Cayetano wants
$1 billion to bolster
state’s economy

The governor urges the Legislature
to fund UH and prison projects

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By Richard Borreca
rborreca@starbulletin.com

As Hawaii's tourist-based economy considers the possibility of a recession because of the Sept. 11 terrorist attacks, Gov. Ben Cayetano is urging the state Legislature to move boldly.

Cayetano proposed yesterday that when the Legislature goes into special session to deal with the economic downturn, it add an extra $1 billion to the construction budget.

"The dominance of tourism in this state's economy has never been made clearer than in this crisis," Cayetano said.

Cayetano wants the state to redraft its agreement with Campbell Estate to start work on a 500-acre West Oahu campus for the University of Hawaii, start work on a new medical school and finance a privately built or operated prison in Hilo emphasizing drug treatment.

Cayetano also wants to float capital improvement bonds to pay for a new round of repair and maintenance for state buildings, including schools.

The governor has just concluded a series of meetings with business leaders, labor officials and small business operators to search for ways of avoid or blunt the effects of the dramatic tourism decline.

Cayetano warned that the Legislature must concentrate on making big moves to help the economy.

"The danger would be if things get a little better, they may relax and say we really don't have to do this," Cayetano said.

Senate President Robert Bunda cautioned, however, that the Senate has questions about what the money will be used for and how it will be spent.

"We are going to have to reach consensus on this. Right now, I think it would be rather difficult to get consensus because everybody has their own ideas on what the money should be used for," Bunda said.

House Speaker Calvin Say, who caucused yesterday with fellow House Democrats, said he was in favor of some increased construction spending, but did not comment on Cayetano's new billion-dollar proposal.

Bunda and Say agree on the need for a special session, although Say said the Legislature will need more time to develop a set of bills to address the recession.

House and Senate leaders had originally said the Legislature could go into session as early as Oct. 15.

Cayetano's big new spending plan calls for the state to renegotiate its deal with Campbell Estate for the West Oahu campus.

Under a current agreement with Campbell Estate, the state received 941 hillside acres from the estate mauka of the H-1 freeway in exchange for the 59-acre Hawaii Raceway Park. The new West Oahu campus would use a portion of the site.

Yesterday, in a meeting with Star-Bulletin editors and reporters, Cayetano said he wants to renegotiate the deal so the state can build a campus on land makai of the H-1 freeway.

"If the legislators are willing to spend the money, we will renegotiate our agreement with Campbell and go back to the original 500 acres," Cayetano said.

"Let's go with the 500 -- I am meeting with the trustees -- it is in their interest, and I hope it is something we can work out," Cayetano said.

As for the prison, as late as last year, Cayetano had said he was dropping plans for another state prison because of the debate of where to locate it and how it would be built.

Now, however, he said there is new interest in building a prison.

"Right now, we are looking at some proposals by some people who've done business in California. One company is willing to come and do it if we provide the land," Cayetano said.

"Something like this would probably be located in Hilo, although it probably should be on Oahu because that is where all the doctors and such are, but we need to spread things around," Cayetano said.

The money, Cayetano said, will be borrowed, but because of the low interest rates, the state will be able to sell the bonds for a low rate and will save money at the same time it encourages construction.

The governor, who leaves office next year, emphasized that if the Legislature does not act, it will be a political mistake.

"If we go into a special session and we come out with just a few things that don't demonstrate any foresight or long-range vision and give the impression that we think this is just a short-term time thing, then I don't think the public will be satisfied.

"Some of those guys might join me in retirement," Cayetano warned.