Further budget cuts to the state Department of Human Services could result in layoffs or significant cuts to programs and "sacrifice the safety net" for the neediest, DHS director Lillian Koller told lawmakers yesterday at a hearing on how nonprofits and DHS are faring in the economic crisis.

Service providers also asked lawmakers to consider the consequences of funding cuts, saying they are struggling to keep up with increased needs from families for everything from food to emergency financial assistance.

"This is not a time to cut critical health and human services, but rather an opportunity to invest in the people of Hawai'i," said Debbie Shimizu, executive director of the National Association of Social Workers-Hawai'i chapter. Cuts to programs that help the poor today, she added, "will be multiplied in the future."

The state House Committee on Human Services hearing yesterday morning came as lawmakers are being forced to make difficult choices to shore up a state budget shortfall, and as nonprofits and DHS are already feeling deep state funding cuts to address this year's budget deficit.

DHS saw a 29 percent reduction in its budget this year, to make up for declining state revenues, and has had to cut or reduce the services it contracts out to providers. It also said last week that it plans to cut monthly general assistance payments to the poor and temporarily disabled by half through the end of June because the program is in danger of running out of money.

Koller told lawmakers DHS could certainly make more cuts, but it would be saving money at the expense of the poor.

"Of course you can save money (at DHS)," she said. "The way you're going to do that is sacrifice the safety net. You're going to the neediest people" to cut funding.

State Rep. John Mizuno, D-30th (Kamehameha Heights, Kalihi Valley, Fort Shafter), who is chairman of the committee, told Koller and service providers that "we want to help defend these programs that are facing cuts." But he added that will be difficult, given the enormity of the budget woes the state faces.

A main focus of the hearing was to discuss whether DHS is considering layoffs, and Koller said she had no immediate plans to cut staff. The governor has also urged lawmakers to balance the budget without laying off workers.

But some say that could be unavoidable. On Wednesday, the state House Finance Committee agreed to a budget draft that proposes spending reductions and laying off 374 state workers. Thirty of the proposed layoffs are at DHS, said state Rep. Della Au Belatti, D-25th (Tantalus, Makiki, McCully).

Koller said the federal economic stimulus package does provide a small glimmer of hope, since it includes funding for existing human services programs, such as food stamps. But she said the package is no cure-all.

She also pointed out that though DHS is a massive department, about 89 percent of its spending is required under federal or state mandates. The rest of the funding is discretionary, but that portion pays for the salaries of all DHS employees.