Case raises specter
of flowing red ink

If elected governor, he cannot rule
out layoffs to balance the budget

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By Richard Borreca
rborreca@starbulletin.com

Democratic candidate for governor Ed Case promises no new taxes and no raids on state special funds if elected governor.

He also refused to rule out laying off state workers if the state's economic picture does not improve.

At a news conference yesterday at his Kapiolani Boulevard campaign headquarters, Case said his calculations show that if nothing is done, the state will be $59 million in the red in a year.

"We are clearly not living within our means. We have got to stop. I'm saying pau already. We need to collectively balance our budget on a sustainable basis," Case said.

The budget deficit would grow to $239 million in fiscal 2003 and then to $329 million in fiscal 2005, if nothing is done, Case said.

Case said he was challenging his major Democratic opponents, Lt. Gov. Mazie Hirono and D.G. "Andy" Anderson, to explain how they would address the possible budget shortfalls.

"There has been a failure to provide leadership. This is our highest and most immediate challenge and I await the other candidates to face this, to face the music," Case said.

Hirono, saying she had not seen the specifics, declined comment on Case's plan. Anderson, however, said that Case needed to show patience and a more "business-like mentality."

Republican Linda Lingle also declined comment.

Case and Anderson disagree on the issue of possibly laying off state workers.

Case, who is the former managing partner for his law firm, said that he has been forced to lay off workers, calling it one of the worst experiences of his life.

"But no candidate who is realistic in assessing the situation can categorically rule that out and I have not ruled it out.

"It would be a last resort, I think we have lots of options before we get to that, but to rule it out whatsoever is not responsible," Case said.

Anderson and Lingle have both said they would not lay off state workers to balance the budget.

"I would rather structure an early-retirement buyout package ... If we want a healthy economy we can't have long unemployment lines," Anderson said.

Case also criticized Lingle's plan to eliminate the tax on food and medicine as irresponsible. But he added, if the state budget can be managed he would like to gradually trim the state excise tax, bringing it in a series of cuts down to 3.5 percent from 4 percent.

"But a large tax cut at this time is simply unrealistic," Case said.

To give state government a businesslike approach, Case said he would recruit local island business persons to serve in his cabinet. He singled out Walter Dods, chairman and chief executive officer, BancWest Corp., as one person he would like to recruit for state government work.

"Walter Dods offered to serve his state at a dollar a year and I certainly intend to take him up on this offer," Case said.

As to how he would deal with the specific of his projected budget deficit, Case said he would look to trimming nonessential state programs and services. For instance, he said, not all the courses now offered at the public schools' adult education classes are essential and they could be cut. Case also said he would speed up the privatization of state functions, if they could be done at a lower cost.

Case said he sent a copy of his plan to Gov. Ben Cayetano and welcomed a critique as Cayetano did for Lingle's plan.