[THE ISSUE]
Governor Cayetano embraces a former rival's plan for using the hurricane fund.
WITH lawmakers seemingly bent on raiding the hurricane relief fund, D.G. "Andy" Anderson's suggestion to borrow money from the stash instead is worth deliberation. At least the fund would eventually be replenished, even though interest payments will push up the cost to taxpayers in the long run. Borrow, don’t raid,
hurricane fundAnderson, a gubernatorial candidate, sent his proposal to Governor Cayetano, who acknowledges a good idea when he sees one, even if it comes from a man who was once a political rival. The governor passed the plan along to the Legislature, which he has rightly criticized for "hunkering down" rather than coming up with strategies to revive the state's economy.
The $213 million fund, set up to back homeowners' insurance after Hurricane Iniki, has proven irresistible to legislators as projected revenues lag and budget shortfalls menace programs and services in an election year. The House already has approved yanking $100 million and the Senate appears poised to do the same. The governor himself proposed using all of it to balance the budget.
Anderson's proposal would have the state pay back the money with three to four years of interest and pegs spending specifically for education. Directing the cash toward the public schools certainly sweetens the pot for those who find raiding the fund unpalatable. It is shrewd politically. Anderson, a prominent Republican who has switched parties for this election season, is no novice in clever campaigning.
Neither is Cayetano, who can use Anderson's plan to prod Democrats in the Legislature, who have balked at approving his near-$1 billion in capital improvement projects. The governor has traded harsh words with lawmakers as the Legislature heads into the last month of the current session.
Amid all of this caterwauling comes an observation sure to be noted by taxpayers -- that the state's standard income tax deduction, unchanged since 1989, doesn't keep up with inflation. As such, the deduction represents a tax increase. The Tax Department has proposed an increase and though election-sensitive politicians might be tempted to act, the budget crisis should preempt that for now.
As for the hurricane money, the fund's executive director, Lloyd Lim, has cautioned legislators that at least $100 million must be retained to be able to reissue insurance should there be a hurricane. If so, lawmakers could adjust their scheme to Anderson's by borrowing only what they think is needed to balance the budget. That way, the fund would retain some strength and, in due time, would be repaid.
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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
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Lucy Young-Oda, assistant managing editor 529-4762; lyoungoda@starbulletin.comJohn Flanagan, contributing editor 294-3533; jflanagan@starbulletin.com
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