Editorials
Wednesday, July 31, 1996
Cayetano rates better grade
on fiscal policy
AFTER devoting much effort since taking office to cutting the state's budget, Governor Cayetano can't be pleased to learn that he received a grade of D from the Cato Institute in its fiscal policy report on the nation's governors. The study gave the governors who cut spending and taxes the most the highest grades.
The Cato Institute, a libertarian think tank that espouses the doctrine of the less government the better, credited Cayetano with what it called "very modest budget restraints" in the face of "fierce opposition." But it said the Hawaii governor "does not seem to understand that holding the line is not enough to generate growth in a state that has suffered the nation's fourth most anemic income gains in the 1990s."
We think Cayetano deserves a higher grade - a strong B - for his handling of fiscal problems. Although elected as the candidate of the traditionally big-spending, pro-government union Democrats, he did not hesitate to wield the budget axe rather than raise taxes. The only exception was the elimination of several tax credits, in effect a tax hike.
The study notes that Cayetano cut $530 million from the 1996 budget by laying off 2,700 state employees - the first such act in state history. That took courage, considering that the government employee unions had endorsed him; it deserves a better grade than D!
Cutting state income taxes, as the Cato Institute urges, is not a realistic prospect in Hawaii, although we agree it might help attract new business. The business community has instead focused on the need to reduce workers' compensation rates, which are among the highest in the country and a heavy burden for employers. Cayetano has made some efforts in this area but more are needed - although they are certain to be opposed by the unions.
Inheriting a big budget shortfall gave the governor an opportunity to do some modest streamlining of the state government that he may have wanted to do in any case. Cayetano has expressed a desire to cut waste and make government more efficient. To his credit, he even seems open to considering privatization of government operations, although getting the union-dominated Legislature to go along may be impossible.
But it's difficult to imagine this or any other Democratic governor lowering taxes or spending less than revenues permit. In the political context of Hawaii, Cayetano has done well in cutting spending and resisting calls from other Democrats to raise taxes, even on upper-income residents. The Cato Institute should revise his grade upward.
Cleaning the Ala Wai
EXCEPT for the Natatorium, there is no greater disgrace in Waikiki than the Ala Wai Canal, which has become a filthy sewer. The state has released $69,500 as its share of funds to conduct an environmental assessment of the canal. It's the first step toward cleaning and dredging the Ala Wai.
With the state convention center nearing completion on the Ewa bank of the canal, it's even more important to restore the Ala Wai to relative cleanliness. It can't happen soon enough.
Filipino war veterans
CONGRESS has passed a resolution honoring Filipino veterans "for their defense of democratic ideals and their important contribution to the outcome of World War II." In 1989 Congress authorized the granting of citizenship to Filipinos who served with U.S. armed forces or in the guerrillas during the war. An earlier naturalization law had expired in 1946. Several thousand Filipino veterans came to Hawaii to obtain U.S. citizenship under the new law and many of them have remained here since. Their appeals for veterans' benefits have gone unheeded. The resolution passed by Congress is some consolation, but not much.
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