The state House Finance Committee yesterday approved a state budget draft that would add $50 million to reduce teacher furloughs next school year but would also make cuts to public education that could increase class size.

The $50 million in new money is about half of what educators believe is necessary to eliminate all 17 furlough days next school year. Most teachers have taken 12 of the 17 furlough days scheduled for this school year, including today's furlough.

But the budget draft shows lawmakers are willing to commit additional state money to reduce furloughs despite the state's $1.2 billion budget deficit through June 2011.

Unlike votes in the state House earlier this week to tap the state's rainy-day fund or in the state Senate to use the hurricane-relief fund to reduce furloughs, the budget draft involves general-fund money that would be taken away from other state programs.

While the budget draft would add money to trim furloughs, it would subtract $18 million from the state Department of Education's weighted student formula, which could increase average class size at schools by at least one student. The draft would also strip $7 million from instructional support, reduce staff positions from department administration, and slash service contracts with private vendors.

Overall, the draft would provide the department with $40.7 million less than what Gov. Linda Lingle proposed in her budget request in December.

The budget draft would also cut $10 million at the University of Hawai'i.

"Based on our limited resources, this is a budget that tries to do the right thing for the people of Hawai'i," said state Rep. Marcus Oshiro, D-39th (Wahiawā), the chairman of the House Finance Committee.

"It's an honest budget. It doesn't mask the harsh realities, the hard choices. It doesn't sugarcoat the problem."

PRIORITIES LIST

The proposed cut to the Department of Education's weighted student formula — which divides school spending based on individual student need — could undermine the department's efforts to preserve lower class size and enhance student learning.

State Rep. Roy Takumi, D-36th (Pearl City, Momilani, Pacific Palisades), the chairman of the House Education Committee, said he would try to protect department spending as the budget moves forward.

But he said department administrators and the state Board of Education must come up with a list of priorities or else lawmakers will make the cuts on their own.

"To me, my plea to the board will be prioritize, prioritize , prioritize," Takumi said, suggesting that educators look to cut non-core functions. "Otherwise, we're going to do it."

Takumi said the money for furloughs is intended to show the community that lawmakers are behind a solution, even though Lingle, the department, the school board and the teachers union hold the power to reduce furloughs through collective bargaining.

"There has to be an agreement because, otherwise, the governor could just refuse to release the dollars, and (we're ) back to square one anyway," he said. "But if anybody had any doubt whether or not the Legislature was willing to find money to reduce furloughs, they should be comforted in knowing that we did try."

Garrett Toguchi, the chairman of the school board, said any additional cuts to education would be "cutting into the bone" after previous budget reductions. "It's obviously disappointing that the Legislature has to resort to cutting education," he said.

Oshiro, expecting complaints about the $10 million cut to the university, noted that the new contract with the faculty union contains temporary pay cuts that will eventually be restored and pay raises in future years. Other state workers who agreed to pay cuts to help close the deficit received no similar promises. He also said the university has the option to raise tuition fees to generate new revenue.

The $10 million cut is about 3 percent of the university's general-fund budget. The university would get $858 million in total state spending under the draft, $357 million from the general fund.

"We're optimistic that as the process moves along, our state legislators will recognize the importance of the university to the state's overall economy and the need to proactively invest in the state's sole public higher education system," UH President M.R.C. Greenwood said in a statement. "Not only do we bring in hundreds of millions of dollars in research and training revenue, we also contribute educational capital. A strong and vibrant higher education system is vital to our state's economic future, particularly in this competitive global economy."

PROTECTING JOBS

In total, the budget draft contains $10 billion in state spending for the fiscal year that starts in July and ends in June 2011, $41.2 million lower than what Lingle requested.

The general-fund portion of the budget, over which the governor and lawmakers have the most control, is $4.8 billion, $60.7 million less than the governor's request.

In a statement of their priorities, lawmakers would restore about 1,000 state positions that Lingle wanted to eliminate, including jobs in plant quarantine inspection, child and adult protective services, welfare eligibility, and security at Hawai'i State Hospital.

Even if the budget draft passes, however, Lingle or the next governor would have discretion over whether to release the money for the positions.

The draft would also restore $3 million in spending for state libraries, which have had to cut back library hours because of staff restrictions.

Lawmakers, however, would cut $3.9 million in child care subsidies, with $1.9 million coming from general-fund money.

State House Minority Leader Lynn Finnegan, R-32nd (Lower Pearlridge, 'Āiea, Hālawa), said she would have preferred additional state program cuts but described the committee's draft as "a pretty bold move" to contain the budget shortfall.

The draft now moves to the full House for a vote before crossing to the Senate, where the Senate Ways and Means Committee will complete a draft. House and Senate negotiators will meet in conference committee on the final bill before the session adjourns in late April.

The House Finance Committee, meanwhile, agreed to add $1.5 million for specialty courts, such as drug courts, in the Judiciary budget. Lawmakers were convinced by testimony from judges and social-service providers that the specialty courts, which guide offenders toward treatment and probation, are more cost-effective than incarceration.