Restructuring economy top goal

She calls for a transition from land development to innovation

FOUR years ago, Gov. Linda Lingle came into office saying the state would be erecting an "Open for business" sign.

Yesterday, in her second inauguration speech at the state Capitol courtyard, Lingle said Hawaii must face a bigger hurdle.

GOV. LINDA LINGLE Born: June 4, 1953, in St. Louis, Mo. Education: California State University at Northridge Public service: Maui County councilwoman 1980-1991; Maui mayor 1990-1998; elected governor 2002 and re-elected Nov. 7.

"Our state's greatest challenge in the coming years (is) a true restructuring of our economy," she said during her 23-minute speech.

Hawaii's economy must be "repositioned," Lingle told the estimated 1,000 gathered under sunny skies in the courtyard.

The transition, she said, must be "from one that creates wealth through the buying and selling of land, to one that creates wealth through innovation and new ideas."

To continue to base financial success through land development, Lingle said, "would be a very unwise path for us to follow."

"Because even average citizens see buying and selling real estate as the only path to financial security, and because we have somehow survived the bitter public debates over land development projects, the natural inclination for many is to keep doing what we have been doing.

"We will never catch today's global economic waves by developing land," Lingle said.

During a luncheon at Washington Place to honor her Cabinet and other state officials, Lingle said her speech should not be considered anti-business, but was a reflection of a need to bring balance to the state's economy.

"It is not anti-business. We want to develop whatever economic activity people are working on," Lingle told reporters. "Everyone's balance point is different. For me, the development of the North Shore breaks my balance point.

"Personally, I don't think it is in the state's interest to have massive land development ... that the infrastructure can't handle, that will require labor that is nonexistent," Lingle said.

What the governor wants is an economy based on "creating new ideas," she said.

"The kind of business we would like to move towards is the kind that pays higher wages, has better jobs, more technology, science, math and engineering based," Lingle said.

Reaction to the speech was largely complimentary, although Democratic leaders in the House said they were hoping to hear more specifics of the governor's proposals.

"I thought the speech was excellent," said House Speaker Calvin Say, who is entering his 11th year as the chamber's leader. "I wish there were more details, but she'll probably share them with us in the State of the State. She did set the vision of where we want to go."

He said the vision laid out by the governor seems to be an indication "that there must be a lot of resources as far as the fund balance for the general fund."

Say (D, St. Louis Heights-Wilhelmina Rise-Palolo Valley) sounded skeptical on Lingle's most ambitious statement in regard to potentially transforming the state's economy.

"That's going to take a lot, as far as overhauling the state economy," he said. "Knowing that we have four pillars -- military spending, tourism, construction and agriculture -- where in the four that she's trying to restructure it, I really don't know.

"For a Republican governor to take that kind of a position -- to say there is no free enterprise, no capitalism -- I was surprised about it. I'll be open to it, but I'd like to see what the details are."

Rep. Kirk Caldwell, the incoming House majority leader, said he also wanted more details.

"I'm hoping that we'll get clarity from her even before the State of the State, because we'll be putting in our (legislative) package before then," said Caldwell (D, Manoa). "I'm hoping that maybe there will be commonality between the two so that we can actually get something done with no one claiming credit -- no ego, just doing the people's business."

Say and Caldwell said they felt the governor struck an appropriate tone of working cooperatively.

"I think she's recognized that in order to be a good governor and a good executive, she needs to work with the legislative branch where possible, and she said that today," Caldwell said. "I think she struck that tone, and we're looking forward to her coming over and working with us."

Incoming Senate President Colleen Hanabusa also warned that while calling for joining a high-tech global economy is worthwhile, Hawaii has many needs.

"The problem is we have many local needs that we cannot leave behind. For instance, there is a critical education component needed," Hanabusa (D, Nanakuli-Makua) said.

Lingle's speech started with one blooper that many in the audience noticed immediately. She started by recalling she had first flown into Honolulu in the evening "more than 30 years ago."

"It was the exact scene that Cecilio and Kapono sang in 'Honolulu City Lights,'" Lingle said. She had confused the music group of Cecilio Rodriguez and Henry Kapono with brothers Keola and Kapono Beamer, who in 1978 recorded the song that would become a Hawaii standard. The song, written by Keola Beamer, and the album of the same name won six Hoku awards in 1979.

Asked about the mistake, Lingle said she had written the speech and read it over and showed it to others, but no one had caught the mistake.

Mayor Mufi Hannemann, who broke out in song during his own inauguration two years ago, said Lingle should have checked with him.

"I could have sung it for her," he said.

SPEECH HIGHLIGHTS Some highlights from Gov. Linda Lingle's second inaugural speech: » On doing the people's business: "I would describe the election as a mandate from the public for both me and the Legislature. "That mandate is to work together to solve the state's problems, take advantage of the opportunities arrayed before us, and preserve all that is special about Hawaii. "That is our true mandate!" » On Hawaii's role in the Asia-Pacific region: "It is our natural comfort with diverse peoples and our historic and cultural ties in this part of the world that make us such an important asset to our country as the federal government searches for its place in the Asian Century. "I want to spend time pressing this point both in Washington and here at home in the coming years, because Hawaii is the only natural bridge between these two very different and important cultures. » On preserving land: "This increased focus on international outreach is vitally important to our future economic growth, and integral to efforts to diversify our economy. "At the same time we are focusing far beyond our shores, here at home we need to ensure that the land and water needed for successful farming and ranching are preserved and protected, and that a rural lifestyle remains an option for those seeking a slower pace of life." » On Hawaii's economy: "Continuing to base our economy and our future on land development is foolhardy, because land is finite, and because land development often causes deep rifts in our island community, a community that depends so heavily on harmony among our people. "These rifts will become more frequent and intense over time as the amount of developable land diminishes. "Because we have based our economy on land development for so long, because even average citizens see buying and selling real estate as the only path to financial security, and because we have somehow survived the bitter public debates over land development projects, the natural inclination for many is to keep doing what we have been doing. "But this would be a very unwise path for us to follow. "Instead we need to begin focusing on human development -- the kind of development that recognizes our future economic success depends upon innovation and new ideas, of which there is an unlimited supply." » On working with Democrats in the Legislature: "In my State of the State Address in late January, I will talk in greater detail and offer specific proposals to reposition our economy from one that creates wealth through the buying and selling of land to one that creates wealth through innovation and new ideas. "I will humbly ask the Legislature to work with me in a spirit of cooperation in order to meet what I view as our state's greatest challenge in the coming years -- a true restructuring of our economy."