The following hearing notices, which are subject to change, were sorted and taken from the Hawaii State Capitol Web site. Please check that site for updates and/or changes to the schedule at https://www.capitol.hawaii.gov/site1/docs/hearing/hearing2.asp?press1=docs&button1=current Go there and click on the Hearing Date to view the Hearing Notice. Hearings notices for both House and Senate measures in all committees: Hearing ‘Date Time Bill Number Measure Title Committee’ 1/22/03 1:30 PM None Informational Briefing FIN 1/22/03 1:30 PM None Informational Briefing Summary FIN 1/22/03 1:30 PM None Informational Briefing Summary WAM 1/22/03 1:30 PM None Informational Briefing WAM/TMG 1/22/03 3:30 PM None Informational Briefing FIN 1/23/03 8:30 AM None Informational Briefing WAM 1/23/03 8:30 AM None Informational Briefing Summary WAM 1/23/03 9:00 AM None Informational Briefing AGR 1/23/03 9:00 AM None Informational Briefing JHW PSM 1/23/03 1:00 PM None Informational Briefing FIN 1/23/03 1:00 PM None Informational Briefing Summary FIN 1/23/03 1:15 PM None Informational Briefing TSM 1/23/03 2:00 PM None Informational Briefing JHW 1/23/03 2:00 PM None Informational Briefing JUD 1/23/03 4:00 PM None Informational Briefing ECD/SAT 1/24/03 8:30 AM None Informational Briefing HLT 1/24/03 8:30 AM None Informational Briefing WAM 1/24/03 8:30 AM None Informational Briefing WAM 1/24/03 8:30 AM None Informational Briefing Summary WAM 1/24/03 10:30 AM None Informational Briefing WLH 1/24/03 1:00 PM HB14 RELATING TO TELEPHONE SOLICITATIONS. CPC 1/24/03 1:00 PM HB17 RELATING TO PAGER AND CELLULAR PHONE SPAM. CPC 1/24/03 1:00 PM HB22 RELATING TO CONSUMER CREDIT REPORTING. CPC 1/24/03 1:00 PM HB43 RELATING TO INSURANCE FRAUD. CPC 1/24/03 1:00 PM HB75 RELATING TO CONDOMINIUMS. CPC 1/24/03 1:00 PM HB93 RELATING TO THE CONTINUING EDUCATION OF DESIGN PROFESSIONALS. CPC 1/24/03 1:00 PM HB96 RELATING TO PUBLIC UTILITIES. CPC 1/24/03 1:00 PM HB139 RELATING TO THE MOTOR VEHICLE RENTAL INDUSTRY. CPC 1/24/03 1:00 PM HB140 RELATING TO THE MOTOR VEHICLE RENTAL INDUSTRY. CPC 1/24/03 1:00 PM None Informational Briefing FIN 1/24/03 1:00 PM None Informational Briefing FIN 1/24/03 1:00 PM None Informational Briefing FIN 1/24/03 1:00 PM None Informational Briefing Summary FIN 1/27/03 8:30 AM None Informational Briefing Summary WAM 1/27/03 8:30 AM None Informational Briefing WAM/EDU 1/27/03 1:00 PM None Informational Briefing FIN 1/27/03 1:00 PM None Informational Briefing Summary FIN 1/28/03 8:30 AM None Informational Briefing WAM 1/28/03 8:30 AM None Informational Briefing Summary WAM 1/28/03 1:00 PM None Informational Briefing FIN 1/28/03 1:00 PM None Informational Briefing Summary FIN 1/28/03 1:15 PM None Informational Briefing TSM 1/29/03 8:30 AM None Informational Briefing WAM 1/29/03 8:30 AM None Informational Briefing Summary WAM 1/30/03 8:30 AM None Informational Briefing WAM 1/30/03 8:30 AM None Informational Briefing WAM 1/30/03 8:30 AM None Informational Briefing Summary WAM 2/21/03 1:00 PM None Informational Briefing TMG
State of the State – Jan. 21, 2003-An Outline of the Governor's Agenda
“Linda Lingle Image”
Mr. President, Mr. Speaker, Members of the Legislature, Lt. Governor Aiona, Senator Inouye, Congressman Abercrombie, Congressman and Mrs. Case, Mayor and Mrs. Harris, Mayor Kim, and Mayor Arakawa, Governor Ariyoshi, Governor and Mrs. Waihee, Members of the Consular Corps, Distinguished guests, And to all the people of Hawaii,
Aloha.
As I stand before all of you assembled here today, as well as those watching on television and the Internet, and listening on the radio, it is hard to believe that this is only my 50th day in office. The time has passed quickly … but much has been done, including the selection of my cabinet.
Before introducing our new directors, I want to thank the 150 volunteers who served on our 13 search committees. These citizens studied thick stacks of resumes, conducted many extensive interviews, and narrowed each search to a short list of candidates.
As a result of their efforts, I have been able to assemble a cabinet filled with people of integrity, ability, accomplishment and vision. Please hold your applause as I name my new directors and their respective positions.
*Georgina Kawamura, Director, Dept. of Budget & Finance
*Mark Bennett, Attorney General
*Russ Saito, Comptroller, Dept. of Accounting & Gen. Services
*Sandra Kunimoto, Chair, Board of Agriculture
*Ted Liu, Director, Dept. of Business, Economic Dev. & Tourism
*Mark Recktenwald, Dir., Dept. of Commerce & Consumer Affairs
*General Bob Lee, Adjutant General, Dept. of Defense
*Micah Kane, Chairman, Hawaiian Homes Commission
*Dr. Chiyome Fukino, Director, Dept. of Health
*Kathy Watanabe, Director, Dept. of Human Resources Development
*Lillian Kohler, Director, Dept. of Human Services
*Nelson Befitel, Director, Dept. of Labor & Industrial Relations
*Peter Young, Chairman, Board of Land & Natural Resources
*Rod Haraga, Director, Dept. of Transportation
*And also interim Director Jim Propotnick, Dept. of Public Safety
*and Deputy Director of Taxation, Kurt Kawafuchi
Ladies and Gentlemen, I present to you the most talented group of individuals I have ever had the pleasure to lead.
It has been the tradition for legislators and others to applaud from time to time during the Governor’s State of the State Address as you so graciously just did. My request this morning, however, is that you hold such applause to a minimum. Otherwise we might end up still being here live at 6:30 tonight after all.
I am honored and very humbled to come before you today for this, my first State-of-the-State Address as Governor of our Great State of Hawaii.
Mr. President, Mr. Speaker, I want to thank both of you for your promises of openness and cooperation last week during opening day ceremonies. Please know that I pledge the same to you.
We agree that the people of Hawaii have spoken loudly and clearly. They have stated in no uncertain terms that the status quo is no longer acceptable. They want a new beginning and that is exactly what we must give them.
The people of Hawaii want better schools, with real alternatives for children who have not been able to thrive in a one-size-fits-all statewide system. They want a system that puts the interests of the children above those of anyone else, including union leaders and politicians. They want schools that prepare their children for a better life.
The people of Hawaii also want a government they can trust to deal with people openly, honestly and fairly.
They want an honest budget built on a solid foundation of fiscal discipline, a budget that is understandable and that reflects their priorities. And they want all of us to be held accountable for what we deliver or what we fail to deliver.
Good schools, good jobs, good government. These are not unreasonable demands. But sadly, some of our people have already lost heart and have left Hawaii to look for these things elsewhere.
We cannot allow this to continue. The people of Hawaii want a new beginning that starts now and includes them, their children, and their children’s children. So let us begin.
First, let me state the obvious — our journey will be neither short nor easy.
Let’s talk about the numbers. As you know, the prior administration submitted a financial plan that used the Hurricane Relief Fund to balance the budget in the upcoming biennium. This is something we must not do.
Without exception, experts tell us, the question isn’t whether there will be another Iniki, but when. They also say it isn’t a question of whether our most populated areas will be hit, but when.
We know from experience that insurance companies cannot be depended upon to write new policies in the aftermath. Too much is at stake for us not to be ready to enter the reinsurance market when the next hurricane hits and to care for our people during the massive recovery that will surely follow. That is why I will not raid this fund under any circumstances.
So right off the bat there is a shortfall of $175 million in the budget, as originally submitted.
And now we know that the unfunded liability in the state retirement system exceeds three billion dollars. The state does not have to contribute this entire amount immediately, but it will eventually. Besides the obvious legal obligation, it would be morally wrong to push this debt onto the shoulders of the next generation.
You can see that the road to restoring fiscal discipline and integrity will be long, and occasionally bumpy.
Even so, we must begin this journey now. Accordingly, my legislative package does not propose a host of new, expensive programs, across-the-board pay raises for state workers, or substantial tax cuts.
I would like to do all three of these things, but that would be fiscally irresponsible under the present circumstances.
Major new initiatives and substantial tax cuts must wait until fiscal discipline has been restored to state government and the economy has improved.
Instead, I am proposing modest but significant, common-sense proposals that include changes to our tax system that will help those earning the least; tax credits to stimulate the economy in an area of chronically high unemployment; fairness in our financial relationship with the counties; help for families dealing with the high cost of long term care; and continued support for alternative energy use.
In addition, I will offer proposals that encourage greater competition in the marketplace in order to improve the business climate and create new jobs.
I plan to reinvigorate the public’s willingness to help, and I will motivate our state workers to perform at a higher level where their ideas and contributions are given proper recognition.
We must put our house back in order … step by careful step … working together to create long term, fundamental, structural change. This will not just get us through the tough times, but also allow us to prosper when the times are better.
By working together we can recreate state government so that it is more trusted and efficient. We can revitalize our economy so Hawaii’s families can stay together and provide a good life for the generation that comes next.
Together we also can fulfill our obligation to provide a good, solid education to every child in every community across this state.
I cannot do this alone … and neither can you. We need each other, and we need each other to put aside any notion of partisanship.
Let’s face it, one party rule, whether it was Republicans 40 years ago or Democrats in recent times, has not served the people well.
Hawaii is an island state, thousands of miles from anywhere. And this fact should affect the way we do things.
It’s as if we are in a boat, caught in treacherous waters, needing to set sail for a better place. If I were to chart a course north, but you insisted on going south, then we would go nowhere. We would stay stuck exactly where we started.
Like it or not, we are in this together, and the rest of the state is watching. The people expect us to settle on a course and then work together to get there.
From this day forward, let us agree that the principle by which we will judge proposals for new policies, programs and laws will be whether or not they serve the best interests of all the people of Hawaii.
It is by this standard that I am honored to present now my vision and concrete proposals for Hawaii’s future.
Before a community can prosper, the people must believe in their leaders. They must know that at the core of every decision is careful planning, hard work, and unbending integrity rather than partisanship or self-gain. They must trust that the awesome power of government is not being abused.
To begin the process of earning back the people’s confidence in public servants, I will be asking you to send a loud and clear message that any public official who abuses the public’s trust can expect harsh and certain consequences, including a mandatory prison sentence.
And those who seek to influence public officials will be well advised to limit their efforts to persuasive argument. Large gifts to public officials, including exclusive golf outings and lavish entertainment, will be presumed attempts to bribe and treated as such.
Whether such gratuities actually influence decisions is not the issue. Public trust is at stake and we must do whatever it takes to earn back that trust.
I also will be taking steps to get politics out of government. Among other things, this means that no state worker should ever be required or pressured to attend a political fundraiser or to hold a sign on the side of the road.
Any state worker who ever feels pressured to engage in any kind of political activity should report it to my office immediately. In my administration there will be zero tolerance for any such behavior.
It is critically important that government conduct elections and tally results in a nonpartisan, nonpolitical way so that the people can trust the announced outcome. I find it almost unbelievable that Hawaii law requires all precinct chairs to be members of the same political party as the governor. It has been this way for many years. And although my Party and I would benefit if the law remains the same, it is wrong, and must be changed to allow all citizens, regardless of party, to participate at all levels of the election process.
I am also calling for mandatory posting of election results at each precinct, and mandatory recounts in especially close elections.
The public also is rightly concerned about the large amounts of money contributed to political campaigns by businesses that then get millions of dollars in non-bid contracts. Accordingly, I ask that you enact a law prohibiting political contributions by anyone benefiting from non-bid contracts.
This effectively will prevent many businesses from financially supporting the candidates of their choice, and that’s unfortunate. But the people have made clear their desire for this kind of campaign finance reform.
Trust and integrity in government will be restored only when people know that their government is honest and fair. For them to make this judgment, government also must be open.
I have already initiated a number of changes intended to make government more transparent. As I mentioned earlier, almost all of my directors were selected from short lists provided by volunteer selection committees.
In putting together the committees I did not ask anyone about their own politics and I specifically instructed the committees not to ask any candidate what party they belonged to, if any, or how they voted in the last election. Each committee was instructed simply to provide a short list of the very best candidates in this state.
The majority of people now serving in my cabinet are people that I met for the first time during their interview for the position.
I believe with my whole heart that this is the way government has to operate if we are to regain the people’s trust. The old days of “who you know” being more important than “what you know” are pau.
I am proposing an omnibus procurement bill that will bring much needed transparency into government contracting. The process will be honest, fair and totally merit-based. This bill is the result of recommendations made by a volunteer committee composed of government, industry and academic experts in the procurement field.
The bill also includes a novel form of electronic bidding that we call a reverse version of ebay. Companies wanting a particular contract will be able to bid the job via their computer terminal. The qualifying company with the lowest bid gets the work.
The state employee who proposed this concept, Aaron Fujioka, has shared other ideas that we think have a lot of potential. My directors and I will work hard to establish the kind of trust and respect for state employees that will motivate and reward them for continuing to find ways to save money and improve services.
Also in the spirit of making government more open, I have instructed my budget director to conduct a comprehensive audit of the state’s finances, and then to produce an understandable report that will explain where state revenues come from and how they are being spent. In the future, the report will include evaluations of each department.
And finally, restoring trust in government means keeping government’s promises and commitments to Native Hawaiians.
Next month my senior staff and various members of the Hawaiian community will accompany me to Washington D.C. where I will meet with members of the Bush Administration and testify before Congress on the reasons why federal recognition of Native Hawaiians is so critically important to all the people of Hawaii.
Here at home in Hawaii I will continue to work with you and with the Hawaiian community to resolve the ceded lands issue once and for all.
Our joint decision to make the $10.3 million payment is a good first step, but that is all it is. Like so many other issues we currently face, the ceded lands issue is one that did not occur overnight, and will not be resolved overnight. It is as complicated as it is emotionally charged. But until we get it resolved, our community can never really come together as one.
And make no mistake, my vision is that of one Hawaii.
While working hard for a just resolution, we must make absolutely sure that we do not inadvertently drive a wedge between Hawaiian and non-Hawaiian communities.
”Improve Public Education”
Let’s turn our attention now to public education.
The public knows and we should not be afraid to say it — Hawaii’s public school system is broken. The people closest to the situation, the teachers and administrators themselves, reportedly send their own children to private schools at a rate dramatically higher than that of the general public. I suspect that the same could be said of business leaders and politicians.
There is nothing wrong with a parent’s decision to send his or her children to the school where they are most likely to thrive. What is wrong is that not every parent has this option.
As currently structured, the public school system offers virtually no choice to parents. It’s a one-size-fits-all structure than has long outlived its value.
It is like no other system in America, and it’s not working.
When it comes to public education, the old way of thinking was that decisions were best made by a small group of well-intentioned people in an office building in downtown Honolulu. Current thinking is that as many decisions as possible should be made by people directly affected by those decisions.
In theory, Hawaii’s public school system has embraced the new thinking. SCBM — school Community-Based Management — it has been touted as a means by which parents, teachers and administrators can chart the destiny of their own schools. Unfortunately, it simply has not worked out that way. Let me give you just one example.
Lahainaluna High School wants to change by exactly one week the date of this year’s graduation exercises. This manini change is supported by students, parents, teachers, administrators, and the school’s SCBM Council. They all want it.
But believe it or not, they have no control over the matter. The decision to change the date of any one school’s commencement can be made only by DOE administrators in Honolulu.
When this same issue came up several years ago the DOE denied the same school’s request for the date change. That began a massive letter-writing campaign to the Board of Education and eventually the Board reversed the DOE decision.
Despite all the talk about SCBM, the concept of local community control continues to be foreign in Hawaii.
The time has come to move resources AND decision-making away from the DOE’s central office in Honolulu and to empower local communities to think and act in their own best interest.
I believe this can best be done by replacing our current statewide system with seven, locally elected school boards.
NO other state, other than Hawaii, has a statewide school system. NONE. Not even one. The reason they don’t is because it doesn’t work.
Once local school districts are established, fair and equal funding would continue to be determined on a statewide basis, and certain basic standards would continue to be set and monitored by both the state and federal government. But the hiring and evaluating of principals would be done at the local level as would decisions such as when to hold a graduation ceremony.
I am convinced that the people of Hawaii want local school boards that are accountable to their own communities.
That’s why today I am proposing that we let the people decide this important issue via a statewide ballot referendum. Let’s ask the people of Hawaii if they want to amend the constitution to allow local school boards.
The key to reforming public education in Hawaii is to give parents meaningful choices so they can find the right spot for their own child.
Many children simply do not fit in our present one-size-fits-all system. And miserable themselves, they often become disruptive. Currently there is no real alternative for these children within the DOE.
I am determined to increase dramatically the number of choices available within the DOE.
We can do this by encouraging and supporting schools within a school, magnet schools, e-schooling and home schooling as meaningful choices.
For example, if parents decide that home schooling is best for their child, that child should not be prevented from taking advantage of extracurricular activities available to other public school students.
The current practice of denying home-schooled kids an opportunity to participate in sports or band, is mindless and it unfairly punishes the child. This is wrong and it must stop now.
The best way to provide meaningful choice within the DOE is allowing more charter schools, and then nurturing them. The current DOE attitude toward charter schools is benign neglect at best and antagonistic at worst.
The federal Dept. of Education’s top charter school expert has described our current charter school system in Hawaii as having been designed to fail, functioning now only because of the passion of its proponents.
With his help, and that of local educational experts, I am proposing changes that will redesign charter schools for success.
First, the funding must change. Right now, the funding assumes that the value of services provided to the charter schools by the DOE is nearly as much as all the money going into salaries of the teachers and principal, rent and other costs of operation. This is absurd.
My proposal is to give the charter schools the full cost of educating a child and then let the principal of each charter school decide if what the DOE has to offer is worth paying for.
Fair funding is just the beginning. Under my plan, charter schools would be free to make their own hiring decisions. The UPW would not have a lock on any jobs, nor would the HGEA or the HSTA. Once hired, teachers, secretaries and janitors would be free to form or join a union, but that would be their choice. Unlike the present arrangement, they would not be forced to belong and pay dues to any particular union.
The role of a principal at any school — private, charter or traditional public school, is different from that of teachers and other school workers. Just about every study of individual-school effectiveness has stressed the critical role played by the school principal.
Hawaii is the only state in America in which principals belong to a union.
Principals are a part of management. They have no place in a union. Sure, union leaders and many existing principals like it, but it has proven to be disastrous for the children.
Ladies and gentlemen, if you do only three things to improve public schools during this legislative session, you should allow the people of Hawaii to decide if they want local school boards, get principals out of the union and fairly fund the charter schools.
I am also proposing new initiatives to empower teachers and principals to remove disruptive students from the classroom. Again, with so much at stake we cannot continue to allow a relative few to deny a good learning environment to the many.
Too often, teachers have been given every incentive not to crack down on disruptive students. Those few teachers who take action often regret it because they receive no support. That must change.
These kinds of changes will provide real accountability. Teachers will be free to teach, principals to manage and local school boards to lead. Parents, teachers and taxpayers will know who to hold accountable, and for what.
Until last week, I had not considered the issue of drug testing in our schools. But when Senator Bunda suggested that it might be time to consider drug testing as a constructive tool to help students and their families, it struck a chord with me and with Lt. Governor Aiona.
I have asked the lieutenant governor to convene a gathering of all interested parties to outline a plan to implement a voluntary drug testing program in our schools that will lead to providing help to those students involved with drugs.
If a student voluntarily tests positive for drugs, he or she will not be arrested, expelled or even suspended. Nothing will be publicized. Instead, that student and their parents will be required to meet with a professional counselor and others who know and care about that student, and to plot out a strategy to effectively address the problem.
Sure there are lots of issues to resolve with such a program, but the lives of our children are at stake, as well as the safety of our communities. Lt. Gov. Aiona is a former family court judge who is used to working with others to resolve difficult issues, and I have complete confidence that he will see this idea through.
I want to thank Senator Bunda for this idea and invite him both to help in this effort and rightfully claim credit for the good that will surely come of it.
One final issue involving young people that I’d like to talk about is the age of consent. Prior to 2001, the age of consent in Hawaii was 14 years old — the lowest in the nation. You did the right thing by raising the age of consent to 16, but you included a sunset provision. I call upon you to finish your work and to make the current age of consent permanent.
”Expand the Economy”
My friends, we know that we must expand and diversify our economy. We must do so in order for businesses to succeed and create new jobs. We must expand the economy in order to generate the public and private resources to provide for those in need.
We need a strong economy in order to have the revenue to maintain and expand our state park system. And, we must expand the economy in order to increase salaries of professors, teachers and other state workers who often are underpaid for the work we demand of them.
The list of what we want to do for the people of Hawaii is long, but we might as well throw that list away if the economy remains as it is.
While some will point out that there are economic factors beyond our control, and that’s true, there are many factors within our control. Those are the ones we will focus on.
With clear principles, careful planning and flawless execution we can make a significant difference in our state’s financial condition, but again, only if we work together.
Hawaii has one of the highest tax burdens of all 50 states, and there are aspects of it that simply aren’t fair. People should not be taxed for being sick or when they are simply feeding their families. When the economy improves I will ask you to repeal the tax on food and medical services.
But given the fiscal reality we face, the only tax relief I am asking for in this budget is to reduce the income taxes of those who earn the least. We do this by increasing the standard deduction with a goal of raising it to 50 percent of the federal standard deduction within three years, and eventually to 100 percent.
Raising the standard deduction has several important benefits. First, it makes our tax system more progressive and equitable by providing tax relief directly to low-income taxpayers that as a group almost always rely on the standard deduction.
Second, it simplifies government, immediately reducing by 18,000 the number of taxpayers who have to file a state income tax return, and by 44,000 the number of residents who have to itemize their deductions.
A third and important benefit of raising the standard deduction is that it acknowledges the hard work of the many experts who have served on state tax review commissions over the past 18 years. Raising the standard deduction to a higher percentage of the federal level has been a primary recommendation of every single commission from the very first one in 1984 to the most recent, which just submitted its report last month.
Let me repeat that, every state tax review commission has included this proposal on the list of what was needed to make the tax system simpler and fairer. Every one.
Even though this first step is not as big as I would like, on principle alone this tax-fairness journey must begin now.
But tax policy alone would not expand the economy to the extent needed, even if the proposed tax cut could be much larger. We must also create an environment where existing businesses are able to grow and new investment is attracted to our state.
We need a level playing field with rules that protect consumers and our fragile environment while providing businesses with the stability and consistency that they need.
To that end, I have selected cabinet directors who fully understand that business, not government, creates prosperity, and that we must work hard to change Hawaii’s anti-business reputation. From today forward, my entire cabinet will be looking for ways to help existing businesses grow and to attract new businesses and investment to Hawaii.
I am introducing a number of specific bills that will increase competition among businesses because we believe that it works to the consumers’ advantage. Simply put, competition results in better service and lower prices.
I am proposing to level the playing field for private health insurance companies by eliminating the 4 percent general excise tax on their policies, thereby increasing dramatically the chances of new providers entering the market.
I am also proposing that HMSA and Kaiser Permanente be prohibited in the future from sitting on the board that recommends which insurance companies can enter the market in Hawaii.
HMSA and Kaiser have been good corporate citizens, but the reason they dominate the market in Hawaii has as much to do with structural flaws as it does with the price of their product or quality of their service. I believe with increased competition these companies will do an even better job and at an even better price. That’s the nature of competition.
As you may have read, physicians in various parts of the country have been complaining about the high cost of medical malpractice insurance. Rates in Hawaii recently were increased substantially. Some of the increase is due to frivolous lawsuits filed by people who see our courts as one giant slot machine.
Don’t misunderstand, doctors sometimes do make mistakes, and injured people should always be allowed to seek compensation for their injuries.
I am proposing legislation that only affects lawsuits that are found by a panel of independent doctors and lawyers to be without merit. It will reduce the cost of malpractice insurance and help to hold down the cost of healthcare.
Another proposal to improve our business image would allow employers to take personnel action against an employee who has done something wrong without fear of it leading to a worker’s compensation claim.
Recently, a worker was fired for stealing. The Hawaii Supreme Court ruled that he could receive compensation for the stress he felt from getting fired for stealing.
This is exactly the kind of nonsense that has caused so many businesses to steer clear of Hawaii.
Again this year I will be supporting the Ko Olina tax credit, but ”’only”’ with the binding promise of the developer to fund meaningful training for residents on the Leeward Coast.
Viewed in the abstract, this credit can easily be criticized. But viewed in the context of our shameful, decades-long neglect of the Leeward Coast community, it is a wonderful opportunity for all of us to really make a difference.
The Weinberg Foundation owns land at Ko Olina and the foundation’s trustees are enthused both about the resort’s master plan and the potential for dramatically changing lives for the better.
Already Ritz Carlton has signed a letter of intent to have a major presence in the development. In short, this is a big deal for the state, the construction industry, one of the country’s largest charitable institutions, and especially for a community that has long been neglected. These are the reasons I support this tax credit and why I will be working hard to gain your support as well.
”Health”
There are several health-care issues that we need to address in the current session. But first, let me address one that you attempted to deal with in last year’s session.
As you know, I have been critical of last year’s legislation relating to prescription drugs primarily because it offered nothing in the way of ”’immediate”’ help for people needing medication in order to maintain a decent quality of life. Even today, one year later, not one single person has been helped.
Depending on a number of things, it may be that the existing legislation eventually will provide some relief. But, that’s a big maybe. And to get the relief, the legislation requires an increase in the size of state government.
In order to bring immediate relief, I have put together a public-private partnership that will provide free prescription drugs to our most vulnerable citizens. This unique program is possible because the Hawaii Medical Association has offered to mobilize the support of Hawaii’s physician community, and fund a hotline so that help is readily available.
The Department of Health and the state hospital system will be working closely with them.
It is estimated that this program, which is already operating successfully at Maui Medical Center, will serve approximately 20,000 low-income individuals in its first year. Local charities have expressed interest in funding this program. This is the kind of creative solution that is possible even in fiscally challenging times because members of the community step forward to help others.
Hawaii’s medical community deserves our thanks for their selfless service, not just in making this prescription-drug program possible, but for all that they do day to day in promoting public health.
When it comes to long-term care, there has been a lot of talk, and worrying, but very little action. The problem we are trying to solve is how to ensure long-term care without going broke in the process.
Long-term care insurance is readily available and often affordable, but relatively few people have availed themselves of this self-help remedy. To encourage the purchase of such insurance, I am proposing a 30 percent tax credit to be phased in over a three-year period.
”Home Rule”
Another topic I feel strongly about is the need to restructure the relationship between the state and county governments. Some think the counties aren’t ready to make their own decisions and chart their own course. These people believe the state must maintain control over the counties.
But just as parents know that they must eventually allow their children to grow up and make their own way in the world if they are to reach their full potential, so must state government recognize that it is time for the counties to shoulder more of their own responsibilities.
I am proposing that counties should be allowed to establish their own civil service system and chart their own course in collective bargaining.
The counties also should be allowed to decide what fireworks, if any, to permit rather than the state developing a one-size-fits all law.
What makes sense in urban Honolulu may not on the Neighbor Islands or even in rural Oahu. Let each county decide what works best for it when it comes to fireworks.
Since uncontested traffic tickets are issued by county-paid and equipped police officers, the fines from those tickets should go directly to the counties. I have proposed to pay 100% of these unadjudicated fines to the counties over the next two years. The counties have waited too long for these funds. It is the fair thing to do.
”More to Come”
There are other issues I wanted to talk with you about today such as homeland security, public safety, real autonomy for the University of Hawaii and protecting the environment, but that would take me well into the next hour. Therefore over the next few days I will continue to lay out our administration’s initiatives in these and other areas.
Before I conclude, I want to make special mention and give thanks to the men and women in our armed forces who have shipped out in recent days to the Middle East. And, I want to ask the people of Hawaii to take every opportunity to give moral and other support to military families in the coming weeks and months. We in state government will find ways to do the same.
Regardless of your opinion on the situation in the Middle East and what our response should be, please remember that the members of our armed forces are our own sons and daughters, mothers and fathers, and husbands and wives … and those of our neighbors. Please reach out to them at this difficult time. And, never forget they are risking their lives to protect our way of life in America.
As I said when I began this address, our journey for the next couple of years will not be easy. The challenges we face as a state are significant. And of course, we are living in very uncertain times. Homeland security issues, global conflict and a worldwide economic slow down will make our job that much more difficult.
But I am up to the task and I expect you are as well. In fact, I relish the thought of working with you to meet the challenges that lie ahead.
Without question, there will be tough decisions to make. But, I know we can do it if we come together and work as one ohana.
Let us dedicate ourselves to rebuild our state and strengthen our communities.
Let us do this by honorably serving those who have entrusted us with their future, and by honoring the values of generations past— their dedication to family, concern for neighbors and respect for island tradition.
Let us go forward, and let today be the day that all future generations will remember as the ”’Dawn of our New Beginning for Hawaii”’ — a New Beginning that restored hope and opportunity to all the people.
Mahalo.
State of the State – Jan. 21, 2003-An Outline of the Governor’s Agenda
“Linda Lingle Image”
Mr. President, Mr. Speaker, Members of the Legislature, Lt. Governor Aiona, Senator Inouye, Congressman Abercrombie, Congressman and Mrs. Case, Mayor and Mrs. Harris, Mayor Kim, and Mayor Arakawa, Governor Ariyoshi, Governor and Mrs. Waihee, Members of the Consular Corps, Distinguished guests, And to all the people of Hawaii,
Aloha.
As I stand before all of you assembled here today, as well as those watching on television and the Internet, and listening on the radio, it is hard to believe that this is only my 50th day in office. The time has passed quickly … but much has been done, including the selection of my cabinet.
Before introducing our new directors, I want to thank the 150 volunteers who served on our 13 search committees. These citizens studied thick stacks of resumes, conducted many extensive interviews, and narrowed each search to a short list of candidates.
As a result of their efforts, I have been able to assemble a cabinet filled with people of integrity, ability, accomplishment and vision. Please hold your applause as I name my new directors and their respective positions.
*Georgina Kawamura, Director, Dept. of Budget & Finance
*Mark Bennett, Attorney General
*Russ Saito, Comptroller, Dept. of Accounting & Gen. Services
*Sandra Kunimoto, Chair, Board of Agriculture
*Ted Liu, Director, Dept. of Business, Economic Dev. & Tourism
*Mark Recktenwald, Dir., Dept. of Commerce & Consumer Affairs
*General Bob Lee, Adjutant General, Dept. of Defense
*Micah Kane, Chairman, Hawaiian Homes Commission
*Dr. Chiyome Fukino, Director, Dept. of Health
*Kathy Watanabe, Director, Dept. of Human Resources Development
*Lillian Kohler, Director, Dept. of Human Services
*Nelson Befitel, Director, Dept. of Labor & Industrial Relations
*Peter Young, Chairman, Board of Land & Natural Resources
*Rod Haraga, Director, Dept. of Transportation
*And also interim Director Jim Propotnick, Dept. of Public Safety
*and Deputy Director of Taxation, Kurt Kawafuchi
Ladies and Gentlemen, I present to you the most talented group of individuals I have ever had the pleasure to lead.
It has been the tradition for legislators and others to applaud from time to time during the Governor’s State of the State Address as you so graciously just did. My request this morning, however, is that you hold such applause to a minimum. Otherwise we might end up still being here live at 6:30 tonight after all.
I am honored and very humbled to come before you today for this, my first State-of-the-State Address as Governor of our Great State of Hawaii.
Mr. President, Mr. Speaker, I want to thank both of you for your promises of openness and cooperation last week during opening day ceremonies. Please know that I pledge the same to you.
We agree that the people of Hawaii have spoken loudly and clearly. They have stated in no uncertain terms that the status quo is no longer acceptable. They want a new beginning and that is exactly what we must give them.
The people of Hawaii want better schools, with real alternatives for children who have not been able to thrive in a one-size-fits-all statewide system. They want a system that puts the interests of the children above those of anyone else, including union leaders and politicians. They want schools that prepare their children for a better life.
The people of Hawaii also want a government they can trust to deal with people openly, honestly and fairly.
They want an honest budget built on a solid foundation of fiscal discipline, a budget that is understandable and that reflects their priorities. And they want all of us to be held accountable for what we deliver or what we fail to deliver.
Good schools, good jobs, good government. These are not unreasonable demands. But sadly, some of our people have already lost heart and have left Hawaii to look for these things elsewhere.
We cannot allow this to continue. The people of Hawaii want a new beginning that starts now and includes them, their children, and their children’s children. So let us begin.
First, let me state the obvious — our journey will be neither short nor easy.
Let’s talk about the numbers. As you know, the prior administration submitted a financial plan that used the Hurricane Relief Fund to balance the budget in the upcoming biennium. This is something we must not do.
Without exception, experts tell us, the question isn’t whether there will be another Iniki, but when. They also say it isn’t a question of whether our most populated areas will be hit, but when.
We know from experience that insurance companies cannot be depended upon to write new policies in the aftermath. Too much is at stake for us not to be ready to enter the reinsurance market when the next hurricane hits and to care for our people during the massive recovery that will surely follow. That is why I will not raid this fund under any circumstances.
So right off the bat there is a shortfall of $175 million in the budget, as originally submitted.
And now we know that the unfunded liability in the state retirement system exceeds three billion dollars. The state does not have to contribute this entire amount immediately, but it will eventually. Besides the obvious legal obligation, it would be morally wrong to push this debt onto the shoulders of the next generation.
You can see that the road to restoring fiscal discipline and integrity will be long, and occasionally bumpy.
Even so, we must begin this journey now. Accordingly, my legislative package does not propose a host of new, expensive programs, across-the-board pay raises for state workers, or substantial tax cuts.
I would like to do all three of these things, but that would be fiscally irresponsible under the present circumstances.
Major new initiatives and substantial tax cuts must wait until fiscal discipline has been restored to state government and the economy has improved.
Instead, I am proposing modest but significant, common-sense proposals that include changes to our tax system that will help those earning the least; tax credits to stimulate the economy in an area of chronically high unemployment; fairness in our financial relationship with the counties; help for families dealing with the high cost of long term care; and continued support for alternative energy use.
In addition, I will offer proposals that encourage greater competition in the marketplace in order to improve the business climate and create new jobs.
I plan to reinvigorate the public’s willingness to help, and I will motivate our state workers to perform at a higher level where their ideas and contributions are given proper recognition.
We must put our house back in order … step by careful step … working together to create long term, fundamental, structural change. This will not just get us through the tough times, but also allow us to prosper when the times are better.
By working together we can recreate state government so that it is more trusted and efficient. We can revitalize our economy so Hawaii’s families can stay together and provide a good life for the generation that comes next.
Together we also can fulfill our obligation to provide a good, solid education to every child in every community across this state.
I cannot do this alone … and neither can you. We need each other, and we need each other to put aside any notion of partisanship.
Let’s face it, one party rule, whether it was Republicans 40 years ago or Democrats in recent times, has not served the people well.
Hawaii is an island state, thousands of miles from anywhere. And this fact should affect the way we do things.
It’s as if we are in a boat, caught in treacherous waters, needing to set sail for a better place. If I were to chart a course north, but you insisted on going south, then we would go nowhere. We would stay stuck exactly where we started.
Like it or not, we are in this together, and the rest of the state is watching. The people expect us to settle on a course and then work together to get there.
From this day forward, let us agree that the principle by which we will judge proposals for new policies, programs and laws will be whether or not they serve the best interests of all the people of Hawaii.
It is by this standard that I am honored to present now my vision and concrete proposals for Hawaii’s future.
Before a community can prosper, the people must believe in their leaders. They must know that at the core of every decision is careful planning, hard work, and unbending integrity rather than partisanship or self-gain. They must trust that the awesome power of government is not being abused.
To begin the process of earning back the people’s confidence in public servants, I will be asking you to send a loud and clear message that any public official who abuses the public’s trust can expect harsh and certain consequences, including a mandatory prison sentence.
And those who seek to influence public officials will be well advised to limit their efforts to persuasive argument. Large gifts to public officials, including exclusive golf outings and lavish entertainment, will be presumed attempts to bribe and treated as such.
Whether such gratuities actually influence decisions is not the issue. Public trust is at stake and we must do whatever it takes to earn back that trust.
I also will be taking steps to get politics out of government. Among other things, this means that no state worker should ever be required or pressured to attend a political fundraiser or to hold a sign on the side of the road.
Any state worker who ever feels pressured to engage in any kind of political activity should report it to my office immediately. In my administration there will be zero tolerance for any such behavior.
It is critically important that government conduct elections and tally results in a nonpartisan, nonpolitical way so that the people can trust the announced outcome. I find it almost unbelievable that Hawaii law requires all precinct chairs to be members of the same political party as the governor. It has been this way for many years. And although my Party and I would benefit if the law remains the same, it is wrong, and must be changed to allow all citizens, regardless of party, to participate at all levels of the election process.
I am also calling for mandatory posting of election results at each precinct, and mandatory recounts in especially close elections.
The public also is rightly concerned about the large amounts of money contributed to political campaigns by businesses that then get millions of dollars in non-bid contracts. Accordingly, I ask that you enact a law prohibiting political contributions by anyone benefiting from non-bid contracts.
This effectively will prevent many businesses from financially supporting the candidates of their choice, and that’s unfortunate. But the people have made clear their desire for this kind of campaign finance reform.
Trust and integrity in government will be restored only when people know that their government is honest and fair. For them to make this judgment, government also must be open.
I have already initiated a number of changes intended to make government more transparent. As I mentioned earlier, almost all of my directors were selected from short lists provided by volunteer selection committees.
In putting together the committees I did not ask anyone about their own politics and I specifically instructed the committees not to ask any candidate what party they belonged to, if any, or how they voted in the last election. Each committee was instructed simply to provide a short list of the very best candidates in this state.
The majority of people now serving in my cabinet are people that I met for the first time during their interview for the position.
I believe with my whole heart that this is the way government has to operate if we are to regain the people’s trust. The old days of “who you know” being more important than “what you know” are pau.
I am proposing an omnibus procurement bill that will bring much needed transparency into government contracting. The process will be honest, fair and totally merit-based. This bill is the result of recommendations made by a volunteer committee composed of government, industry and academic experts in the procurement field.
The bill also includes a novel form of electronic bidding that we call a reverse version of ebay. Companies wanting a particular contract will be able to bid the job via their computer terminal. The qualifying company with the lowest bid gets the work.
The state employee who proposed this concept, Aaron Fujioka, has shared other ideas that we think have a lot of potential. My directors and I will work hard to establish the kind of trust and respect for state employees that will motivate and reward them for continuing to find ways to save money and improve services.
Also in the spirit of making government more open, I have instructed my budget director to conduct a comprehensive audit of the state’s finances, and then to produce an understandable report that will explain where state revenues come from and how they are being spent. In the future, the report will include evaluations of each department.
And finally, restoring trust in government means keeping government’s promises and commitments to Native Hawaiians.
Next month my senior staff and various members of the Hawaiian community will accompany me to Washington D.C. where I will meet with members of the Bush Administration and testify before Congress on the reasons why federal recognition of Native Hawaiians is so critically important to all the people of Hawaii.
Here at home in Hawaii I will continue to work with you and with the Hawaiian community to resolve the ceded lands issue once and for all.
Our joint decision to make the $10.3 million payment is a good first step, but that is all it is. Like so many other issues we currently face, the ceded lands issue is one that did not occur overnight, and will not be resolved overnight. It is as complicated as it is emotionally charged. But until we get it resolved, our community can never really come together as one.
And make no mistake, my vision is that of one Hawaii.
While working hard for a just resolution, we must make absolutely sure that we do not inadvertently drive a wedge between Hawaiian and non-Hawaiian communities.
”Improve Public Education”
Let’s turn our attention now to public education.
The public knows and we should not be afraid to say it — Hawaii’s public school system is broken. The people closest to the situation, the teachers and administrators themselves, reportedly send their own children to private schools at a rate dramatically higher than that of the general public. I suspect that the same could be said of business leaders and politicians.
There is nothing wrong with a parent’s decision to send his or her children to the school where they are most likely to thrive. What is wrong is that not every parent has this option.
As currently structured, the public school system offers virtually no choice to parents. It’s a one-size-fits-all structure than has long outlived its value.
It is like no other system in America, and it’s not working.
When it comes to public education, the old way of thinking was that decisions were best made by a small group of well-intentioned people in an office building in downtown Honolulu. Current thinking is that as many decisions as possible should be made by people directly affected by those decisions.
In theory, Hawaii’s public school system has embraced the new thinking. SCBM — school Community-Based Management — it has been touted as a means by which parents, teachers and administrators can chart the destiny of their own schools. Unfortunately, it simply has not worked out that way. Let me give you just one example.
Lahainaluna High School wants to change by exactly one week the date of this year’s graduation exercises. This manini change is supported by students, parents, teachers, administrators, and the school’s SCBM Council. They all want it.
But believe it or not, they have no control over the matter. The decision to change the date of any one school’s commencement can be made only by DOE administrators in Honolulu.
When this same issue came up several years ago the DOE denied the same school’s request for the date change. That began a massive letter-writing campaign to the Board of Education and eventually the Board reversed the DOE decision.
Despite all the talk about SCBM, the concept of local community control continues to be foreign in Hawaii.
The time has come to move resources AND decision-making away from the DOE’s central office in Honolulu and to empower local communities to think and act in their own best interest.
I believe this can best be done by replacing our current statewide system with seven, locally elected school boards.
NO other state, other than Hawaii, has a statewide school system. NONE. Not even one. The reason they don’t is because it doesn’t work.
Once local school districts are established, fair and equal funding would continue to be determined on a statewide basis, and certain basic standards would continue to be set and monitored by both the state and federal government. But the hiring and evaluating of principals would be done at the local level as would decisions such as when to hold a graduation ceremony.
I am convinced that the people of Hawaii want local school boards that are accountable to their own communities.
That’s why today I am proposing that we let the people decide this important issue via a statewide ballot referendum. Let’s ask the people of Hawaii if they want to amend the constitution to allow local school boards.
The key to reforming public education in Hawaii is to give parents meaningful choices so they can find the right spot for their own child.
Many children simply do not fit in our present one-size-fits-all system. And miserable themselves, they often become disruptive. Currently there is no real alternative for these children within the DOE.
I am determined to increase dramatically the number of choices available within the DOE.
We can do this by encouraging and supporting schools within a school, magnet schools, e-schooling and home schooling as meaningful choices.
For example, if parents decide that home schooling is best for their child, that child should not be prevented from taking advantage of extracurricular activities available to other public school students.
The current practice of denying home-schooled kids an opportunity to participate in sports or band, is mindless and it unfairly punishes the child. This is wrong and it must stop now.
The best way to provide meaningful choice within the DOE is allowing more charter schools, and then nurturing them. The current DOE attitude toward charter schools is benign neglect at best and antagonistic at worst.
The federal Dept. of Education’s top charter school expert has described our current charter school system in Hawaii as having been designed to fail, functioning now only because of the passion of its proponents.
With his help, and that of local educational experts, I am proposing changes that will redesign charter schools for success.
First, the funding must change. Right now, the funding assumes that the value of services provided to the charter schools by the DOE is nearly as much as all the money going into salaries of the teachers and principal, rent and other costs of operation. This is absurd.
My proposal is to give the charter schools the full cost of educating a child and then let the principal of each charter school decide if what the DOE has to offer is worth paying for.
Fair funding is just the beginning. Under my plan, charter schools would be free to make their own hiring decisions. The UPW would not have a lock on any jobs, nor would the HGEA or the HSTA. Once hired, teachers, secretaries and janitors would be free to form or join a union, but that would be their choice. Unlike the present arrangement, they would not be forced to belong and pay dues to any particular union.
The role of a principal at any school — private, charter or traditional public school, is different from that of teachers and other school workers. Just about every study of individual-school effectiveness has stressed the critical role played by the school principal.
Hawaii is the only state in America in which principals belong to a union.
Principals are a part of management. They have no place in a union. Sure, union leaders and many existing principals like it, but it has proven to be disastrous for the children.
Ladies and gentlemen, if you do only three things to improve public schools during this legislative session, you should allow the people of Hawaii to decide if they want local school boards, get principals out of the union and fairly fund the charter schools.
I am also proposing new initiatives to empower teachers and principals to remove disruptive students from the classroom. Again, with so much at stake we cannot continue to allow a relative few to deny a good learning environment to the many.
Too often, teachers have been given every incentive not to crack down on disruptive students. Those few teachers who take action often regret it because they receive no support. That must change.
These kinds of changes will provide real accountability. Teachers will be free to teach, principals to manage and local school boards to lead. Parents, teachers and taxpayers will know who to hold accountable, and for what.
Until last week, I had not considered the issue of drug testing in our schools. But when Senator Bunda suggested that it might be time to consider drug testing as a constructive tool to help students and their families, it struck a chord with me and with Lt. Governor Aiona.
I have asked the lieutenant governor to convene a gathering of all interested parties to outline a plan to implement a voluntary drug testing program in our schools that will lead to providing help to those students involved with drugs.
If a student voluntarily tests positive for drugs, he or she will not be arrested, expelled or even suspended. Nothing will be publicized. Instead, that student and their parents will be required to meet with a professional counselor and others who know and care about that student, and to plot out a strategy to effectively address the problem.
Sure there are lots of issues to resolve with such a program, but the lives of our children are at stake, as well as the safety of our communities. Lt. Gov. Aiona is a former family court judge who is used to working with others to resolve difficult issues, and I have complete confidence that he will see this idea through.
I want to thank Senator Bunda for this idea and invite him both to help in this effort and rightfully claim credit for the good that will surely come of it.
One final issue involving young people that I’d like to talk about is the age of consent. Prior to 2001, the age of consent in Hawaii was 14 years old — the lowest in the nation. You did the right thing by raising the age of consent to 16, but you included a sunset provision. I call upon you to finish your work and to make the current age of consent permanent.
”Expand the Economy”
My friends, we know that we must expand and diversify our economy. We must do so in order for businesses to succeed and create new jobs. We must expand the economy in order to generate the public and private resources to provide for those in need.
We need a strong economy in order to have the revenue to maintain and expand our state park system. And, we must expand the economy in order to increase salaries of professors, teachers and other state workers who often are underpaid for the work we demand of them.
The list of what we want to do for the people of Hawaii is long, but we might as well throw that list away if the economy remains as it is.
While some will point out that there are economic factors beyond our control, and that’s true, there are many factors within our control. Those are the ones we will focus on.
With clear principles, careful planning and flawless execution we can make a significant difference in our state’s financial condition, but again, only if we work together.
Hawaii has one of the highest tax burdens of all 50 states, and there are aspects of it that simply aren’t fair. People should not be taxed for being sick or when they are simply feeding their families. When the economy improves I will ask you to repeal the tax on food and medical services.
But given the fiscal reality we face, the only tax relief I am asking for in this budget is to reduce the income taxes of those who earn the least. We do this by increasing the standard deduction with a goal of raising it to 50 percent of the federal standard deduction within three years, and eventually to 100 percent.
Raising the standard deduction has several important benefits. First, it makes our tax system more progressive and equitable by providing tax relief directly to low-income taxpayers that as a group almost always rely on the standard deduction.
Second, it simplifies government, immediately reducing by 18,000 the number of taxpayers who have to file a state income tax return, and by 44,000 the number of residents who have to itemize their deductions.
A third and important benefit of raising the standard deduction is that it acknowledges the hard work of the many experts who have served on state tax review commissions over the past 18 years. Raising the standard deduction to a higher percentage of the federal level has been a primary recommendation of every single commission from the very first one in 1984 to the most recent, which just submitted its report last month.
Let me repeat that, every state tax review commission has included this proposal on the list of what was needed to make the tax system simpler and fairer. Every one.
Even though this first step is not as big as I would like, on principle alone this tax-fairness journey must begin now.
But tax policy alone would not expand the economy to the extent needed, even if the proposed tax cut could be much larger. We must also create an environment where existing businesses are able to grow and new investment is attracted to our state.
We need a level playing field with rules that protect consumers and our fragile environment while providing businesses with the stability and consistency that they need.
To that end, I have selected cabinet directors who fully understand that business, not government, creates prosperity, and that we must work hard to change Hawaii’s anti-business reputation. From today forward, my entire cabinet will be looking for ways to help existing businesses grow and to attract new businesses and investment to Hawaii.
I am introducing a number of specific bills that will increase competition among businesses because we believe that it works to the consumers’ advantage. Simply put, competition results in better service and lower prices.
I am proposing to level the playing field for private health insurance companies by eliminating the 4 percent general excise tax on their policies, thereby increasing dramatically the chances of new providers entering the market.
I am also proposing that HMSA and Kaiser Permanente be prohibited in the future from sitting on the board that recommends which insurance companies can enter the market in Hawaii.
HMSA and Kaiser have been good corporate citizens, but the reason they dominate the market in Hawaii has as much to do with structural flaws as it does with the price of their product or quality of their service. I believe with increased competition these companies will do an even better job and at an even better price. That’s the nature of competition.
As you may have read, physicians in various parts of the country have been complaining about the high cost of medical malpractice insurance. Rates in Hawaii recently were increased substantially. Some of the increase is due to frivolous lawsuits filed by people who see our courts as one giant slot machine.
Don’t misunderstand, doctors sometimes do make mistakes, and injured people should always be allowed to seek compensation for their injuries.
I am proposing legislation that only affects lawsuits that are found by a panel of independent doctors and lawyers to be without merit. It will reduce the cost of malpractice insurance and help to hold down the cost of healthcare.
Another proposal to improve our business image would allow employers to take personnel action against an employee who has done something wrong without fear of it leading to a worker’s compensation claim.
Recently, a worker was fired for stealing. The Hawaii Supreme Court ruled that he could receive compensation for the stress he felt from getting fired for stealing.
This is exactly the kind of nonsense that has caused so many businesses to steer clear of Hawaii.
Again this year I will be supporting the Ko Olina tax credit, but ”’only”’ with the binding promise of the developer to fund meaningful training for residents on the Leeward Coast.
Viewed in the abstract, this credit can easily be criticized. But viewed in the context of our shameful, decades-long neglect of the Leeward Coast community, it is a wonderful opportunity for all of us to really make a difference.
The Weinberg Foundation owns land at Ko Olina and the foundation’s trustees are enthused both about the resort’s master plan and the potential for dramatically changing lives for the better.
Already Ritz Carlton has signed a letter of intent to have a major presence in the development. In short, this is a big deal for the state, the construction industry, one of the country’s largest charitable institutions, and especially for a community that has long been neglected. These are the reasons I support this tax credit and why I will be working hard to gain your support as well.
”Health”
There are several health-care issues that we need to address in the current session. But first, let me address one that you attempted to deal with in last year’s session.
As you know, I have been critical of last year’s legislation relating to prescription drugs primarily because it offered nothing in the way of ”’immediate”’ help for people needing medication in order to maintain a decent quality of life. Even today, one year later, not one single person has been helped.
Depending on a number of things, it may be that the existing legislation eventually will provide some relief. But, that’s a big maybe. And to get the relief, the legislation requires an increase in the size of state government.
In order to bring immediate relief, I have put together a public-private partnership that will provide free prescription drugs to our most vulnerable citizens. This unique program is possible because the Hawaii Medical Association has offered to mobilize the support of Hawaii’s physician community, and fund a hotline so that help is readily available.
The Department of Health and the state hospital system will be working closely with them.
It is estimated that this program, which is already operating successfully at Maui Medical Center, will serve approximately 20,000 low-income individuals in its first year. Local charities have expressed interest in funding this program. This is the kind of creative solution that is possible even in fiscally challenging times because members of the community step forward to help others.
Hawaii’s medical community deserves our thanks for their selfless service, not just in making this prescription-drug program possible, but for all that they do day to day in promoting public health.
When it comes to long-term care, there has been a lot of talk, and worrying, but very little action. The problem we are trying to solve is how to ensure long-term care without going broke in the process.
Long-term care insurance is readily available and often affordable, but relatively few people have availed themselves of this self-help remedy. To encourage the purchase of such insurance, I am proposing a 30 percent tax credit to be phased in over a three-year period.
”Home Rule”
Another topic I feel strongly about is the need to restructure the relationship between the state and county governments. Some think the counties aren’t ready to make their own decisions and chart their own course. These people believe the state must maintain control over the counties.
But just as parents know that they must eventually allow their children to grow up and make their own way in the world if they are to reach their full potential, so must state government recognize that it is time for the counties to shoulder more of their own responsibilities.
I am proposing that counties should be allowed to establish their own civil service system and chart their own course in collective bargaining.
The counties also should be allowed to decide what fireworks, if any, to permit rather than the state developing a one-size-fits all law.
What makes sense in urban Honolulu may not on the Neighbor Islands or even in rural Oahu. Let each county decide what works best for it when it comes to fireworks.
Since uncontested traffic tickets are issued by county-paid and equipped police officers, the fines from those tickets should go directly to the counties. I have proposed to pay 100% of these unadjudicated fines to the counties over the next two years. The counties have waited too long for these funds. It is the fair thing to do.
”More to Come”
There are other issues I wanted to talk with you about today such as homeland security, public safety, real autonomy for the University of Hawaii and protecting the environment, but that would take me well into the next hour. Therefore over the next few days I will continue to lay out our administration’s initiatives in these and other areas.
Before I conclude, I want to make special mention and give thanks to the men and women in our armed forces who have shipped out in recent days to the Middle East. And, I want to ask the people of Hawaii to take every opportunity to give moral and other support to military families in the coming weeks and months. We in state government will find ways to do the same.
Regardless of your opinion on the situation in the Middle East and what our response should be, please remember that the members of our armed forces are our own sons and daughters, mothers and fathers, and husbands and wives … and those of our neighbors. Please reach out to them at this difficult time. And, never forget they are risking their lives to protect our way of life in America.
As I said when I began this address, our journey for the next couple of years will not be easy. The challenges we face as a state are significant. And of course, we are living in very uncertain times. Homeland security issues, global conflict and a worldwide economic slow down will make our job that much more difficult.
But I am up to the task and I expect you are as well. In fact, I relish the thought of working with you to meet the challenges that lie ahead.
Without question, there will be tough decisions to make. But, I know we can do it if we come together and work as one ohana.
Let us dedicate ourselves to rebuild our state and strengthen our communities.
Let us do this by honorably serving those who have entrusted us with their future, and by honoring the values of generations past— their dedication to family, concern for neighbors and respect for island tradition.
Let us go forward, and let today be the day that all future generations will remember as the ”’Dawn of our New Beginning for Hawaii”’ — a New Beginning that restored hope and opportunity to all the people.
Mahalo.
Budget and Finance Director Gives Highlights of State Financial Plan-Before State House Committee on Finance, Jan. 14, 2003
Mr. Chairman and Members of the Committee:
I want to start by thanking all of you for your patience and understanding in allowing us the opportunity to present a new financial plan. We have been working very hard with all departments to make revisions that will reflect both our administration’s focus on fiscal discipline as well as the need to stimulate the economy.
One of our basic tasks was to balance the budget without using the Hurricane Relief Fund. We believe the Hurricane Relief Fund should be maintained in order to ensure that the people of Hawaii will be protected following the next hurricane, which everyone agrees is a certainty. We have to be sure that the state of Hawaii will not be hampered during recovery efforts and that insurance will be readily available to homeowners and businesses. Also, we believe that to restore trust in government, this obligation must be fulfilled and the intent of the fund must remain intact.
To achieve our goals while fulfilling this obligation we implemented a freeze on filling nonessential vacancies and requested a 5 percent reduction of discretionary expenditures for the remainder of fiscal year 2003. Exemptions were allowed for debt service, fringe benefit costs, costs associated with the Felix consent decree, University of Hawaii and Department of Education instruction and school level support, public welfare, and funding for child and adult mental health costs.
Following is the revised MultiYear General Fund Financial Plan, which is based on January 2003 Council on Revenue projections. Please view this as our preliminary proposal as many details are still being worked out with individual departments and this plan may change during the session.
However, I feel this is a good starting point for both the Legislature and the general public to begin to understand how we will achieve our goals of restoring fiscal discipline while at the same time delivering a wide range of quality public services.
These are highlights of the financial plan for the current fiscal year 2003:
*A net increase (from the December 2002 financial plan) of $22.0 million in non-tax revenues from the Council on Revenue September 2002 estimates.
*Projected revenues include FY 02 carryover balances of $134 million; $2.0 million to be transferred from the Bureau of Conveyance special fund; and $18.1 million from bond premium proceeds.
*Projected expenditures include: $179.4 million for approved collective bargaining raises; a total of $23.5 million for legislative claims and other specific legislative appropriations made in prior sessions for FY 03; proposed emergency appropriations totaling $40.8 million; and expenditures of $2.9 million for special election and vacation payout costs.
*Expenditures are reduced by $39.7 million from 5 percent restrictions on the discretionary operating budget ($35 million) and restrictions on specific appropriations ($4.7 million).
*Other reductions to expenditures come from debt service savings (series CZ) of $8.3 million, and from annual statewide lapses of $55.0 million.
*For the upcoming 2003-2005 biennium and years to follow, our budgetary focus is on maintaining fiscal discipline and strengthening the economy in order to generate recurring revenue sources to meet recurring expenses.
*These are our revenue and expenditure assumptions for FB 200305 (FY 04 and FY 05): A net increase (from the December 2002 financial plan) of $15.1 million and $15.0 million in nontax revenues from the Council’s September 2002 estimates for FY 04 and FY 05, respectively.
*Projected revenues include $200,000 in FY 04 and $6.8 million in FY 05 for additional reimbursements to the Retirement System; $33.7 million in special fund transfers to the general fund in FY 04; and $5.5 million in each fiscal year from the assessment of special funds for central service expenses.
*To ensure financial accountability, we are initiating repeals of selected special funds that have outlived their purpose, or have no justifiable purpose. Any balances, if available, are to be transferred to the general fund.
*To ensure equitable fiscal responsibility, we will propose subjecting most special and nongeneral funds to central service assessments, unless prohibited by federal laws.
*Other revenue adjustments will include several tax initiatives to be introduced by Gov. Lingle in her State of the State Address. Specific details of those initiatives will be released next week. Estimated revenue impact will amount to approximately $30.0 million in FY 05.
*Projected expenditures over the biennium assume departmental budget requests that are limited to “no growth” ceilings (excluding fixed costs, and nondiscretionary costs such as welfare, education, health, mental health, fringe benefits, etc.), and the continuation of spending restrictions which will result in savings of $35 million per year.
*Projected increases to FY 04 and FY 05 ceilings are reduced by $17.5 million and $17.2 million, respectively.
*Other reductions to expenditures come from reduced debt service requirements based on revised issuance plans ($0.8 million in FY 04 and $3.8 million in FY 05), and from projected annual statewide general fund lapses of $55.0 million in each fiscal year.
*Over the planning period FY 06 through FY 09, our revenue assumptions include continuation of the impact of tax credits and central service assessments; and projected general fund nontax revenue increases through FY 09 (net increases from the December 2002 financial plan of $15.9 million, $16.5 million, $17.4 million, and $18.8 million in FY 06, FY 07, FY 08, and FY 09, respectively).
*On the expense side, we will continue strict spending policies and review our debt issuance plan to reduce debt service costs.
I would like to reiterate that these proposals are preliminary, and subject to adjustment or change, as circumstances warrant.
Operationally, we have already administratively implemented efforts toward structural reform of state government programs. FY 03 restrictions of 5 percent were imposed, and departments were directed to base their upcoming biennium and outyear budgets on this adjusted funding level. In addition, by instituting a freeze on the filling of position vacancies in selected areas, we expect to minimize and control growth, in all but essential areas of government service. At the same time, we are also reducing current and future capital improvement project authorizations to reduce the cost of debt that must be accommodated within current and future budgets, and to ensure that such costly, longterm obligations will be expended only for high priority program areas.
At this time, I would also like to discuss the following matters:
Revenue estimates of the Council on Revenues as of September 2002, and January 2003.
The status of the constitutionallymandated state aggregate general fund expenditure ceiling; and the status of the statutorilymandated general fund appropriation ceiling for the Executive Branch (as of December 2002).
The status of the General Obligation Bond Fund Debt Limit (as of December 2002).
The status of Constitutional Rebate/Credit requirements (as of December 2002).
Summary information on the Executive Biennium Budget for FY 04 and FY 05 and General Fund Financial Plan as of December 2002 is attached for your information.
Revenue Estimates of the Council on Revenues as of September 2002, and January 2003
The previous administration’s general fund financial plan for fiscal year 2003 and for the ensuing fiscal biennium 200305, were based on the constitutionallymandated Council on Revenue’s (Council) September 2002 revenue projections. On January 8, 2003, the Council retained its September 2002 general fund tax revenue growth rate forecast, which assumes that there will be no longterm major strikes, losses due to decreases in federal allocations, ill effects from a war in Iraq, unforeseen adjustments to tax laws, or other unanticipated occurrences. These latest revenue estimates must be considered when appropriating funds and enacting revenue measures.
That forecast calls for continued growth in current fiscal year 2003 revenues with an anticipated increase in general fund tax revenues of 6.1 percent from the negative 3.5 percent base recorded for fiscal year 2002.
As of the Council’s September 2002 forecast, and as reiterated by January 8, 2003 Council estimates, tax revenues were projected to increase from FY 03 to FY 04 by 5.7 percent, by 6.0 percent in FY 05, and by 5.1 percent, 5.2 percent, 5.0 percent, and 5.0 percent in fiscal years 2006, 2007, 2008, and 2009, respectively. While general fund tax revenue projections remained unchanged, nontax revenues which were not accounted for in the December 2002 Program and Financial Plan, General Fund Financial Plan are projected to increase from September 2002 estimates by $20.7 million in FY 03, $15.1 million in FY 04, $15.0 million in FY 05, and $15.9 million, $16.5 million, $17.4 million, and $18.8 million in FY 06, FY 07, FY 08, and FY 09, respectively.
As required by statute, the following declarations on the general fund expenditure ceiling, the general obligation debt limit, and tax rebate requirements, are based on budget recommendations of the previous administration. New calculations will be submitted with recommendations of this administration, as warranted.
The status of the constitutionallymandated state aggregate general fund expenditure ceiling; and the status of the statutorilymandated general fund appropriation ceiling for the Executive Branch.
State aggregate general fund appropriations proposed as of December 2002, which included executive appropriations, requirements of the Judicial and Legislative branches, and the Office of Hawaiian Affairs, amount to $3,931.2 million for FY 03, $3,936.6 million for FY 04, and $4,069.4 million for FY 05, which are within the constitutionally mandated expenditure ceilings for FY 03, FY 04, and FY 05, respectively.
Total recommendations included in the executive budget request of December 2002, have also been made in accordance with the appropriation ceiling for the Executive Branch pursuant to provisions of section 3792 of the Hawaii Revised Statutes. Funding proposed as of December 2002, for emergency program requirements in health and human services, and other state programs, will result in the appropriation ceiling for the Executive Branch to be exceeded in FY 03 by $52.9 million or 1.4 percent. Executive Branch appropriation ceilings for both FY 04 and FY 05 will not be exceeded … .
The status of the constitutional general obligation debt limit.
Pursuant to Section 13, Article VII of the Hawaii State Constitution, and based on the assumption that interest rates on proposed bond issuances will be issued at 6.0 percent, it has been determined that the principal and interest calculated on all bonds issued and outstanding, estimated for all bonds previously authorized and unissued, and on the bonds proposed as of December 2002, in the previous administration’s executive budget for the FB 200305, will not cause the debt limit to be exceeded at the time of each bond issuance … .
The Status of the constitutional Rebate or Tax credit requirement.
Section 6, Article VII of the State Constitution provides for a mandatory tax refund or credit if the general fund balances at the close of two successive fiscal years exceed 5 percent of general fund revenues for each of those two fiscal years. Although the general fund balance at the end of FY 01 exceeded 5 percent of general fund revenues, FY 02 fund balances as of December 2002, did not. Accordingly, the 2003 Legislature will not need to provide for a tax refund or tax credit for the 2003 tax year.
The Executive Biennium Budget for FY 04 and FY 05 (as of December 2002) … .
Total operating budget requests proposed as of December 2002 (including all means of funding), for the Executive Branch amounted to $7,463.3 million in FY 04 and $7,717.0 million in FY 05, for a total of $15,180.3 million over FB 200305. Proposed general fund operating appropriations for the biennium are $3,770.7 million for FY 04 and $3,904.5 million for FY 05.
The proposed capital improvements budget for the Executive Branch as of December 2002, amounts to $964.5 million in FY 04 and $621.6 million in FY 05, for a total of $1,586.1 million over the biennium. Of this amount, $1,120.1 million was proposed to be funded over the two years of the biennium by general obligation bond funds, and $7.3 million to be funded by reimbursable general obligation bond funds.
That concludes my presentation. During the course of the 2003 Session, departments will be providing specific information with regards to their individual programs and budgets. Should our planned financial outlook change, we will be sure to keep you informed.
Likewise, should the Council on Revenues’ estimates for March change markedly from current estimates, we hope you will work with us to make appropriate adjustments.
Again, I want to thank you for this opportunity to provide information on our revised financial plan and for your patience and understanding regarding the timing challenge that our new administration faced in preparing this plan.
Work Smarter – Not Harder
You may have heard the expression. You may have even been coached on this strategy. But what does it really mean to work smarter not harder? Is this a realistic possibility? Or is it a trite saying to create perplexity for the achiever in business?
Working smarter is about many different processes working hand in hand. Working smarter is about being “wise” in every business decision you make. It’s about putting the right systems into place in your department or business.
For example, you must develop a “Systems-Based Business” by implementing systems in your business or job to reduce the redundant activities. And don’t recreate the wheel! Ask others who have implemented systems to their business how they did it.
This can be as simple as identifying activities in your day that are wasting your time, causing you to work more and more hours, week after week. You can create a system to save you time each day, giving you a 40-hour surplus by the end of the year. If you decide to use this bonus week to plan your upcoming year strategically, you’ll be well on your way to working smarter, not longer.
Here are a few more quick examples of what you can do to work smarter, not harder:
*Use Technology: Be on the cutting edge instead of behind the times.
*Be Proactive: Adapt to business changes before your competitor does.
*Hire Experts: Hire people who are experts in their field so you can focus on what you do best.
*Build a Solid Team: Build a team of people with diverse strengths who make up for any weaknesses you may have within your company.
*Develop a Mastermind Group: Surround yourself with people who will encourage your ideas and give you new ones to consider and stretch your thinking.
*Practice “Kaizen”: Commit yourself to continuous learning. Read about innovative ideas others are implementing in a different industry than you.
Working smarter can be summed up by being the first to recognize an opportunity when others don’t. Your friends and family may call you crazy. But if you’re ahead of others in your industry/profession, I would encourage you to pursue your thoughts and ideas and turn them into a reality as soon as possible.
Execute your own market research to determine if your new product or service would meet the needs of people you already serve. The best test to determine if your idea will launch in the marketplace is looking at what currently exists compared to the needs of your current clients. If you are facing a challenge that has yet to be solved in your industry, you’re probably on to something big!
And if you’re thinking you need to have extensive capital to go into business for yourself, think again. I’ve coached many business owners who launched their own businesses with very little capital. Many owners never even received funding from a bank before they were able to turn their idea into a viable business.
Before you think you need to pay for extensive research, think creatively, not despairingly. Think laterally, not literally and figure out a way you can survey your target market without a large investment on your part. Perhaps you can partner with a business owner in a complimentary industry who needs to send out his/her own customer satisfaction survey. Ask if you can help him/her by doing the legwork yourself, in exchange for posing a few questions at the end of the survey.
Once you know you have a viable product or service the market demands, then you’ll want to test your idea on a small scale before you invest everything on a large scale.
Iron out any glitches that may be in your system before you grow exponentially.
Revise anything that may squander your profits, then launch the next phase of your business idea.
Look for next Tuesday’s Secrets to Success article for tips on bringing an innovative idea to market. In the meantime, think of how you can work smarter, not harder in your business or profession.
”The Coaches Challenge To You:”
What areas of your business can you focus on to bring you (and your team) increased results without doing more? It may take a little time to discover an answer to this question or it may come to you immediately, but I promise you one thing. You will discover new ways you can work smarter not harder by just thinking about it and asking yourself the daily question, “How can I work smarter in my business/profession today?”
”’Deborah Cole Micek, the chief executive officer of RPM Success Group, is a performance results coach and life strategist. Reach her at mailto:Deb@RPMsuccess.com or (808) 237-1008.”’
Racial Hypocrisy Editorial Confusing in Honolulu Advertiser
“Dick Rowland Image”
“GOP continues to gain from racial hypocrisy,” one of the editorials in the Honolulu Advertiser on Sunday 1/12/03 was confusing. First it claimed that Republicans are genuinely not racist and act and speak such but refuse to decry Deep South efforts to restore the Confederate flag. Bill Clinton is quoted as saying that such is a “strategy.” And, it is claimed that such “put Nixon, Reagan and both Bushes in the White House.” Does this mean the newspaper thinks the American voting public is gullible and stupid? If so, let’s take away their voting rights. Then only Mandarins like editorial writers would have the franchise. Is that what was meant?
Finally, speaking of racism, here are some facts straight from syndicated columnist Deroy Murdock, who happens to be Black and is a Senior Research Analyst with the Atlas Foundation:
Governor Bill Clinton was sued successfully by the NAACP (1989) for voting rights violations that minimized Black voting strength.
During his 12-year tenure, Gov. Clinton never approved a state-civil rights law. Arkansas observed Confederate Flag Day every year of the 12. He issued birthday proclamations honoring Confederate leaders Jefferson Davis and Robert E. Lee. He signed Act 116 in 1987, which reconfirmed that the star above the word “Arkansas” on the state flag is to commemorate the “Confederate States of America.”
Bill Clinton has lauded segregationists J. William Fulbright and Orval Faubus.
Then there is former Ku Klux Klan member Senator Robert Byrd (D-West Virginia) who along with Al Gore Sr and 19 other Democrats voted against the 1964 Civil Rights Act. Byrd also recently used the term “white nigger” on Fox News.
That’s just some of Murdock’s litany of Democrat abuses that somehow seldom get mentioned in the media.
The Advertiser editorial writer, when evaluating hypocrisy, should look in the mirror or do a bit more research.
”’Richard O. Rowland is president of the Grassroot Institute of Hawaii. He can be reached via email at mailto:grassroot@hawaii.rr.com or by phone at (808) 487-4959. More information about the Grassroot Institute of Hawaii can be found at its Web site at”’ https://www.grassrootinstitute.org
Postmodern Government Budgets
If President Bush’s bureaucracy were as capable as the bureaucracy in George Orwell’s great novel, Nineteen Eighty-Four, Lawrence Lindsey, the president’s former economic advisor, would have been airbrushed out of every photograph he appeared in while holding that post, and every reference to his estimate of the cost of the coming Iraq war would be wiped from every archive in the country. Today no one would know who Lawrence Lindsey is or that he once said that the war would cost $100 billion to $200 billion.
Alas, government is not quite as powerful as Orwell envisioned. So the Bush administration has to settle for simply firing Lindsey (or insisting he resign) and having the budget director dismiss and discredit Lindsey’s estimate and issue his own lower one.
Maybe that more transparent method will work just as well. After all, while $100 billion to $200 billion may strike some as a mite expensive for a war against a weak and toothless dictator, $50 billion to $60 billion is an absolute steal. It’s the Kmart blue-light special on wars. We can’t afford not to go to war.
Still, one has to chuckle at the way the administration has pulled this off. It’s not as far from Orwell as it looks at first sight. Through Orwellian “doublethink” people knew the past had been changed — they just didn’t acknowledge to themselves that they knew. Through Bushian “doublethink,” we all know that the economist whom Bush respected enough to make his chief economic advisor estimated an exorbitant cost for the war — but now we tell ourselves that he was wrong and had to go.
Did Budget Director Mitch Daniels, who presented the new, lower estimate, explain why his number is better than nonperson Lindsey’s? According to the New York Times, “Mr. Daniels declined to explain how budget officials had reached the $50 billion to $60 billion range for war costs, or why it was less in current dollars than the 43-day gulf war in 1991.”
In other words, trust us. Daniels’s estimate must be better than the
nonperson Lindsey’s because
Budget and Finance Director Gives Highlights of State Financial Plan-Before State House Committee on Finance, Jan. 14, 2003
Mr. Chairman and Members of the Committee: I want to start by thanking all of you for your patience and understanding in allowing us the opportunity to present a new financial plan. We have been working very hard with all departments to make revisions that will reflect both our administration’s focus on fiscal discipline as well as the need to stimulate the economy. One of our basic tasks was to balance the budget without using the Hurricane Relief Fund. We believe the Hurricane Relief Fund should be maintained in order to ensure that the people of Hawaii will be protected following the next hurricane, which everyone agrees is a certainty. We have to be sure that the state of Hawaii will not be hampered during recovery efforts and that insurance will be readily available to homeowners and businesses. Also, we believe that to restore trust in government, this obligation must be fulfilled and the intent of the fund must remain intact. To achieve our goals while fulfilling this obligation we implemented a freeze on filling nonessential vacancies and requested a 5 percent reduction of discretionary expenditures for the remainder of fiscal year 2003. Exemptions were allowed for debt service, fringe benefit costs, costs associated with the Felix consent decree, University of Hawaii and Department of Education instruction and school level support, public welfare, and funding for child and adult mental health costs. Following is the revised MultiYear General Fund Financial Plan, which is based on January 2003 Council on Revenue projections. Please view this as our preliminary proposal as many details are still being worked out with individual departments and this plan may change during the session. However, I feel this is a good starting point for both the Legislature and the general public to begin to understand how we will achieve our goals of restoring fiscal discipline while at the same time delivering a wide range of quality public services. These are highlights of the financial plan for the current fiscal year 2003: *A net increase (from the December 2002 financial plan) of $22.0 million in non-tax revenues from the Council on Revenue September 2002 estimates. *Projected revenues include FY 02 carryover balances of $134 million; $2.0 million to be transferred from the Bureau of Conveyance special fund; and $18.1 million from bond premium proceeds. *Projected expenditures include: $179.4 million for approved collective bargaining raises; a total of $23.5 million for legislative claims and other specific legislative appropriations made in prior sessions for FY 03; proposed emergency appropriations totaling $40.8 million; and expenditures of $2.9 million for special election and vacation payout costs. *Expenditures are reduced by $39.7 million from 5 percent restrictions on the discretionary operating budget ($35 million) and restrictions on specific appropriations ($4.7 million). *Other reductions to expenditures come from debt service savings (series CZ) of $8.3 million, and from annual statewide lapses of $55.0 million. *For the upcoming 2003-2005 biennium and years to follow, our budgetary focus is on maintaining fiscal discipline and strengthening the economy in order to generate recurring revenue sources to meet recurring expenses. *These are our revenue and expenditure assumptions for FB 200305 (FY 04 and FY 05): A net increase (from the December 2002 financial plan) of $15.1 million and $15.0 million in nontax revenues from the Council’s September 2002 estimates for FY 04 and FY 05, respectively. *Projected revenues include $200,000 in FY 04 and $6.8 million in FY 05 for additional reimbursements to the Retirement System; $33.7 million in special fund transfers to the general fund in FY 04; and $5.5 million in each fiscal year from the assessment of special funds for central service expenses. *To ensure financial accountability, we are initiating repeals of selected special funds that have outlived their purpose, or have no justifiable purpose. Any balances, if available, are to be transferred to the general fund. *To ensure equitable fiscal responsibility, we will propose subjecting most special and nongeneral funds to central service assessments, unless prohibited by federal laws. *Other revenue adjustments will include several tax initiatives to be introduced by Gov. Lingle in her State of the State Address. Specific details of those initiatives will be released next week. Estimated revenue impact will amount to approximately $30.0 million in FY 05. *Projected expenditures over the biennium assume departmental budget requests that are limited to “no growth” ceilings (excluding fixed costs, and nondiscretionary costs such as welfare, education, health, mental health, fringe benefits, etc.), and the continuation of spending restrictions which will result in savings of $35 million per year. *Projected increases to FY 04 and FY 05 ceilings are reduced by $17.5 million and $17.2 million, respectively. *Other reductions to expenditures come from reduced debt service requirements based on revised issuance plans ($0.8 million in FY 04 and $3.8 million in FY 05), and from projected annual statewide general fund lapses of $55.0 million in each fiscal year. *Over the planning period FY 06 through FY 09, our revenue assumptions include continuation of the impact of tax credits and central service assessments; and projected general fund nontax revenue increases through FY 09 (net increases from the December 2002 financial plan of $15.9 million, $16.5 million, $17.4 million, and $18.8 million in FY 06, FY 07, FY 08, and FY 09, respectively). *On the expense side, we will continue strict spending policies and review our debt issuance plan to reduce debt service costs. I would like to reiterate that these proposals are preliminary, and subject to adjustment or change, as circumstances warrant. Operationally, we have already administratively implemented efforts toward structural reform of state government programs. FY 03 restrictions of 5 percent were imposed, and departments were directed to base their upcoming biennium and outyear budgets on this adjusted funding level. In addition, by instituting a freeze on the filling of position vacancies in selected areas, we expect to minimize and control growth, in all but essential areas of government service. At the same time, we are also reducing current and future capital improvement project authorizations to reduce the cost of debt that must be accommodated within current and future budgets, and to ensure that such costly, longterm obligations will be expended only for high priority program areas. At this time, I would also like to discuss the following matters: Revenue estimates of the Council on Revenues as of September 2002, and January 2003. The status of the constitutionallymandated state aggregate general fund expenditure ceiling; and the status of the statutorilymandated general fund appropriation ceiling for the Executive Branch (as of December 2002). The status of the General Obligation Bond Fund Debt Limit (as of December 2002). The status of Constitutional Rebate/Credit requirements (as of December 2002). Summary information on the Executive Biennium Budget for FY 04 and FY 05 and General Fund Financial Plan as of December 2002 is attached for your information. Revenue Estimates of the Council on Revenues as of September 2002, and January 2003 The previous administration’s general fund financial plan for fiscal year 2003 and for the ensuing fiscal biennium 200305, were based on the constitutionallymandated Council on Revenue’s (Council) September 2002 revenue projections. On January 8, 2003, the Council retained its September 2002 general fund tax revenue growth rate forecast, which assumes that there will be no longterm major strikes, losses due to decreases in federal allocations, ill effects from a war in Iraq, unforeseen adjustments to tax laws, or other unanticipated occurrences. These latest revenue estimates must be considered when appropriating funds and enacting revenue measures. That forecast calls for continued growth in current fiscal year 2003 revenues with an anticipated increase in general fund tax revenues of 6.1 percent from the negative 3.5 percent base recorded for fiscal year 2002. As of the Council’s September 2002 forecast, and as reiterated by January 8, 2003 Council estimates, tax revenues were projected to increase from FY 03 to FY 04 by 5.7 percent, by 6.0 percent in FY 05, and by 5.1 percent, 5.2 percent, 5.0 percent, and 5.0 percent in fiscal years 2006, 2007, 2008, and 2009, respectively. While general fund tax revenue projections remained unchanged, nontax revenues which were not accounted for in the December 2002 Program and Financial Plan, General Fund Financial Plan are projected to increase from September 2002 estimates by $20.7 million in FY 03, $15.1 million in FY 04, $15.0 million in FY 05, and $15.9 million, $16.5 million, $17.4 million, and $18.8 million in FY 06, FY 07, FY 08, and FY 09, respectively. As required by statute, the following declarations on the general fund expenditure ceiling, the general obligation debt limit, and tax rebate requirements, are based on budget recommendations of the previous administration. New calculations will be submitted with recommendations of this administration, as warranted. The status of the constitutionallymandated state aggregate general fund expenditure ceiling; and the status of the statutorilymandated general fund appropriation ceiling for the Executive Branch. State aggregate general fund appropriations proposed as of December 2002, which included executive appropriations, requirements of the Judicial and Legislative branches, and the Office of Hawaiian Affairs, amount to $3,931.2 million for FY 03, $3,936.6 million for FY 04, and $4,069.4 million for FY 05, which are within the constitutionally mandated expenditure ceilings for FY 03, FY 04, and FY 05, respectively. Total recommendations included in the executive budget request of December 2002, have also been made in accordance with the appropriation ceiling for the Executive Branch pursuant to provisions of section 3792 of the Hawaii Revised Statutes. Funding proposed as of December 2002, for emergency program requirements in health and human services, and other state programs, will result in the appropriation ceiling for the Executive Branch to be exceeded in FY 03 by $52.9 million or 1.4 percent. Executive Branch appropriation ceilings for both FY 04 and FY 05 will not be exceeded … . The status of the constitutional general obligation debt limit. Pursuant to Section 13, Article VII of the Hawaii State Constitution, and based on the assumption that interest rates on proposed bond issuances will be issued at 6.0 percent, it has been determined that the principal and interest calculated on all bonds issued and outstanding, estimated for all bonds previously authorized and unissued, and on the bonds proposed as of December 2002, in the previous administration’s executive budget for the FB 200305, will not cause the debt limit to be exceeded at the time of each bond issuance … . The Status of the constitutional Rebate or Tax credit requirement. Section 6, Article VII of the State Constitution provides for a mandatory tax refund or credit if the general fund balances at the close of two successive fiscal years exceed 5 percent of general fund revenues for each of those two fiscal years. Although the general fund balance at the end of FY 01 exceeded 5 percent of general fund revenues, FY 02 fund balances as of December 2002, did not. Accordingly, the 2003 Legislature will not need to provide for a tax refund or tax credit for the 2003 tax year. The Executive Biennium Budget for FY 04 and FY 05 (as of December 2002) … . Total operating budget requests proposed as of December 2002 (including all means of funding), for the Executive Branch amounted to $7,463.3 million in FY 04 and $7,717.0 million in FY 05, for a total of $15,180.3 million over FB 200305. Proposed general fund operating appropriations for the biennium are $3,770.7 million for FY 04 and $3,904.5 million for FY 05. The proposed capital improvements budget for the Executive Branch as of December 2002, amounts to $964.5 million in FY 04 and $621.6 million in FY 05, for a total of $1,586.1 million over the biennium. Of this amount, $1,120.1 million was proposed to be funded over the two years of the biennium by general obligation bond funds, and $7.3 million to be funded by reimbursable general obligation bond funds. That concludes my presentation. During the course of the 2003 Session, departments will be providing specific information with regards to their individual programs and budgets. Should our planned financial outlook change, we will be sure to keep you informed. Likewise, should the Council on Revenues’ estimates for March change markedly from current estimates, we hope you will work with us to make appropriate adjustments. Again, I want to thank you for this opportunity to provide information on our revised financial plan and for your patience and understanding regarding the timing challenge that our new administration faced in preparing this plan.
Racial Hypocrisy Editorial Confusing in Honolulu Advertiser
Dick Rowland Image “GOP continues to gain from racial hypocrisy,” one of the editorials in the Honolulu Advertiser on Sunday 1/12/03 was confusing. First it claimed that Republicans are genuinely not racist and act and speak such but refuse to decry Deep South efforts to restore the Confederate flag. Bill Clinton is quoted as saying that such is a “strategy.” And, it is claimed that such “put Nixon, Reagan and both Bushes in the White House.” Does this mean the newspaper thinks the American voting public is gullible and stupid? If so, let’s take away their voting rights. Then only Mandarins like editorial writers would have the franchise. Is that what was meant? Finally, speaking of racism, here are some facts straight from syndicated columnist Deroy Murdock, who happens to be Black and is a Senior Research Analyst with the Atlas Foundation: Governor Bill Clinton was sued successfully by the NAACP (1989) for voting rights violations that minimized Black voting strength. During his 12-year tenure, Gov. Clinton never approved a state-civil rights law. Arkansas observed Confederate Flag Day every year of the 12. He issued birthday proclamations honoring Confederate leaders Jefferson Davis and Robert E. Lee. He signed Act 116 in 1987, which reconfirmed that the star above the word “Arkansas” on the state flag is to commemorate the “Confederate States of America.” Bill Clinton has lauded segregationists J. William Fulbright and Orval Faubus. Then there is former Ku Klux Klan member Senator Robert Byrd (D-West Virginia) who along with Al Gore Sr and 19 other Democrats voted against the 1964 Civil Rights Act. Byrd also recently used the term “white nigger” on Fox News. That’s just some of Murdock’s litany of Democrat abuses that somehow seldom get mentioned in the media. The Advertiser editorial writer, when evaluating hypocrisy, should look in the mirror or do a bit more research. ”Richard O. Rowland is president of the Grassroot Institute of Hawaii. He can be reached via email at mailto:grassroot@hawaii.rr.com or by phone at (808) 487-4959. More information about the Grassroot Institute of Hawaii can be found at its Web site at” https://www.grassrootinstitute.org
Postmodern Government Budgets
If President Bush’s bureaucracy were as capable as the bureaucracy in George Orwell’s great novel, Nineteen Eighty-Four, Lawrence Lindsey, the president’s former economic advisor, would have been airbrushed out of every photograph he appeared in while holding that post, and every reference to his estimate of the cost of the coming Iraq war would be wiped from every archive in the country. Today no one would know who Lawrence Lindsey is or that he once said that the war would cost $100 billion to $200 billion. Alas, government is not quite as powerful as Orwell envisioned. So the Bush administration has to settle for simply firing Lindsey (or insisting he resign) and having the budget director dismiss and discredit Lindsey’s estimate and issue his own lower one. Maybe that more transparent method will work just as well. After all, while $100 billion to $200 billion may strike some as a mite expensive for a war against a weak and toothless dictator, $50 billion to $60 billion is an absolute steal. It’s the Kmart blue-light special on wars. We can’t afford not to go to war. Still, one has to chuckle at the way the administration has pulled this off. It’s not as far from Orwell as it looks at first sight. Through Orwellian “doublethink” people knew the past had been changed — they just didn’t acknowledge to themselves that they knew. Through Bushian “doublethink,” we all know that the economist whom Bush respected enough to make his chief economic advisor estimated an exorbitant cost for the war — but now we tell ourselves that he was wrong and had to go. Did Budget Director Mitch Daniels, who presented the new, lower estimate, explain why his number is better than nonperson Lindsey’s? According to the New York Times, “Mr. Daniels declined to explain how budget officials had reached the $50 billion to $60 billion range for war costs, or why it was less in current dollars than the 43-day gulf war in 1991.” In other words, trust us. Daniels’s estimate must be better than the nonperson Lindsey’s because ? well, because Lindsey is a nonperson. Here’s how Daniels put it: “That wasn’t a budget estimate. It was more of a historical benchmark than any analysis of what a conflict today might entail.” My best translation of that is: Lindsey was delirious when he talked about the cost of war. There were other comforting aspects of post-Lindsey cost estimating. The money for the war won’t upset the 2004 budget, and it won’t be part of the 2003 $355 billion military budget (a record figure). Rather, it will be appropriated by Congress as an emergency expenditure. I sometimes wonder why the whole budget isn’t just labeled “emergency expenditure” so we can be done with all our fiscal problems. Only a curmudgeonly taxpaying tightwad would point out that the long-suffering productive classes will cough up the money no matter what the government calls it. The intellectual world a few years ago moved into what is called the postmodernist phase. That’s more or less the view that reality has no firm identity and that it is available for molding according to personal, class, or cultural interests. Thus we are told that even “male” and “female” are merely social constructs or conventions. But the intellectuals have nothing on the politicians and bureaucrats. Government has been in a postmodernist phase for many decades. This is most clear when it writes its budgets. Revenue and spending figures have one objective: to sell the program. When the medical socializers wanted to get Medicare passed, they issued cost estimates that we now know were ludicrous. According to Medicare historian Sue Blevins, in 1965 the government said the hospital part of the program would cost $9 billion in 1990. What it really cost was $66 billion. Adjusted for inflation, the estimate was off by 165 percent. Not bad for government work. The point is, the government budget is not an honest estimate of uncertain future costs. It’s a political document designed to advance an agenda. It is inherently dishonest. Anyone want to bet on whether Lindsey or Daniels has the better estimate on the cost of the war? ”Sheldon Richman is senior fellow at The Future of Freedom Foundation in Fairfax, Va., editor of Ideas on Liberty magazine and author of Tethered Citizens: Time to Repeal the Welfare State. See the Foundation’s Web site at:” https://www.fff.org