EXCLUSIVE

The governor's vision for Hawaii

Economy: It's turning around, he says, but unexpected costs have slowed progress
Education: To compete, he says, 'We need a revolution, an absolute revolution'
Civil service: He's willing to fight the public employee unions to reform the state's civil service system
Medical school: It's essential but too expensive. He wants a Mayo Clinic or M.D. Anderson clinic to take over

By Richard Borreca
Star-Bulletin

AS Ben Cayetano gets down to work for his second and final term as governor, he sounds like an outsider reformist, determined to dramatically shake up a somewhat sleepy state government.

In a wide-ranging discussion with Honolulu Star-Bulletin editors and reporters yesterday, Cayetano was critical of Hawaii's educational system and vowed to reform the civil service system.

He said he thinks privatizing the University of Hawaii medical school is worth exploring and will lay off state workers if unions insist on a new round of pay raises. He wants convention center officials to consider dropping rental fees to lure big groups.

Cayetano, who won re-election partially on the promise that the state's economy was turning around, said that his predictions were accurate at the time, but that unexpected costs such as more money to to provide education services to physically disabled children have slowed the state.

"We are finishing this fiscal year with a carry-over balance of $180 million, next fiscal year it will go down to $64 million because of the tax cuts beginning to kick in," he said.

"The surplus I talked about is there, it is just that the expenses are as well."

The second part of the key to Cayetano's election success was the support of the public employee unions, but while he said the state has enough money for the retroactive pay raises, there is no new money.

"I told them there is no money, our position is zero," he said.

If the unions take the negotiations with the state to arbitration, as they can if they don't agree with the state's position, Cayetano says he will lay off state workers to keep the budget balanced.

Noting he has always supported the Hawaii labor movement, Cayetano said yesterday that he would be willing to fight the public employee unions to reform the state's civil service system. He pointed to several problems in the system, noting, for instance, that he didn't think public school principals should be in unions and that tenure affords University of Hawaii faculty enough representation without having a union, too.

"University professors shouldn't be in a union. Every great university in this country doesn't have a faculty union," he said. "Obviously you are not going to get quality or the best quality if you don't have some accountability in the system."

Speaking of the university medical school, Cayetano said he has started discussions with University of Hawaii president Kenneth Mortimer about finding a private party to take over the school.

Cayetano says the school is essential for state plans to attract visitors and establish itself as a mid-Pacific health center, but the medical school is expensive.

He thinks that if a large, well-known mainland medical institution such as M.D. Anderson in Houston or the Mayo Clinic would take over the medical school it would be a benefit.

"If we don't privatize it, we need to make sure we fund it and make it a viable operation," he said.

Cayetano is most concerned, about the public school system. A recent trip to the National Governors' conference made him see that Hawaii must do much more to compete in the new global economy. "We need a revolution in education, an absolute revolution," he said.

Hawaii's public school standards are vague, Cayetano said. And while Hawaii has a policy against "social promotion" of students who aren't passing courses, it still happens.

"Whenever you talk about measuring performance in this state our teachers feel threatened."

Excerpts

Gov. Ben Cayetano met yesterday with Honolulu Star-Bulletin editors and reporters for an hour-and-a-half interview. He talked about his new plans to reform the state's education system and privatize the University of Hawaii medical school and addressed the problems with reforming civil service.

Here are excerpts from that interview.

State surplus

The budget surplus, we're finishing this fiscal year with a carry-over balance of about $180 million. Next fiscal year it will go down to $64 million. That's because the tax cuts are beginning to kick in, so the surplus that I've talked about, it's there, just the expenses have been very big as well ...

We've kept the price of government pretty much in check considering the growth and the kind of services that this state provides. But with school enrollment expanding and all that, in certain areas the government is going to grow.

The government has grown with the prisons because those are growth areas we have to deal with. We have no choice ...

I know you folks wrote an editorial that was critical about my diagnosis of the economy, but let me read you some numbers.

This is last year: November, up 10.7 percent; October, down 1.8 percent. This is the tax revenues: August, up 9.7 percent; July, 6.2 percent up; June, 6.5 percent up; May, 3.7 percent; April, classic, 19.8 percent; March 23.6 percent.

You look at all that, you think the economy was making a comeback. At least that's how we felt, and I still feel that we've kind of bottomed out.

Now the revenues for December, January, February:

Down 4.4 percent in December; 1.9 percent in January; 7.8 percent in February.

It's down (last month), but we expected it to be down because we passed one of the biggest tax cuts this state has ever seen.

Saving state money

If you take a look at other areas in the state government, welfare for example -- we have put more welfare recipients back into part-time or full-time jobs then any other state in the western United States.

The Department of Human Services ranked (us) No. 1 and 2 in accuracy and efficiency in administering federal programs ...

We built a school on Kauai, for example, and saved $6 million. We came in $6 million below what we thought it would cost. We built a school on Maui, same thing.

Education reform

We need a revolution in education. An absolute revolution.

The states on the mainland which have made progress in education, at least according to their SAT scores, all have adopted and the elected officials had the will to adopt, usually over the protest and opposition of the education community, ways to measure performance. Texas, for example, you talk to (Gov.) George Bush, he believes you raise the bar and people will rise to the occasion.

And what has happened in Texas, they have achieved great success or gains in their test scores. In particular in the minority areas.

One of the problems that we have in this state is that our education system, or public education system, does not have those kind of things in place. Our standards are very, very vague.

And so while on the books we may have a rule, a policy that says there will be no social promotion, it still happens because nobody knows what the standards are.

Every time you talk about measuring performance in this state, our teachers feel threatened, everybody feels threatened and maybe that's because for many, many years we didn't have to do all these kind of things. But I think that we need to do it as soon as we can ...

University of Hawaii Medical School

It's important that we reaffirm our commitment to the medical school.

The medical school right now is a drain; we subsidize it $15 million a year. One of the thoughts that I have is that we need a medical school for us to become the premier health-care center of the Pacific. So one of the thoughts that (UH president) Ken Mortimer and I discussed was the feasibility of privatizing the medical school and going to an M.D. Anderson or a Mayo (Clinic) or one of the universities on the mainland and saying, 'Listen if you want to come in and take over the University of Hawaii's medical school...'

I asked Ken to take a look at it and to study it a little bit to see if it could be done. My sense is that it has some potential and it may help us help the university situation ...

If you have a private operation come in and take over, we need to find some other way to train local doctors because what will happen is that if it's an M.D. Anderson, Mayo, UCLA or Stanford, then they're not that interested in doing those kinds of things and they'll want to make this a profitable operation. We need other ways to train our local residents to become doctors ...

We need to do something about the medical school. If we don't privatize it, then we need to make a commitment and fund it and make sure that it's a viable operation. And it's a good medical school right now, I've been told.

Civil service reform

What's on the rocks with civil service reform right now is that bill that sunsets the law. And we put that in place so that there'd be a sense of urgency that'd make them do something.

And we wanted to be dramatic, you know, and show people this is what we wanted, this is, this has to be done, and make it so that we had to do it.

That's what we were trying to do. I think the unions are doing what they think is best. (The) People who need to be held accountable are the legislators ... when this administration goes out on the limb and they know what needs to be done.

Don't blame the union leaders for doing what they're doing, that's their job.

There's some legislators who, like myself, are very pro-labor. I've been pro-labor all my life but after having become governor you see some handwriting on the wall about what's going to happen down the road unless we do make some changes ...

h12 Convention center

The problem with the convention center is that it hasn't been marketed very well.

I'm pretty disappointed actually ... Convention center should be like a loss leader for the tourist industry. That's why I felt it should be under the tourism authority, because they have the responsibility for developing a different strategy for tourism in this state, and I think the people on tourism authority would see the convention center as one other tool that we have for developing tourism in the state ...

I think we should go out and buy conventions or consider it. What do I mean? Maybe we should go out and tell people we will open it to you free; if you come and bring 20,000 people to Hawaii. At least for maybe the next year or so because we are behind in our marketing.

New prison

We went through all this, we made a decision. But the new players now are wielding their power because they don't want these things there.

I'm not sure. You have a change in players. All of a sudden you have someone like (state Sen.) Andy Levin, who now is the co-chair of the Ways and Means Committee. Andy is opposed to a prison on the island anyway, I think. And he will have a say in the money that is being appropriated. We have new senators like David Matsuura who now has an idea for another site; and you have others who feel that we should continue to send people to the mainland. But we're, right now, we are on track, we're moving to building the prison in Kulani because I went through all of this already ...