State can’t spend
what it doesn’t haveThe issue: A revenue shortfall
pushes the state to consider
a decrease in spending.STATE officials, bureaucrats, legislators, employees -- and taxpayers -- all must face the sober reality that dwindling revenues leave few options but to cut spending. The continuing hearings with one department head after another painting bleak scenarios about the effects of reducing their allotments serve only to defer the difficult task. It's time to get on with it.
There is little likelihood that legislators will raise any taxes that could add significant new dollars to state coffers. It is an idea distasteful to politicians in an election year, made even more so as taxpayers and businesses struggle through the post-Sept. 11 recession. As tempting as the $213 million in the Hurricane Relief Fund may be, breaking out that money would be a one-time fix against an economic future that without innovative change will remain as grim as it is today.
Attorney General Earl Anzai says the state's financial problems are worse now than when he was budget director in the mid-1990s and government laid off more than 400 workers and rescinded tax credits. He points to the increasing cost of public employee wages as the only part of the budget that has grown during the last eight years. With the demand for services and programs also increasing, lawmakers and officials may have to consider a reduction in the work force.
Putting people out of work may exacerbate the state's economic problems, but careful examination of jobs and benefits may be necessary. Exceptions should be made for education-related positions and those that would impair social and health services, but all others should be up for review.
Shortly after the terrorist attacks, state lawmakers were called to a special session to come up with ways to ameliorate the state's economic situation. Short-term solutions were found to lessen the effects on businesses and the crippled tourism industry, and aid was extended to people who lost their jobs. However, legislators and state leaders put out few ideas to strengthen or broaden the economy to increase the revenues needed for state services.
So far this session, the attention of lawmakers has been tangled in traffic cameras and other peripheral matters. Meanwhile, the discussion and search for alternatives to Hawaii's tourism-based economy have been pushed to the background, obscured most recently by the breast-beating and alarming cries about budget cuts.
No new proposals for increasing revenues have emerged. What is left is reducing spending where it will be least painful, and it should be done now. Putting off cuts in hopes that the economy will turn around deepens the fiscal hole in which the state is mired.
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Welfare-reform law
needs closer scrutinyThe issue: President Bush
has proposed stricter work
requirements for welfare recipients.THE nation's governors have asked President Bush to relax work requirements for some people on welfare because of the troubled economy, but the president instead has called for stiffer requirements. The clash is likely to intensify as Congress considers renewing the 1996 welfare reform program as it approaches expiration on Oct. 1.
The law replaced federal cash assistance for poor families with block grants to states and new work requirements. It also established a lifetime limit of five years of welfare payments to any family. However, the current recession and the economic effects of the terrorist attacks on America have created a need to expand -- if only temporarily -- the safety for the poor, not reduce it.
Welfare reform was praised as the number of welfare recipients plummeted from 12.2 million in 1996 to 5.3 million last September. However, that occurred during a period of economic prosperity on the mainland. In Hawaii, where the economy slumped during that same period, the welfare rolls reached a peak of 23,528 families in 1998 before dropping to 18,148 last July, a belated three-year recovery period during which the state's unemployment rate fell from 5.9 percent to 4.2 percent.
In January, as Hawaii shared with the nation the economic effects of the Sept. 11 terrorist attacks, Gov. Cayetano temporarily reduced the minimum number of hours of work required for employed welfare recipients from 32 hours to 20 hours a week to qualify for a $200 monthly subsidy from the state. Bush wants to increase that minimum weekly work requirement to 40 hours.
States also are required under current law to have 50 percent of their welfare populations engaged in a work activity. Bush wants to raise that to 70 percent by 2007, even though jobs are less plentiful.
Increasing requirements would be understandable if the welfare-reform measures in the 1996 law had been proved to be effective. The evidence of such success is less than convincing; the size of welfare rolls is more likely due to the state of the economy.
In an experiment in Connecticut, 2,400 families were randomly selected in 1996 to receive public aid under the old welfare rules. During the next four years, 81 percent of those families left welfare for jobs and 72 percent remained off the rolls at the end of the four-year study. The comparison with those assigned to welfare reform programs was less than spectacular: 5 percent more of the welfare reform participants took jobs, and 9 percent fewer were on the rolls at the end of the four years. That is hardly confirmation that welfare reform was the silver bullet that was envisaged.
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Published by Oahu Publications Inc., a subsidiary of Black Press.Don Kendall, Publisher
Frank Bridgewater, managing editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, assistant managing editor 529-4768; mrovner@starbulletin.com
Lucy Young-Oda, assistant managing editor 529-4762; lyoungoda@starbulletin.comJohn Flanagan, contributing editor 294-3533; jflanagan@starbulletin.com
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