State of the State

Gov. Lingle calls for more high-tech investment, upgrading schools and a $100-per-person tax rebate

THE STATE WOULD BUY 500 kiawe-choked acres at Kalaeloa to forge houses and businesses, and families would get tax deductions to send children to local colleges and universities, under Gov. Linda Lingle's plans.

With some 219 ideas -- some new, some old and some borrowed -- Lingle is launching her second four-year term with a new call to encourage innovation and help Hawaii compete in a global Internet-savvy economy.

STATE OF STATE SPEECH HIGHLIGHTS Here are some of the top points made by Gov. Lingle in her fifth State of the State speech yesterday at the state Capitol: » Parents can reduce their taxable income by $20,000 per year and use the money to pay for tuition at any Hawaii college, university or technical school. » Taxpayers would be able to create "lifelong learning accounts" to set aside pretax dollars matched by tax-free employer contributions to pay for skills training and education programs. » Honolulu Community College would join with Belmont University in Nashville, Tenn., to create a local musical training program. » Affordable wireless Internet access would be available everywhere it is feasible in Hawaii by 2010. » Change to certificate of need program for hospitals so "local communities have the final say in determining which new medical facilities to support"; this comes in reaction to the denial of a certificate for a new hospital on Maui.

Lingle came to a joint session of the state House and Senate yesterday to flesh out her ideas during her State of the State speech.

The almost 50-minute speech sounded many of the themes Lingle has been stressing since her inauguration speech last month.

"The new global economy is a wave crashing on our shores -- we can ride it, or we can be swept away by it. Please make the choice with me to ride it," Lingle told the 76 lawmakers.

Some of Lingle's proposals are similar to ones she has supported in the past, such as her calls for tax cuts and a tax rebate.

"I have left enough room in my budget for a $100-per-person tax refund for those filers with less than $100,000 in income and $25 per person to the small minority of residents whose income exceeds $100,000," Lingle said.

Last year, she proposed a $150-per-exemption refund "for all but the highest-income residents."

This year, Lingle also suggested a new version of a plan first proposed by Gov. Ben Cayetano to encourage high-tech investment in the islands by tapping some of the $10.5 billion in resources controlled by the state Employees Retirement System. In 2000, Cayetano called for "establishing a new $50 million state venture capital fund called the Hawaii Technology Fund," with a portion of the money coming from the ERS.

This year, Lingle said she wanted to join forces with House Speaker Calvin Say's unsuccessful idea from last year to create a $100 million Hawaii Innovation Fund.

Lingle said yesterday that the ERS should invest "in this professionally managed fund to finance promising high technology and create industry companies as an affirmation of our belief in Hawaii's innovative capabilities."

Lingle said the ERS board had neither supported nor dismissed her idea. "Not one of them dismissed it out of hand," Lingle said.

But legislators were skeptical.

"I think that's very problematic and one that we're going to have to closely scrutinize because we already have a sizable unfunded liability in our ERS," state Sen. Roz Baker, chairwoman of the Ways and Means Committee, said.

House Finance Committee Chairman Marcus Oshiro dubbed the high-tech fund "an old proposal that's coming back to us again."

"I think we floated the idea about 10 or 15 years ago -- mandating the ERS to use that funding source in that manner. I think the rub will come when the ERS informs the governor that they might be prohibited by their fiduciary responsibility to the retirees, to the pensioners, to protect that and make the wisest investment of their funds," Oshiro said.

Lingle also proposed providing wireless Internet access from state school and office buildings. She also said affordable wireless access would be available everywhere it is feasible in Hawaii by 2010.

Another idea similar to the Kalaeloa Task Force recommendation from last March calls for the state to buy 500 acres of Navy property fronting the former Barbers Point Naval Air Station.

Kalaeloa, Lingle said, is the "best place to achieve positive economic growth for the Leeward Coast while repositioning our economy to one based on innovation."

Lingle foresees "opportunities for work-force housing, innovative technologies and job creation."

Finally, Lingle again said that the aim of her state plan is to "change our economy from one based on land development to one fueled by innovation and the new ideas generated by our universities and a highly trained work force."