In a first pass at resolving teacher furloughs, the Legislature yesterday moved ahead on bills that would divert money from the Hawai'i Hurricane Relief Fund but delayed action on a proposal to increase taxes or take money from the rainy day fund.

Hawai'i public schools have closed on nine Fridays this school year because of furloughs and are scheduled to be closed on eight more Fridays, including this week and next. The furloughs began on Oct. 23 as a way to help balance the state budget.

Several key committees yesterday advanced two furlough related bills:

• Senate Bill 2124, which takes out $36 million from the hurricane fund to help restore seven to eight furlough days this year.

•  Senate Bill 2436, which would assign $75 million that would restore class days this year and next year.

The proposals now go to the Senate Ways and Means Committee.

Senate committees deferred Senate Bill 2437, which calls for raising the general excise tax to 5.712 percent from 4.712 percent on O'ahu and to 5.166 percent from 4.166 percent on Neighbor Islands to pay for ending teacher furlough days.

The tax bill was deferred a week so Senate leaders can discuss ways to partially offset the burden of a higher tax by creating a tax credit for the purchase of food or increasing the state's standard income tax deduction, said Senate Education Chairman Norman Sakamoto, D-15th (Waimalu, Airport, Salt Lake).

Business organizations submitted testimony against increasing the excise tax.

The bills that moved forward originally included provisions that would have also tapped the state's rainy day fund, but that provision was dropped from all of the measures yesterday. Concerns were raised by senators and colleagues alike who believe that rainy day money should be used for human services and other purposes, Sakamoto said.

The idea of tapping the hurricane fund was endorsed by acting School Superintendent Kathryn Matayoshi and the Hawaii State Teachers Association.

The Lingle administration did not provide a clear position on using hurricane fund money. In December, Lingle proposed using up to $50 million of the rainy day fund to restore 24 furlough days, provided teachers give up some of their training and planning days.

HURRICANE FUND

There is about $189 million in the hurricane fund. The state Department of Education has said it costs about $5 million a day to operate the state's school system.

J.P. Schmidt, the state's insurance commissioner, said he is concerned about tapping the hurricane fund, which would be critical to helping provide property insurance in Hawai'i after another severe hurricane.

"The more money (the hurricane relief fund) has, the faster it can redeploy," Schmidt said in written testimony. "Without significant reserves, (the fund) will be much slower in redeploying and this will have negative financial and economic consequence for the people of Hawai'i."

SYSTEM OVERHAUL

Even if the hurricane fund bills pass, it will ultimately be up to Gov. Linda Lingle to release the money and transfer it to the Department of Education.

The House Education Committee yesterday deferred votes on several bills that would overhaul the public school system by abolishing the elected Board of Education and allow the governor to select a school superintendent, similar to how other state department heads are chosen. The proposal was pushed by Lingle at her State of the State address last week.

Those bills will be taken up again tomorrow.