Health programs
take heavy hit

A House budget proposal eliminates 17
state programs and cuts 129 jobs

By Craig Gima
Star-Bulletin

As he reviews the supplemental state budget expected to pass the House today, Health Chairman Alex Santiago (D, Pupukea) sees what he calls the dismantling of the health state.

"The fabric, the safety net they talk about, it's got huge tears in it," Santiago said.

The budget has $229 million dollars in cuts, according to House Finance Chairman Calvin Say (D, Palolo).

Many of the cuts fall in the Department of Health.

"Seven programs completely eliminated from the Department of Health," Santiago said. "Warm bodies gone, a lot of them. We're talking across-the-board massive cuts."

Altogether, the House budget eliminates 17 state programs and will cost at least 129 state workers their jobs.

It also saves $70 million and minimizes the need for further layoffs by not funding scheduled pay raises for state workers.

"A $200 million cut is a tremendous amount," Say said. "I'm dealing with personnel. I'm dealing with collective bargaining being suspended. I'm dealing with warm bodies. I'm dealing with the abolishment of the 700 vacant positions."

The budget also accounts for the cost of a proposed 25 percent to 35 percent income tax reduction over three years and an increase in the general excise tax from 4 percent to 4.5 percent to pay for part of the tax cut.

Santiago is hopeful that as the budget moves through the Senate, some of the cut programs will be restored.

But he realizes that will be difficult if the state cuts taxes to stimulate the economy.

"I certainly don't want to raise the general excise tax," he said. "But if there is such a huge unprecedented reduction in the income taxes, you can't have it both ways. You can't just cut and not somehow find revenues to deal with the essential services that are being cut."

House Democratic leaders feel the excise tax increase is needed to fund essential government services while providing a greater personal income tax cut.

Santiago feels the message is not getting out.

"We've got to do a better job of educating our members as well as general public," said Rep. Marcus Oshiro (D, Wahiawa).

Oshiro said a poll taken by the Economic Revitalization Task Force shows people will support the tax increase if it is explained that it is part of a larger personal income tax cut.

Ralph Kam, who is with a coalition against the excise tax increase, is trying to give a different message.

He spent the noon hour yesterday passing out petitions to against the excise tax increase to small businesses downtown.

At Transworld International Travel on Alakea Street, owner Nannette Au took the petitions.

"We're getting killed by taxes, period." she said.

But when told the general excise tax increase is part of a larger personal income tax cut, she said she might support the tax increase. "I gotta ask my accountant," Au said.

But at the Nearby Pacific Jade House, owner Joe Chan didn't think he could support an excise tax increase even if there would be a greater personal income tax cut.

"I don't think its a good idea anytime to raise taxes," Chan said.

Opinions were also mixed among the lunchtime crowd at Tamarind Park.

"I would accept it if personal taxes went down and if business taxes went down," said dentist Daryl Yokochi.

"I think cutting personal income tax is great but the (tax increase) is robbing Peter to pay Paul," said technician Michael Meyer.

Lisa Yoshikawa, an administrative assistant, said she is wary of what lawmakers are promising.

"When I see the personal income tax cut, then they can think about raising the GET," she said.

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Legislature supports
more independent UH

By Pat Omandam
Star-Bulletin

While a plan to hike the state general excise tax has hit rough water, another recommendation by the Economic Revitalization Task Force has found smooth sailing at the state Capitol.

Both the Senate and the House this week passed similar bills that give the University of Hawaii greater autonomy in its operations, clearing the way for those at Bachman Hall to lure intellectual capital to Hawaii and stimulate the economy.

"The major points are basically the same.... I think the discussion will surround the differences, which in this case aren't that great," said Eugene Imai, UH senior vice president for administration.

Imai yesterday said provisions in Senate Bill 2207, SD 2, and House Bill 2560, HD 2, reflect much of what the Board of Regents and the governor has proposed for autonomy.

One key component, which UH President Kenneth P. Mortimer has publicly advocated since last fall, is allowing the board to retain attorneys independent of the state attorney general's office.

That plan would allow regents to contract attorneys to represent UH in civil actions, help ensure lawful and efficient administration, review all documents relating to land purchases and interests, as well as provide other legal services as directed by regents.

In testimony last Thursday, Deputy Attorney General Charleen Aina told lawmakers her office supports the Senate version, even though it had misgivings about "unbundling" the system of centralized legal services the office uses to handle the state's legal affairs.

Even so, Imai said one of the next challenges for UH, if autonomy passes, is to find a way to pay for legal representation, which could total $1 million.

"Where's the money?" he said.

"It's one thing to get the authorization. It's another thing to be able to do it."

Both bills indemnify institutions that work with UH from claims arising against them for gross negligence or willful misconduct.

Such claims would be paid by the university and not the state, with regents authorized to obtain loss insurance to cover any liability.

Another vital provision in the measures would set the UH general-fund appropriation between three to five times the amount of regular tuition and fees generated that fiscal year.

For instance, the $60 million in UH tuition revenue raised this fiscal year would have meant a guaranteed general-fund budget of between $180 million and $300 million.

The university's current general-fund budget is $272 million, but it faces a 5 percent, or $13.5 million, budget cut this session, Imai said.

House Higher Education Chairman David Morihara (D, Puunene-Kula, Maui) said his panel will likely hear the Senate bill in the next two weeks.

In the meantime, he said, both chambers are expected to introduce resolutions to follow up on the UH autonomy measures.

"We're certainly willing to give the UH more autonomy," he said.

With more autonomy, Morihara said, there will be more pressure on the regents regarding policy decisions.

That, in turn, will mean a greater role for the yet-to-be-named student regent Gov. Ben Cayetano must appoint as the board's 12th member.

Greater autonomy
for the university

The University of Hawaii would be granted these key powers, under Senate and House bills moving this session:

Hire its own attorneys.

Set the UH general-fund budget to between three to five times the tuition revenue it raises.

Consolidate more than a dozen special funds for three or four accounts for more effective investments, funding areas ranging from UH transportation, laboratory animal services to facilities repair, maintenance and equipment.

Contract services of the Research Corporation of UH for research and training support not available at UH or other state agencies.

Fully participate in the Western Governors University, a virtual university planned by several Western states.

Relabel UH vehicles with the official UH logo or seal, or both, in lieu of the state seal.

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Capitol Roundup

A calendar of tomorrow's hearings -- to be held at the state Capitol, 415 S. Beretania St., unless noted:

HOUSE

None scheduled.

SENATE

Economic Development: Hearing on gubernatorial nominees Jack Endo and Randolph G. Moore to the Barbers Point Naval Air Station Redevelopment Commission, and resolution requesting a major league sports franchise. Decision-making to follow if time permits, 1 p.m., Room 212.