cuts planned each year over the next two years.

Included in the $86.6 million in cuts is about $40 million that the BOE recommended to the governor in October. The cuts would eliminate about 240 positions from the public school system, including resource teachers, speech pathologists, occupational therapists and other support staff on the state level.

The DOE has said that those cuts do not represent school-level programs or staff and some of the positions were already vacant.

DOE REQUIREMENTS

Last week, the House further reduced the DOE's budget by $30.7 million.

"When (lawmakers) did the budget and the cuts, they were anticipating that the stabilization money would be used to restore programs that are required by law, mandated for health and safety and other programs essential to our core mission," Hamamoto said.

Hamamoto said she fears the public school system will lose out on critical federal dollars since the stabilization funds were intended to be a one-time infusion of cash over the next two years to prevent layoffs and cutbacks.

"You either spend it now and have nothing next year or you bite the bullet this year and look at what we can do to save services for our kids," she said.