Hawaii is by no means alone as a state that faces budget deficits now because of government spending habits developed years earlier, according to a new study by the National Federation of Independent Business. Hawaii deficits
have companyStudy says per capita spending
has grown faster elsewhereBy Russ Lynch
rlynch@starbulletin.comThe study showed that Hawaii government spending per head of population rose 43.5 percent, comparing fiscal years 1999 and 2000 with the average of fiscal years 1985 and 1986.
Per capita spending by some other states rose at a much higher rate during the same period. Connecticut was up 71.7 percent and Mississippi was up 66.9 percent, for example. A total of 24 states had higher spending increases than Hawaii from the mid-1980s through the 1990s, NFIB said.
But all the rest scored lower and Wyoming increased its per-capita spending only 3 percent through the 15-year period, NFIB said.
"That Hawaii was not as bad as some other states is no consolation," said Bette Tatum, director of the Hawaii chapter of NFIB, a small-business advocacy group. "Small businesses in particular had warned that increasing the size of the state government in boom times would lead to sustainability problems in bust times," Tatum said.
Paul Brewbaker, chief economist at the Bank of Hawaii, cautioned against comparing Hawaii state government spending with that of other states, where most of the cost of education is handled by local governments and does not show in the state government total. In Hawaii, education is a state government expense.
And he said that to some extent, government spending increases in boom times were justified by increased revenues. Figures that would be more important would be government debt and per capita indebtedness, Brewbaker said. Those are not covered by the NFIB report.
The study's author, William A. Dennis Jr., senior research fellow at the NFIB Research Foundation, said that for more than 15 years "states ran up expenditures with minimum regard for the long-term consequences." Spending by states was relatively stable in the late 1970s through the mid-1980s. Then "there was a take-off and rising spending through 2000," Dennis said.
Details of the study can be viewed on the Internet at www.nfib.com, under "Research Foundation" at the lower right of the home page. Under "Publications," the report is listed as "Laissez Les Bon Temps Roulez," a grammatically incorrect version of "Laissez Les Bon Temps Rouler," French for "Let the Good Times Roll."