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Monday, March 12, 2001

Public worker unions
wield too much power

Bullet The issue: The state Senate has voted to rescind a scheduled reduction in income-tax rates.

Bullet Our view: The power of the public employee unions forces legislators to make unpalatable decisions.

THE state Senate has voted to rescind the income tax cut scheduled for next year but Governor Cayetano is threatening to veto any such action.

The House seems reluctant to follow the Senate's lead on the issue and the governor's veto threat should be an effective deterrent. Chances are the tax rollback won't happen, but its approval by the Senate is an indication of the stress the legislators are under in their efforts to balance the budget.

The law initially reduced the state's top income-tax rate from 10 percent to 8.75 percent, adjusting lower tax brackets proportionately. Last Jan. 1, the top rate was reduced to 8.5 percent. Next Jan. 1 it is scheduled to be cut to 8.25 percent.

If the Senate action became law, it would amount to the state reneging on promised tax relief, which would not sit well with taxpayers. But Ways and Means Chairman Brian Taniguchi, who has to come up with ways to make the state's means fit its needs, figures this is the only way to balance the budget.

With the major public employee unions either threatening to strike or demanding that the state come up with the money to pay an arbitrator's award, and with massive amounts of money needed to meet the Felix decree for special education students and other needs, balancing the budget will be no mean feat.

Rescinding the income tax cut is not a palatable choice but there may be no better ones available. The full power of the public employee unions is being brought to bear on the legislators -- as well as on the governor, but he can't run again so he can afford to defy the unions.

The power of the unions is not absolute, but it should not be underestimated. For many politicians, the unions are crucial to political survival. Legislators oppose them at their peril.

Many government workers are dedicated, able people who deserve their pay and more. The problem of course is that the state has a limited amount of money to spend.

The demands of the unions must be weighed against other needs. But the unions have extraordinary leverage to get their way -- particularly with legislators who are dependent on their support for re-election.

That reality explains why few Democratic legislators support the governor in his resistance to union contract demands. Many of them know that satisfying the unions requires sacrificing important state programs, but they are in no position to resist.

The politicians' plight would become even worse in the event of a strike, because the public pressure to settle would be irresistible.

In a democratic society, public as well as private workers should have the right to organize. But in Hawaii and other states, government employee unions have acquired so much political power that they have skewed public priorities.

Thus the politicians are left squirming desperately trying to balance the budget while giving too high a priority to accommodating the unions. And this situation will continue indefinitely unless the public demands that its needs be given priority.

Jesse Jackson’s tactics

Bullet The issue: The tax-exempt status of Jesse Jackson's organizations has been challenged.

Bullet Our view: Jackson's threats of boycotts and protests have gotten results in the form of corporate contributions but could violate the law on nonprofit organizations.

JESSE Jackson grabbed the national spotlight after the 1968 assassination of Martin Luther King Jr. by exaggerating the importance of his role in the civil rights movement. He has been suspected of dubious practices ever since.

Now, however, the heat has been turned up following the disclosure that in 1999 he fathered a child by a staff member of one of his nonprofit groups, the Citizenship Education Fund.

The fact that Jackson had been counseling former President Clinton following the disclosure of his affair with Monica Lewinsky while having himself been involved in an extramarital affair led to charges of hypocrisy.

Moreover, it was disclosed that Jackson's former mistress had been paid $120,000 a year by the fund and in addition had received a $40,000 separation payment. The American Conservative Union accused the fund of violating the terms of its tax-exempt status by using charitable money "for personal inurement" by paying off the woman.

More serious than these infractions is the charge by another conservative watchdog group that the Citizens Education Fund extorted millions of dollars from corporations. The group, the National Legal and Policy Center, charged that Jackson has threatened to lead boycotts against corporations engaged in merger negotiations but backed off after the companies pledged money to his organizations.

One case cited was a threatened boycott against GTE Corp. and Bell Atlantic Corp., now called Verizon. The companies granted or pledged $625,000 and $375,000, respectively, to Jackson's groups.

Jackson responded to the charges by claiming that he was a victim of a right-wing conspiracy. These organizations are conservative, but that doesn't mean their charges are false. Jackson's tactics are questionable and his organizations' right to tax-exempt status dubious.

Jackson's Rainbow/PUSH Coalition and three other interlocking organizations received $17 million last year, of which 97 percent came from corporations. His well-publicized strong-arm tactics have clearly been lucrative, but are they consistent with the law on nonprofits?

There have long been questions about the financial arrangements in Jackson's organizations, but political considerations may have shielded them from scrutiny. An investigation by the Internal Revenue Service, requested by the National Legal and Policy Center, is in order.

Unlike his mentor, Martin Luther King, Jackson is an opportunist who has used the civil rights movement to his own advantage. It's time the government took a closer look.

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

Frank Bridgewater, Acting Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor

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