Combining departments
could mean layoffs
He says unless the economy improves
By Craig Gima
quickly, the layoffs or furloughs
may come within two years
Star-BulletinGov. Ben Cayetano's call to consolidate several state departments could bring layoffs -- but with an already-lean state government, the biggest results will be in efficiency, not cost savings. "We've been cut so much over the last three years that I think we're pretty trim already," Cayetano said at a news conference after his State of the State address.
"I think when we're looking with consolidation it's basically a little more efficient; if you make it more efficient, you don't have to hire more people."
Cayetano is proposing to combine three departments -- Accounting and General Services, Human Resources, and Budget and Finance -- into two departments.
He is also proposing a consolidation of some business development and regulation functions, which he said are now spread over three departments.
Seiji Naya, director of the Department of Business, Economic Development and Tourism, said he believes his department is streamlined already and would not need to lay off any workers if functions are consolidated.
He said any reductions would come from not filling vacant postions and from attrition.
Cayetano said he does not expect any layoffs in the state Harbors Division if he is able to create a Hawaii Maritime Authority by consolidating the Department of Transportation's Harbors Division, the Hawaii Community Development Authority, the Aloha Tower Development Corporation and the state Small Boat Harbor program into a quasi-public body.
He said those positions may become special-funded, not general-funded, jobs because the authority would be drawing on different financing mechanisms.
At his press conference, Cayetano also confirmed he may eliminate the state Office of Information Practices, which issues opinions on what state information should be released to the public.
"Whether we are actually going to close it or just reduce staffing is a matter that's still under discussion. What's important to me when I make a decision about that office is some assurance that the attorney general's office, for example, will be able to service the request of the public," he said.
Unless the state economy turns around or government becomes more efficient, Cayetano said, layoffs or state worker furloughs will become a necessity in the next two years.
"I'm opposed to furloughs," he said. "I'd rather take the bull by the horns, and if we need to make some kind of vertical cut, then we make it," he said.
"We're not in favor of layoffs," said Keith Ahue, deputy director of the Hawaii Government Employees Association.
But, Ahue said, "if layoffs are necessary, then we'll just have to make sure the workers' rights under the contract are protected."
Fiatele Bell, a custodian at Dole Intermediate School and state employee of the year, was cited by Cayetano during his address as a state worker who is doing more with less.
"I hate to see people laid off their jobs," she said after the speech.
But she said if layoffs are the only way the state can survive, she would support the governor.
Tax package has room
By Mike Yuen
for revisions, governor says
Star-BulletinIf critics manage to derail the proposed 34 percent increase in the general excise tax, don't be surprised if another element in his economic revitalization package dies, Gov. Ben Cayetano says. That initiative -- to substantially reduce the "pyramiding" of the excise tax -- is seen as a boon for small businesses.
"I think if there's any part of the (economic revitalization task force's) tax package that is most likely to fall by the wayside, it may be the provision for (virtually eliminating) pyramiding, which nobody seems to understand. That's about $158 million, and if that falls by the wayside, maybe you don't need to increase the general excise tax by as much," Cayetano said.
Cayetano's remarks yesterday came after his State of the State address, in which he championed the task force's proposals as the panacea to the state's economic ills.
The excise tax is considered a pyramiding tax, because it is assessed on virtually every transaction in the state. It is levied at every level of production, distribution and sale.
The task force's proposal is to reduce the 4 percent excise tax "pyramiding" on services to 0.5 percent, the same level for goods.
By the administration's calculations, raising the general excise tax from 4 percent to 5.35 percent would generate an additional $260 million annually, with tourists paying an estimated 20 percent.
"Unless the legislature decides not to pass any tax reform at all, I believe the tax package has a chance to emerge. Maybe not in the kind of numbers we're talking about, but I think those numbers can be adjusted," Cayetano said.
In separate interviews, House Finance Chairman Calvin Say (D, Palolo) and Senate Ways and Means Co-
Chairwoman Rosalyn Baker (D, Lahaina) said they would be open to abandoning the anti-pyramiding measure if the excise tax hike was also off the table. But, Baker added, "I suspect there are other alternative proposals out there. We need to look at all of them."
Reductions in personal and corporate income tax and in the state's franchise tax, which is applied to banks, for instance, could also be jeopardized if the excise tax hike is blocked, Say said.
Sen. Sam Slom (R, Kalama Valley), who like his fellow Republican legislators is vehemently opposed to an excise tax increase, said Cayetano "must be listening to the people, who do not want a tax increase."
He added: "Unfortunately, I think it's a political thing here. You can't tell where the task force ends and where the governor's re-election committee begins, because the two are tied absolutely together."
Star-Bulletin writer Keith Kosaki contributed to this report.
Officials agree: Kau prison
By Pat Omandam
will work well if done right
Star-BulletinBig Island resident Leina'ala Enos may be impartial to a new state prison in Kau, but she knows many others who aren't. As an outreach counselor for the Kau office of the Queen Liliuokalani Children's Center, Enos knows first-hand how new jobs created by the prison can lift the spirits of the area's unemployed.
But she's also aware of the lasting impact the 2,300-bed facility will have on the quiet, remote community where everyone knows your name. All she wants is state officials to solicit input on the project from those whose lives they are affecting.
"Hopefully, everyone is honest and above board, and everyone puts information out on the table for us to look at in the community," Enos said yesterday from Kau.
Gov. Ben Cayetano, after his State of the State remarks yesterday, said he hopes to send out bids for the project within a month, with the first shovel of Big Island soil to be dug for the privately built prison by year's end.
In his statewide message, Cayetano proposed the prison be built with private funds and possibly managed by a private firm, a move he estimates could save the state $23 million a year.
He said the project would boost the Big Island's lagging economy by creating hundreds of construction jobs.
More prison space is essential, said Honolulu Mayor Jeremy Harris.
"If we're going to solve our crime problem, we have to add more bed space," Harris said.
"And with (Cayetano's) support, I think now we're going to be able to convince the Legislature to move ahead with that as well."
Although most in the Legislature welcome the proposal, those in the minority see it as faulty state leadership.
"The only thing that bothers me is: When they said private enterprise would build it and there's a possibility that they would run it, it should have been a definite 'we have done a lousy job of running our prisons,'" said Senate Minority Leader Whitney T. Anderson.
State Prisons Director Keith Kaneshiro said the 2,300 beds are needed now because programs that offer alternatives to incarceration -- such as the Drug Court -- can't work if convicts know there is no prison space.
"You cannot just have alternatives to incarceration, you have to have the prison beds," he said.
Kaneshiro agreed with Cayetano that Kau is a good choice for the prison because of its location, the abundance of state land and because the community -- unlike residents of Oahu -- wants it there. About 800 Kau residents signed a petition last year asking the facility be built in their hometown.
Kaneshiro, however, doesn't know yet whether the prison will use public workers or private employees, and he is at least two years away from that decision.
United Public Works leader Gary Rodrigues yesterday said the union has discussed the possibility of a new prison with state officials and sees no problems if it is privately operated but staffed with public workers.
Meanwhile, Kaneshiro said he is not "warehousing" people by demanding more prison beds. Instead, more space will mean more programs, just like those now offered to Hawaii inmates housed in Texas prisons.
"Getting more space with a new prison, we're able to work up more rehabilitation programs so when the inmates are released, they will be rehabilitated," he said.
