Spending curbs are no obstacle
Everyone at the state Capitol is waiting. The Council of Revenues meets Wednesday to say how much money there is to spend. It is the biggest decision of the session.
In many ways, the state's official budget is shaped around three ideas put in the state Constitution in 1978. For those not sure about whether to hold another convention, it might be time to consider whether those ideas still work.
Thirty years ago Hawaii's economy roared. Housing prices soared and it seemed there was always money to expand. Delegates to the state Constitutional Convention tossed in three ideas to tighten government spending.
First, there was a call for a limit to how much the state could spend -- an expenditure ceiling; second, in times of budget surplus the Legislature was to give tax rebates to stop the state from taking even more money. And third, to make sure the state administration and Legislature were counting the same pile of money, a Council of Revenues was created with authority to say how much money was available.
This week, the council meets and all are predicting that the state's growth rate will go down from the existing 4.9 percent. Every 1 percent up or down equates to about $45 million, according to legislative analysts.
Knowledgeable observers such as former Gov. Ben Cayetano, who doesn't support another Constitutional Convention, says that if they do meet, they should rethink some of those economic provisions.
Cayetano likes dropping the tax rebate idea because "it only forces spending for the sake of spending down the surplus. The surplus should go into the rainy day fund."
During that convention in 1978, former Gov. John Waihee was then starting in politics as a delegate. He argued for giving "the Legislature the flexibility to decide, first of all, what and how much of the excess should be used for taxpayers."
This year, because of the state Constitution, the Legislature must offer a tax rebate. It is going to be a token $1 and might only go to selected low-income groups, but it won't do anyone any good, although it will wind up costing the state more than $1 million.
The tax rebate has not really done its job of curbing state spending in times of surplus because more and more of the surplus is tucked into special funds, as Lowell Kalapa, president of the Hawaii Tax Foundation has said for years.
Finally, remember that expenditure ceiling?
During the convention, delegate Paul DiBianco called the ceiling "meaningless language." That's how the Legislature has treated the ceiling, as it obeys the law and states whenever it goes through the ceiling, and then zooms past it.
It may not be catchy, but fiscal reality might be another selling point for the ConCon vote when the question goes before voters in November.