Talk Story
Cayetano vs.
the Legislature:
A $500 million
misunderstandingBEN Cayetano thinks history will treat his administration kindly. However, he admits with disappointment that it's likely his most memorable achievement will be A-Plus, a program he pushed through before becoming governor.
"There doesn't seem to be any kind of a cohesive economic stimulus plan downstairs," a frustrated governor told Star-Bulletin editors and reporters last week in his offices atop the Capitol. "You folks know what our plan was -- basically to stimulate the economy through a massive capital improvement program (CIP) designed primarily to improve the educational infrastructure, schools and the university."
A public works program is still the best way to jumpstart the economy, Cayetano insists.
"You know, when 9/11 hit, the economies of 45 or 44 states went down the tubes," he said. "The California Chamber of Commerce came right out and proposed a $10 billion capital improvement project to improve the schools, build affordable housing ... Now, the California Legislature is doing one better. They are proposing a $25 billion capital improvement program."
THERE ARE 34 million Californians, so that would be $735 per capita.
What's Hawaii doing? "We are looking at, from the last I heard, about a $400 million CIP package this time around," Cayetano said and shrugged in disbelief.
Hawaii has 1.2 million people, so that comes to $333 a head.
"We are never going to catch up. We have a $600 million repair and maintenance backlog that's increasing by $51 million a year. We should take a big jump and invest, worry less about debt service and look to improving our education system," he said.
"I'm not sure what these people downstairs are thinking about," Cayetano said.
"The people in our leadership don't understand the CIP process. I've heard the speaker and others say, 'We gave the governor $500 million or $600 million for the biennium and he hasn't released the money,'" he said.
They don't understand, he said, that "the capital improvement process is done in stages. There's no way that California is going to spend that $25 billion in a year. But they're going to be able to put a lot of money into the pipeline."
HE STOOD to write on a marker board. "Suppose they gave me $100 million for one project. In six months, we'd probably be able to do $6 million (for bidding, planning and design). If you add $1 billion, you're talking about $60 million. It's that simple. Those guys don't get it."
Cayetano's frustration was written all over his face. "So they give me, say, $400 million and they say, 'Well, he can't spend it all.' Of course we can't spend it all!"
He continued, "In six months, given this ($400 million) example, I could spend maybe $24 million. But if I had a billion, then I'd be able to spend more during that six months and that's the point of our asking for so much money for CIP."
Hawaii governors are very powerful compared to others, but Ben feels handcuffed.
"If you don't have an appropriation you can't start," he said. "So, if you have a $600 million backlog and they give you $300 million this time around, we can identify projects and we can begin to move.
"But what about the other $300-something million? I can't do anything about it. No governor can do anything about it until there's a Legislative session, until the budget is passed. ... You can't entertain bids, you can't even design anything.
"That's what they've been unable to grasp, you know? The guys who are in leadership should understand this."
Cayetano wants to take advantage of low interest rates to fund construction. The Legislature's on another tack. "I've been told that they would rather offer tax credits," he said. The idea is for the private sector to fund construction so the state would not have to go into debt.
"That's sort of a fallacy because ... tax credits mean you're going to get less money for revenue," the governor said. "To me, it's better to fix the schools and fix the university, our hospitals, our parks. I should be in there asking for $2 billion -- $2 billion instead of $1 billion!
"OK?"
John Flanagan is the Star-Bulletin's contributing editor.
He can be reached at: jflanagan@starbulletin.com.