Advertisement - Click to support our sponsors.
Editorials
Thursday, December 21, 2000Cayetano budget
sends a message
to unionsThe issue: Governor Cayetano's proposed budget contains no money for government employee pay raises.
SUBTLETY is not Ben Cayetano's strong suit. When the governor announced that his budget proposal made no provision for pay increases for government employees, the message was clear: He's not about to give in to union demands.
State tax revenues are up, thanks to a recovering economy. The governor intends to use the additional funds to bolster state programs that had to be cut during the years of economic stagnation.
The public employee unions have other ideas. Their members have had only modest increases during Cayetano's first six years in office. Now that more money is available, the unions contend they are entitled to share in the prosperity.
Russell Okata, executive director of the Hawaii Government Employees Association, the largest government union, said the omission of pay increases from the governor's budget proposals was "like a slap in the face." That is probably how Cayetano intended it.
With two years remaining in his term, it's understandable that the governor wants to repair the damage caused by budget cuts he was forced to make in previous years -- and leave a legacy such as his proposals for a major aquarium and new, expanded facilities for the University of Hawaii medical school. Satisfying union demands in addition to his own priorities would mean huge budget deficits, he argues.
Cayetano's avowed intention to bow out of politics when his term ends leaves him with no need to appease the public employee unions. That helps explain why he is much less accommodating to the unions than other politicians.
Most legislators have said they support funding the 14.5 percent raises over four years won by the HGEA in arbitration. But Cayetano threatens to veto any attempt to provide funding. He maintains that the arbitration panel did not have authority to award a four-year contract. He is also playing hard ball with the Hawaii State Teachers Association and the University of Hawaii Professional Assembly on their proposals.
Having no money for raises in his proposed budget doesn't mean that Cayetano won't approve any increases. He has said there is room for discussion about raises, but the state can't afford to pay what the unions are asking for.
The Legislature may add money to the budget for raises, and may fund the HGEA arbitration award. Many legislators are dependent on support from the government employee unions. And, unlike Cayetano, most hope to win re-election or move on to higher office.
That is at least part of the reason Lt. Gov. Mazie Hirono has publicly disagreed with the governor on the HGEA pay issue.
Whatever the merits of the unions' demands, the public interest must assign the highest priority to funding government services.
Raises for government employees should be considered only after those needs are met.
Bankruptcy reform
BY waiting until the lame-duck session of Congress adjourned before vetoing a bankruptcy reform bill, President Clinton deprived legislators of an opportunity to override his veto. But the proposal will be reintroduced in the new Congress and may fare better with a Republican in the White House.
The outgoing president left the bill unsigned -- a so-called pocket veto. Clinton said he vetoed the measure, which contained the most sweeping changes in the bankruptcy law in 20 years, because it was unfair to ordinary debtors and working families experiencing hardship, while letting abortion protesters and wealthy homeowners escape financial obligations. He said he favors revamping the law -- but without inequities.
Clinton complained that the bill would allow debtors who own expensive homes to shield their mansions from creditors while debtors with moderate incomes, especially renters, must live frugally and comply with rigid payment plans for five to seven years.
The legislation would have established a complex mathematical formula for determining whether debtors can repay part of their debts under a court-supervised plan rather than have them dissolved.
The credit industry, which has pushed for reform for three years, estimates that debtors walk away from $35 billion in unsecured debt each year. This produces losses for lenders and other businesses that are passed along to consumers in the form of higher interest rates. Personal bankruptcy filings nearly tripled from 500,000 in 1986 to 1.4 million in 1998.
The bill would have forced more debtors to file for bankruptcy under Chapter 13 of the code, which requires some repayment of debts, rather than Chapter 7, which allows debts to be erased beyond those that can be repaid by selling non-essential assets. The bill would also have speeded up deadlines in business bankruptcy cases and allowed sellers to recoup the full retail value of cars.
Opponents contended the legislation would hurt families hit by job losses, catastrophic medical expenses or other unforeseeable hardships.
The bankruptcy laws need to be tightened to stop abuses. Consumers have a clear interest in this because they wind up paying indirectly the debts of the abusers. But the loophole for wealthy homeowners should be closed and other problems corrected.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
John M. Flanagan, Editor & Publisher
David Shapiro, Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor
