For Legislature, it’s
crunch time on economy
Some say lawmakers are in
'controlled desperation,' but others
are optimisticAnalysis
By Mike Yuen
Star-BulletinApprehension and anxiety permeate the state Capitol as the Legislature today begins a crucial week for advancing bills.
With less than a month remaining to complete their work, lawmakers are far from reaching a consensus on how to get Hawaii's anemic economy back on track. Some, like Senate Majority Co-Leader Mike McCartney (D, Kaneohe), believe a plan will come together in the end, but they acknowledge that a dark mood now pervades the Capitol.
"It's jittery," concedes Les Ihara Jr. (D, Kaimuki), who's also Senate majority co-leader.
John Radcliffe, the lobbyist for the University of Hawaii faculty union, has a gloomier perspective. "It's controlled desperation," he says.
Radcliffe and other veteran Capitol observers -- and even lawmakers themselves -- concur that there is a tremendous sense of urgency for the Democratic-controlled Legislature to move initiatives to strengthen the economy.
"Failure to come up with a unified plan will impinge on quite a number of elections, including the governor's," Radcliffe says.
There are now five economy-boosting proposals circulating in the Capitol. Among them are Gov. Ben Cayetano's Economic Revitalization Task Force initiatives, which are closely mirrored in House bills. The initiatives include the much-criticized proposal to raise the general excise tax, which is part of a plan to lower personal income taxes and prevent deep cuts to government services.
House Republicans, the Senate's Democratic majority and a coalition of Senate Republicans and dissident Senate Democrats have all put forward plans that don't call for increasing the state's 4 percent excise tax.
All sides don't dispute what Cayetano's task force is seeking to accomplish: restructure the tax system to ease the burden on isle taxpayers and to strengthen the competitive position of the state's No. 1 indus-try, tourism. But there has been much disagreement over whether to increase the excise tax. The House, for example, managed -- by only a three-vote margin -- to send to the Senate a bill that would hike the tax a mere 0.5 percent.
Proponents of the task force's initiatives, including the tax increase, were to stage a rally this afternoon at the Capitol.
The demonstration's supporters include Hawaii's two leading banks, the Sheraton and Outrigger hotel chains, public-workers unions, Carpenters Union Local 745, the Building and Construction Trades Council, Hidano Construction Inc., Alexander & Baldwin Inc., Theo H. Davies & Co. Ltd. and the law firm of Carlsmith Ball Wichman Case & Ichiki, organizers said. The rally is expected to draw 3,000 people.
Voicing what is expected to be one of the rally's key themes, Garen Deweese, the lobbyist for the Hawaii Government Employees Association union, said: "We don't want essential services hit hard by budget cuts. An increase in the general excise will mean a continuation of those services."
Deweese wants lawmakers to consider the task force's original proposal to raise the excise tax to 5.35 percent. That would mean an additional daily tax burden of only 37 cents a day if an isle resident spends $10,000 annually, he said.
Deweese and Danielle Lum, a spokeswoman for the Hawaii State Teachers Association, said their unions would rather see an excise tax hike imposed than to have government workers' salaries slashed, as the Senate has proposed.
The rally backing the task force's initiatives comes at a time when task force proponents acknowledge that they have been losing the public relations -- or, as they put it, "the public education" -- battle to people such as Sen. Sam Slom (R, Kalama Valley), who believes an increase in the excise tax could push struggling small businesses into closure.
"Right now," says House Majority Leader Tom Okamura (D, Aiea), "people think the tax reform package is just a tax increase when, in fact, it isn't. It'll be the largest tax cut in the history of Hawaii. But the general public doesn't know that."
House leaders have met with the editorial boards of Honolulu's daily newspapers and called a press conference to tout their economic relief plan. It may be unpopular and controversial, but it seeks to resolve the key problems confronting the state, they say.
Many House members and dissident senators doubt that the Senate's Democratic majority has a plan.
But Senate President Norman Mizuguchi (D, Aiea) insists the Senate is on schedule in formulating its economic blueprint. "Just having the Democratic-controlled Legislature talking about specific cuts to government that affect employees is, I think, a change in attitude," Mizuguchi asserts.
The Senate has until Thursday to unveil its version of the budget, which will reveal what programs it would cut.
House Hawaiian Affairs Chairman Ed Case (D, Manoa) says he doesn't feel the sense of panic that many of his colleagues share. Rather, he feels a mandate from the public to make government more efficient by reducing its size and expenses -- without a tax increase. The mandate also includes challenging long-held assumptions about government generosity regarding workers' salaries and benefits, Case says.
"What I feel -- and this is the real question -- is whether the Legislature has the guts and ability to deliver that change," Case adds. "The public has expectations. Can we meet those expectations?
"Every person knows that the extrapolation of the status quo is going to be difficult to maintain."
LEGISLATURE UPDATE
A calendar of tomorrow's hearings -- to be held at the state Capitol, 415 S. Beretania St., unless noted:
HOUSE
Water and Land Use: Hearing on resolution requesting feasibility study on transferring forestry programs to the Department of Agriculture. Decision-making to follow. Decision-making on bill relating to conservation and resources and Barbers Point Harbor, 9 a.m., Room 312.
SENATE
CONFERENCE
