In one of their earlier finishes in recent years (i.e., not going till midnight), House and Senate conferees completed work on their bills just before 10 p.m. tonight.

One of the measures being watched statewide was Senate Bill 1186, which would — among other things — cap the amount of hotel room tax revenue going to the counties and the Hawaii Tourism Authority.

House members had proposed a cap of $101 million, roughly 45 percent of the total taken in by the transient accommodations tax. Senate members late Thursday night floated a proposal to cap the amount at $85 million.

The compromise was announced at 9:40 p.m.: $93 million.

Among those prowling the Capitol hallways late last night was City Council Chairman Nestor Garcia (a former state rep who has seen the House-Senate brinksmanship in the final days of the session first-hand).

He estimated the loss to city at between $6 million and $7 million. Said Garcia:

“Now each of the counties has to go back and reassess, relative to their own budgets. But I tell you what, it could’ve been worse. So I’m happy to say we, sort of, dodged a bullet on that one.

“We’ve been diligent in our review of the budget. We’ve been prudent, we’ve been taking the knife. I;d like to think it won’t be as much of an impact as it might have been if we went more to the Senate version.”

City Managing Director Doug Chin, who also was among those in the crowded conference room, said the Carlisle administration was disappointed. Said Chin:

“We think there’s going to be some serious challenges to our budget because of rising energy costs as well as issues related to labor negotiations. I think this is one more tough pill that we’re going to have to swallow.

“There’s going to be a lot of tough challenges for the city as far as what. It’s going to difficult to balance this budget but we want to do what we can to keep working with the Council on trying to make it work for the city.”

The City Council has kept alive various tax hikes and fee increases — as well as steep departmental cuts — in anticipation of some loss of revenue from the state.

The state Supreme Court today named retired Judge Victoria Marks to lead the state’s reapportionment commission, which will redraw the state’s political boundaries based on the results of the census.

The court made the choice after the eight partisan members of the commission were unable to agree on a ninth member as leader.

The court, in a bow to transparency, also released the names of the people who applied:

Hanalei Aipoalani

Riki May Amano

Lance Collins

Michael Fergus

Rockne Freitas

Gregory Garneau

William Georgi

Timothy Johns

Robert Klein

Lynne Matusow

Abbey Mayer

Lawrence Meacham

Thomas Mitrano

Nikhilananda

William Petti

Rai Saint Chu

Donn Takaki

Defer was the order of the day as lawmakers appear ready to go right up until tomorrow’s midnight procedural deadline to complete work on all legislation.

House and Senate conferees struck a deal on the two-year operating budget around 5:30 p.m. tonight, but still being worked on were the dozens of ancillary bills that fit into the spending plan.

Among some of the key measures being taken up tomorrow:

Senate Bill 651: Relating to mortgage foreclosures. The bill establishes a temporary mortgage foreclosure dispute resolution program. Conferees said they appeared to have agreement on most of the details, but wanted to give it a final review. Conferees indefinitely deferred (essentially killing) a separate measure, House Bill 879, which authorizes planned community or condominium associations to pursue nonjudicial foreclosure for outstanding liens. The bill also  authorizes payment plans for outstanding liens under certain conditions and allows an association to acquire a unit through credit bidding at auction.

SB318 and HB1308: Proposals granting tax credits to companies that invest in digital media and the motion picture industry in Hawaii.

SB1358: A measure requiring the Department of Public Safety to develop a plan for reopening the Kulani correctional facility, implement transfers and house newly sentenced individuals. The report would be due to the 2012 Legislature.

SB1363: A proposal that would require businesses to charge a fee for every single-use plastic checkout bag issued to a customer. Conferees have disagreed over the amount of the fee, with the House standing firm at 10 cents per bag. Senators had sought to go as high as 25 cents, but today said they could agree to the House’s 10-cent fee. The latest proposal from the Senate would not pre-empt county ordinances that already prohibit or restrict single-use plastic bags.

One measure that appears headed for defeat is SB1458, establishing a medical marijuana pilot project in a county to be determined.

The latest version of the bill would establish a two-year pilot project and prescriptions would be limited to patients suffering from multiple sclerosis, cancer, HIV, AIDS and/or glaucoma. It would establish a “compassion center” for distribution on an island where the Department of Health determines there is the greatest need, based on the number of prescriptions.

House members have pressed their Senate counterparts on having the legislation specify where the distribution center would be located, and also have voiced concerns over which agency — Department of Health or Public Safety — would administer the program.

The two sides seemed far apart at today’s conference committee meeting but agreed to return to the table tomorrow.

Final drafts of all bills must be agreed upon by midnight. Final votes would be held Tuesday and Thursday.

For the complete conference committee schedule, go to the State Capitol Website.

State House and Senate negotiators reached an agreement tonight on the final draft of the two-year state budget, but put off decisions on the revenue-generating bills to balance the budget and close a $1.3 billion deficit until tomorrow.

The budget draft, which now goes to the full House and Senate for final votes, involves $11 billion in state spending in fiscal year 2012 and $10.9 billion in spending for fiscal year 2013. The general-fund portion of the budget, over which lawmakers have the most control, is $5.4 billion in fiscal year 2012 and $5.5 billion in fiscal year 2013.

The budget draft would increase state spending over this fiscal year but is less than Gov. Neil Abercrombie’s budget request.

The increase in spending is mostly due to higher Medicaid, public-worker health care and debt service costs.

Lawmakers set aside $88 million a year in labor savings based on the new contract reached between Abercrombie and most units of the Hawaii Government Employees Association, which calls for a 5 percent pay cut, the equivalent of one furlough day a month for state workers. Lawmakers presume that the governor will reach similar deals with the Hawaii State Teachers Association and the United Public Workers.

Lawmakers, however, chose not to use state general funds to finance scheduled pay raises for the University of Hawaii Professional Assembly as part of the faculty union’s six-year contract reached two years ago. Instead, lawmakers directed the University of Hawaii to cover the faculty raises from special funds.

Lawmakers also made about $120 million a year in state programs cuts, but gave the Abercrombie administration the discretion over how to make about up about half of the amount through the governor’s restructuring efforts.

The big-ticket revenue-generating bills on the table tomorrow to close the deficit would suspend general excise tax exemptions on targeted business activities, divert money from a rental car surcharge to the general fund, cap itemized deductions on higher-income taxpayers, repeal a state tax deduction on higher-income taxpayers, and impose a pension tax on higher-income retirees.

State Sen. David Ige, the lead Senate budget negotiator, said today that the Senate would not agree to a pension tax, preferring instead to expand the repeal of the state tax deduction to cover more taxpayers.

State Rep. Marcus Oshiro, the lead House budget negotiator, said the House was not ready to give up the pension tax as an option and argued that it fits within the House’s philosophy of directing tax increases on higher-income taxpayers.

House and Senate conferees also reached agreement tonight on a capital improvement projects budget of $1.8 billion in fiscal year 2012 and $1 billion in fiscal year 2013, including improvements to schools and public housing.

Only $1,299,999,820.90 to go!

According to a post on Gov. Neil Abercrombie’s website, a Big Island woman who recently served jury duty returned her check to the state, saying the government needed the money more than she did.

State Sen. David Ige, the lead Senate negotiator on the budget, said tonight that the conference committee hopes to vote at 9 a.m. Thursday on a final two-year spending blueprint.

Lawmakers and staff will continue negotiations privately tonight.

If lawmakers do close the budget early Thursday, it would provide greater clarity on how much money is necessary from the separate revenue-generating bills to balance the budget and erase the state’s projected $1.3 billion deficit. Lawmakers have until a procedural deadline of midnight Friday to finish work on bills for final votes next week before session adjourns.

State Rep. Marcus Oshiro, the lead House negotiator, said lawmakers are operating under the presumption that state tax collections will decline this fiscal year by at least 2 percent, lower than the 1.6 percent projected by the state Council on Revenues.

Using a more pessimistic forecast, he said, could leave a cushion in the event the council lowers the forecast when it meets again in late May. It may also help give Gov. Neil Abercrombie some flexibility in implementing the budget.

“We’re trying to create some space in the budget,” Oshiro said.

Others, speaking privately, worry that lawmakers will not approve enough revenue-generating bills — or the bills will fall short of revenue projections — leaving the Abercrombie administration to fill the hole.

The big-ticket bills on the table would suspend general excise tax exemptions on targeted business activities, divert money from a rental car surcharge to the general fund, cap itemized deductions on higher-income taxpayers, repeal a state tax deduction on higher-income taxpayers, and impose a pension tax on higher-income retirees.

“It ain’t over, till it’s over.”

Although something tells us this thing still won’t be over.

Today, President Barack Obama released his “long form” birth certificate to the media, saying he thought the controversy — real or imagined — about his place of birth was becoming a distraction from more pressing topics, specifically the national budget.

You can see the document — and the correspondence with the state Department of Health that it took to release the information — at the White House blog.

Here is a transcript of the president’s remarks to reporters:

THE WHITE HOUSE

Office of the Press Secretary

_______________________________________________________________________

For Immediate Release April 27, 2011

REMARKS BY THE PRESIDENT

James S. Brady Press Briefing Room

9:48 A.M. EDT

THE PRESIDENT: Hello, everybody. Now, let me just comment, first of all, on the fact that I can’t get the networks to break in on all kinds of other discussions — (laughter.) I was just back there listening to Chuck — he was saying, it’s amazing that he’s not going to be talking about national security. I would not have the networks breaking in if I was talking about that, Chuck, and you know it.

Q Wrong channel. (Laughter.)

THE PRESIDENT: As many of you have been briefed, we provided additional information today about the site of my birth. Now, this issue has been going on for two, two and a half years now. I think it started during the campaign. And I have to say that over the last two and a half years I have watched with bemusement, I’ve been puzzled at the degree to which this thing just kept on going. We’ve had every official in Hawaii, Democrat and Republican, every news outlet that has investigated this, confirm that, yes, in fact, I was born in Hawaii, August 4, 1961, in Kapiolani Hospital.

We’ve posted the certification that is given by the state of Hawaii on the Internet for everybody to see. People have provided affidavits that they, in fact, have seen this birth certificate. And yet this thing just keeps on going.

Now, normally I would not comment on something like this, because obviously there’s a lot of stuff swirling in the press on at any given day and I’ve got other things to do. But two weeks ago, when the Republican House had put forward a budget that will have huge consequences potentially to the country, and when I gave a speech about my budget and how I felt that we needed to invest in education and infrastructure and making sure that we had a strong safety net for our seniors even as we were closing the deficit, during that entire week the dominant news story wasn’t about these huge, monumental choices that we’re going to have to make as a nation. It was about my birth certificate. And that was true on most of the news outlets that were represented here.

And so I just want to make a larger point here. We’ve got some enormous challenges out there. There are a lot of folks out there who are still looking for work. Everybody is still suffering under high gas prices. We’re going to have to make a series of very difficult decisions about how we invest in our future but also get a hold of our deficit and our debt — how do we do that in a balanced way.

And this is going to generate huge and serious debates, important debates. And there are going to be some fierce disagreements — and that’s good. That’s how democracy is supposed to work. And I am confident that the American people and America’s political leaders can come together in a bipartisan way and solve these problems. We always have.

But we’re not going to be able to do it if we are distracted. We’re not going to be able to do it if we spend time vilifying each other. We’re not going to be able to do it if we just make stuff up and pretend that facts are not facts. We’re not going to be able to solve our problems if we get distracted by sideshows and carnival barkers.

We live in a serious time right now and we have the potential to deal with the issues that we confront in a way that will make our kids and our grandkids and our great grandkids proud. And I have every confidence that America in the 21st century is going to be able to come out on top just like we always have. But we’re going to have to get serious to do it.

I know that there’s going to be a segment of people for which, no matter what we put out, this issue will not be put to rest. But I’m speaking to the vast majority of the American people, as well as to the press. We do not have time for this kind of silliness. We’ve got better stuff to do. I’ve got better stuff to do. We’ve got big problems to solve. And I’m confident we can solve them, but we’re going to have to focus on them — not on this.

Thanks very much, everybody.

END 9:54 A.M. EDT

State Health Director Loretta Fuddy also issued a statement regarding the release of the birth certificate:

“We hope that issuing certified copies of the original Certificate of Live Birth to President Obama will end the numerous inquiries related to his birth in Hawaii. I have seen the original records filed at the Department of Health and attest to the authenticity of the certified copies the department provided to the President that further prove the fact that he was born in Hawaii.”

Gov. Neil Abercrombie also issued a statment:

“Considering all of the investigations that have been done and the information that has been provided, no rational person can question the President’s citizenship.  We have found a way – once again – to confirm what we already knew: the President was born here in Hawaii.  State officials of both parties have verified that President Obama’s birth records show that he was born in Honolulu.”

In 2001, the state began computer-generating vital statistics records, according to a news release. Since then, the practice has been to issue only the computer-generated Certifications of Live Birth, and to not produce photocopies of actual records.

Fuddy made an exception for Obama by issuing copies of the original birth certificate.

Said state Attorney General David Louie:

“Director Fuddy exercised her legal authority in a completely appropriate manner in this unique circumstance. We will continue to maintain the strict confidentiality requirements afforded to vital statistics records, such as birth certificates. These requirements help protect the integrity of the records, and keep us all safe from crimes, such as identity theft.”

Gov. Neil Abercrombie has challenged state lawmakers not to use legal guidance from his Attorney General’s office as reason to vote against the governor’s proposals to impose a pension tax or end Medicare Part B reimbursements for public worker retirees.

In a note to lawmakers on Tuesday, the governor describes AG letters that warned of likely legal attacks over a pension tax and Medicare Part B as “common place observations that those bills like virtually any bill passed by the Legislature will be subject to legal challenge whether or not such a challenge is well-founded.”

Abercrombie also claims that the AG never said the bills would result in an attack on grounds that they violate the state or federal constitutions. The governor also claims the AG never raised legal doubts or concerns about the bills.

However, in the March 18 letter from Hugh Jones, supervising deputy attorney general, to state Sen. Clayton Hee, Jones wrote that the pension tax “could be the potential subject of a legal challenge on the grounds that they may violate article XVI, section 2, of the Hawaii Constitution, or may impair the Contracts Clause of the U.S. Constitution.”

In the Feb. 15 letter from Attorney General David Louie to Hee on Medicare Part B, Louie wrote: “We advise that if S.B. No. 1268 is enacted in its present form, it will likely be the subject of a court challenge, with an uncertain outcome.”

Jones and Louie both conclusively advised lawmakers that the state would prevail if it imposed the pension tax and ended Medicare Part B payments prospectively on public workers.

While neither Jones nor Louie advised lawmakers to use their legal guidance as a reason to vote against the bills, many lawmakers took the letters more seriously than the “common place observations” that Abercrombie suggests.

Abercrombie contends that the AG’s central premise can be found in Article VII, Section 1, of the state constitution, which holds that the power of taxation shall never be surrendered, suspended or contracted away. The governor told lawmakers that “none of us can escape the responsibility for voting `yea’ or `nay’ by pointing to the Attorney General or anyone else.”

From the governor’s note:

Referencing third parties may be useful to avoid direct responsibility for decisions, but it is not what we need today. In particular, when that party is the Attorney General, it is essential that his views on legal authority not be selectively appropriated to suit the purpose of the legislative moment.

The Attorney General does not have a political agenda on raising revenue nor does he proffer opinions, views or analysis in support of one. He has never said including pension income for tax purposes or ending reimbursement for Medicare Part B payments will result in an attack on these proposals on the grounds that they “violate” either state or federal constitutions. He has never “raised legal questions or doubts” about either of these bills.

He has made common place observations that those bills like virtually any bill “passed by the Legislature will be subject to legal challenge whether or not such a challenge is well-founded.” He has said that if either or both pass, they will be presumed to be constitutional, and if challenged, defended as such. To suggest that any legislator vote against these bills because the Attorney General said so is a false premise.

AG David Louie – HB1092-1

State House and Senate negotiators held a short public meeting tonight before returning to private talks on a final budget draft, missing their initial timetable for finishing work by tonight.

State Rep. Marcus Oshiro, the lead House negotiator, and state Sen. David Ige, the lead Senate negotiator, indicated that the draft may be completed Wednesday night if lawmakers make sufficient progress on separate revenue-generating bills to balance the budget.

“We can’t do it all in the budget,” Oshiro said of the need for the revenue-generating bills.

Lawmakers, he said, already made substantial budget cuts over the past few years to get through the recession. “Much of the fat has been cut out,” he said. “We’re down to some actual …some meat, and in some instances striking at the bone of government services.”

Oshiro said the general-fund portion of the budget, over which lawmakers have the most control, is about $5.3 billion in fiscal year 2012 and $5.5 billion in fiscal year 2013. Estimates for the overall operating budget were not publicly available.

Oshiro said lawmakers are still in talks over about $25 million to $50 million in state program requests and over how much to set aside for labor savings. Lawmakers are also discussing fixed costs such as health care and retirement for public workers.

Gov. Neil Abercrombie and most units of the Hawaii Government Employees Association have reached agreement on a two-year deal with a 5 percent pay cut, the equivalent of about one furlough day a month. Lawmakers want to know whether to expect similar deals with the Hawaii State Teachers Association and the United Public Workers, or whether the governor might seek more savings from those contracts.

Oshiro said negotiators have reached tentative agreement on some major budget changes involving fixed costs, debt service, the Employer-Union Health Benefits Trust fund, welfare, health care for migrants, and Medicaid. Details were not publicly available.

Lawmakers are working toward a procedural deadline of midnight Friday to have bills ready for final votes before session adjourns next week.

Gov. Neil Abercrombie has withdrawn two of his nominees to the University of Hawaii Board of Regents.

The state Senate Education Committee voted Monday to reject the nominees, making it unlikely that the full Senate would have confirmed the governor’s picks.

The committee voted not to confirm Sandra Scarr, a former psychology professor who serves on several Big Island organizations, and Patrick Naughton, a former provost at Hawaii Community College who has a nonprofit that works with dyslexic students.

Scarr and Naughton were nominated to represent the Big Island on the board. Senators, as is customary, gave Abercrombie the option of withdrawing the nominations before they reached the Senate floor for a final vote.

The committee voted to recommend three other Abercrombie nominees to the board – Saedene Ota, Coralie Matayoshi, and Jan Sullivan – for confirmation.

“It was a tough decision for the committee, obviously, to consider not confirming any individual, especially given that they’re willing to make that commitment and step forward” said state Sen. Jill Tokuda (D, Kaneohe, Kailua), the chairwoman of the Senate Education Committee.

“And they are definitely very involved in the community, they’ve got extensive background in academia, but I think for these two individuals in particular there were some concerns that were raised during the hearing process, reading their responses (to committee questions), in terms of how they would be best be able to serve on the Board of Regents, especially compared to the other candidates who were put forward and confirmed by the committee.”

Tokuda also said she is concerned about the regent selection process, in which an advisory council makes recommendations to the governor. Abercrombie asked for additional names to consider before making his nominations, but he was refused.

Senators are taking a look at the regent selection process now that voters have converted the state Board of Education to an appointed, rather than elected, school board. Lawmakers opted to give the governor the discretion to directly make school board appointments rather than having an advisory council screen and recommend nominees.

“We really have seen the value in a governor being able to look at how an individual appointment’s strengths will add to the whole,” Tokuda said. “When you’ve got a selection committee like the regents do, you are not able to do that.”

Donalyn Dela Cruz, the governor’s spokeswoman, said the governor would ask the regent advisory council for a list of new recommendations.

“This selection process is clearly not working,” she said in an email. “Being that this is the process right now, Gov. Abercrombie will be asking the selection committee for a new list.”

“Now is a crucial time in determining the direction of UH.”

*Note: The version of this story that appears in Tuesday’s newspaper was submitted prior to the disclosure that Abercrombie had withdrawn the nominations.