BY MALIA HILL – Even the biggest panderers to unions and state employees can’t deny that the state pension system is on the verge of crisis. But enough about Governor Neil Abercrombie. Let’s talk about Senator Sam Slom for a moment.
Senator Slom’s reaction to the Governor’s State of the State address pinpoints just how inadequate the response is to Hawaii’s growing economic woes. Slom writes:
Governor Abercrombie outlined the seriousness of the under funded State Employees Retirement System (ERS) and Employees Union Trust Fund (the health care fund) and said ERS would have to be modernized and certain subsidized benefit payments, notably Medicaid B amounts, would be eliminated.
He then outlined some specific revenue proposals.
They included:
• repeal the tax deduction for state taxes paid
• tax pensions of retirees
• increase the tax on alcoholic beverages
• add a new tax on soda to combat obesity
• tax time share impact fees same as the hotel room tax
• redistribute and redirect part of the TAT used for visitor industry marketing for operating expenses and the environment.
See a common thread here?
The Governor did say that collective bargaining for public employees should reflect a 5% reduction, in exchange for furlough days, but that is subject to union negotiation. He also called for “scale back in social services that are unfunded.”
His discussion of, “New Day Work Projects,” focused on more public jobs, not improving the private sector business climate. He did not predict a good future for Aloha Stadium, and said that current vacant government buildings should be restored, green-fitted, and used by government.
My solution? Sell the government buildings and let the private sector use their own development money. Finally, he extolled rail and called for fast tracking to ease requirements for Transit Oriented Development (TOD) to make Oahu even more densely populated.
Small business, the backbone of Hawaii’s economy, was given short shrift; the permit process would be eased. Technology increased. How many decades now have we heard that promise? But nothing about easing the tax, regulatory and employer mandate burden on small business.
There wasn’t a word about seriously cutting back on government growth, right sizing, or keeping expenditures in line with the taxpayers’ ability to pay.
Governor Abercrombie then told us, “the challenge is not to balance the budget…” and, “the time for political debate is over.” Really? My belief is that this is exactly the time for debate over the reasonableness of these proposals.
It’s ironic that the Governor specifically dismisses balancing the budget, as the state has been the subject of criticism from citizen watchdog and transparency groups for failing to meet the balanced budget requirements. The source of that imbalance? Unfunded pension and state employee benefit funds.
As Slom makes clear, there are other alternatives to the endless taxation schemes that seem to pour forth from the capitol building–cutting spending, creating a more favorable business climate, and reforming state employee pensions and benefit plans would be a good place to start. (And a quick look at HawaiiSunshine.org can give you a good idea of how the government spends your money.) But if we don’t want to see our tax burden creep even higher, we’re going to have to make the legislature understand that we non-union folk have some power too. (And by the way, taxing our sodas? If loving a can of strawberry-flavored Diamond Head soda is wrong, then I don’t want to be right.)