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Abercrombie: Spending increases for necessities

Audrey Mcavoy, Associated Press

Gov. Neil Abercrombie, left, discusses his budget proposals for the next two fiscal years at a news conference with Budget Director Kalbert Young at the state Capitol in Honolulu on Thursday, Dec. 20, 2012. The governor says spending increases he's proposing address fundamental necessities like early childhood education, state employee pensions and retiree health care. (AP Photo/Audrey McAvoy)

HONOLULU (AP) -- Gov. Neil Abercrombie said Thursday that the spending increases he's proposing for the next two fiscal years address fundamental necessities like early childhood education, state employee pensions and retiree health care.

The governor wants to spend nearly $3 million more on early childhood education in the next fiscal year starting in July and $28 million more the following year.

Children who don't receive education before kindergarten often enter school already behind other students, Abercrombie said.

"It's unfair to them and it's certainly an unfair burden to place on the teaching staff of our schools," he told reporters at a news conference.

Failing to invest in programs like preschool will lead to higher medical expenses, more mental health care and possibly higher unemployment and crime problems, he said.

"To the degree that which we don't provide for that in the early years, we're undermining ourselves socially and economically," the governor said.

Abercrombie was initially scheduled to discuss his budget proposals Monday, the day he submitted them, but he postponed a news conference on the topic when Sen. Daniel Inouye died.

The governor also wants to spend $100 million a year paying into funds for state employee pensions and retiree health care.

As is the case in many other states, a change to accounting rules in 2008 exposed an enormous shortfall in state payments to employee pension funds and health care funds.

Budget Director Kalbert Young said Hawaii owes $8 billion to the state's pension system and more than $14 billion to the health fund for employee and retiree health care.

The state would need to pay $500 million a year for 30 years to pay this off, Young said.

The governor is only proposing to spend 20 percent of that amount. But Abercrombie said it's a "giant step forward" toward addressing a liability that looms large for the state. It also compares favorably with what other states are doing, he said.

"It shows that we are serious about it and it shows how serious the challenge is," the governor said.

Overall, Abercrombie is proposing to spend $6.1 billion in general funds during the next fiscal year and $6.3 billion the following year.