Tuesday, January 26, 1999

Gov. Cayetano’s State
of the State address

Full text of the address
IN his State of the State address yesterday, Governor Cayetano talked about civil service reform, streamlining state rules and regulations and strengthening education before getting down to the nitty-gritty of taxes. But the governor's tax proposals may dominate the legislative agenda in the current session as they did last year's. The stagnant economy is still foremost in the minds of legislators as well as the public.

As he announced previously, Cayetano abandoned his rejected 1998 proposal to increase the general excise tax to offset an income tax cut. But he proposed another reduction in the personal income tax on top of last year's, despite House Speaker Calvin Say's skepticism that the state could afford it. The governor did modify the proposal by saying the reduction would not be made unless state revenues reached a prescribed level, which could provide a basis for agreement.

Indeed, the question about all of his tax proposals is not whether they are meritorious but whether the state can afford them. Cayetano is more optimistic than some legislators on that score. His proposal to grant a double deduction for employer costs for prepaid health-care insurance has the laudable aim of encouraging more full-time employment, but what would it cost the state?

His other tax cut proposals are familiar, but it was disappointing that no mention was made of ending the pyramiding of the general excise tax, perhaps the best way to help business.

Cayetano opened the address by declaring the state's civil service system obsolete and announcing that he was forming a task force to reform it. He also proclaimed a goal of reducing state rules and regulations by 40 percent. Both of these proposals are highly worthwhile attempts to make state government more flexible, responsive and efficient, although they are not at the top of the public's agenda.

Cayetano then proceeded to talk about performance goals for the public schools, which would seem to be the province of the elected Board of Education, not the governor. He wants to revise the code of school discipline and have the community colleges provide technical education for high school students. He proposes to move the University of Hawaii Astronomy Department from Manoa to Hilo.

These are sound ideas but the governor may step on some bureaucratic toes in getting them implemented.

The governor would establish a pilot program for "new century schools" at the yet-to-be-built Kapolei Middle and High schools, which would be governed by faculty, parents and community leaders. The schools would be exempt from the state procurement code, have budgeting and hiring freedom and the ability to negotiate their own collective-bargaining contracts. Although the schools need more autonomy, we question the proposed exemption from the procurement code, which could result in abuses.

There was also mention of successes in attracting the conference of the Pacific Basin Economic Council and a call-center company to Hawaii, and reiteration of the vision of making Hawaii an educational and medical center for the Pacific. This is progress, but much remains to be done.

Cayetano had nothing to say about Hawaiian rights or domestic partnerships but promised to send proposals to the Legislature at a later time. Perhaps he omitted them from the State of the State address to avoid detracting attention from other issues. We hope the Legislature does not let them dominate the session.

There was a more-of-the-same tone about the speech, perhaps inevitable after Cayetano's four years in office. For all the governor's claims of achievements -- and there are some impressive ones -- the condition of the economy remains his principal challenge.


Census methods

EVERYONE agrees that an "actual enumeration" of the nation's population required by the U.S. Constitution is impossible, but that is what it says. The U.S. Supreme Court has agreed with a group of taxpayers that the Clinton administration's use of sampling to fill in the cracks violated a statutory requirement for an unfettered one-by-one head count, but the constitutional issue remains unresolved.

Two-thirds of Americans generally fill in their census forms and mail them to the Census Bureau. Most others comply after some pestering, but millions go undetected. The Census Bureau proposed that, after reaching 90 percent of the estimated population, it be allowed to assume the balance to exist based on certain racial and ethnic assumptions. The complicated method was to rely on categorization of households within census blocks and was to be based on how many people were initially counted.

After the 1990 census, the National Academy of Sciences suggested sampling after then-President George Bush asked for its recommendation. The Census Bureau then developed the method. Since it was assumed that most of those missed in the head count are minorities and low-income families, their presumed Democratic leanings made this a partisan issue. Also affected are the way census figures are used to draw congressional, state and local voting districts and to hand out $180 billion for highway construction, homeless shelters and other federal programs.

By a 5-4 vote, the high court ruled that the federal census law bars the use of statistical sampling but did not rule on whether it violates the Constitution. The court dismissed a suit by House Republicans that was considered along with the taxpayers' suit.

By choosing not to rule on the constitutionality of sampling, the high court left room for the Clinton administration and Congress to formulate a method of arriving at a reasonably accurate census without being tied to cumbersome and obsolete counting methods. Too little time probably exists for such a compromise to be accomplished in time for the 2000 census, but the methods used to complete future censuses may be changed to suit the times.

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