Lawmakers face tough decisions on gov's funding plans

THE ISSUE Tax cuts and technology initiatives top Lingle's to-do list for the legislative session

A THRIVING economy and a state budget surplus of more than $730 million make a strong argument for Gov. Linda Lingle's tax cut proposals. Framed against increases in living expenses residents have seen through recent years, the changes in income taxes and additional exemptions Lingle has offered will put state lawmakers in a tight spot should they choose not to follow her lead.

However, both the governor and legislators should acknowledge that funding for many government programs and operations, such as state harbors, parks, highways and social services, has been deficient and should be raised now that more money is available.

In her fifth State of the State address yesterday, Lingle detailed initiatives she had announced previously, including one that ties math and science education with technological programs that fold in private and public schools and colleges as well as the University of Hawaii system. Her plans also would provide funding and support for incubator facilities in life sciences, film and music.

Legislators, education officials and business leaders should take a good look at the proposals that hold short- and long-term potential to add a more dynamic tech component to Hawaii's economy.

Along similar lines, the governor introduced an appealing element: to buy 500 acres of land currently held by the Navy at Kalaeloa, to be used in part for renewable energy research and development. Though the plan has yet to be completed, advances in renewable energy are paramount for a state heavily and dangerously reliant on oil while having myriad resources for alternatives that have not been vigorously pursued.

The governor drew on House Speaker Calvin Say's idea for a $100 million innovation fund but suggested the money come from the state Employees Retirement System, which pays out health and pension benefits for retirees.

The proposal seems to lay down a challenge to state workers to acknowledge that they themselves might have a commitment to invest in Hawaii's future in return for the advantages they receive. At the same time, the governor extended an olive branch to employees and their unions, whose full political support she has not enjoyed, praising them for their "dedication to the public" and offering them a budget that would give them "fair wage increases."

Those fair wages and other expenses will have to be balanced with the governor's tax cut proposals, calculated to reduce revenues by an estimated $346 million in two years. The cuts are a luxury Lingle can afford to serve up because of the state's healthy economy, and it would be hard to argue that taxpayers should not carry a lighter burden.

The governor's plan to adjust personal exemptions and tax brackets based on the rate of inflation seems reasonable. Eliminating the excise tax on basic foods like milk and cereal might be cumbersome for the food industry but should be considered.