Thank you for the opportunity to respond to the POP Accountability Group and to recall how far we have come as this Administration approaches two years in office.
The budget crisis left us unable to fulfill many of the dreams and plans we had and still have. But much has been accomplished, as you will see by reading our responses closely.
Many key initiatives, activities and accomplishments of this Administration are not reflected in promises and statements made during the campaign in 1994. For example:
Dozens of unnecessary boards and commissions were established to oversee virtually every state agency and to deal with nearly every state problem. A federal court consent decree loomed over our prisons because of overcrowded conditions. Our State Hospital entered its 22nd year without national accreditation because it could not meet national mental health standards.
Our state bureaucracy was a maze of red tape. Our cumbersome state regulatory rules frustrated and slowed private sector economic development adding to Hawaii's reputation as a poor place to do business. And our workers' compensation and no-fault auto insurance premiums were among the highest in the nation. We rolled up our sleeves and went to work. We made the hard decisions. We have made good progress.
First we put our fiscal house in order. Under our financial plan, there is no need for layoffs or furloughs. Moreover, our plan provides enough funding for modest tax relief for our people and modest pay raises for our state workers.
The 12-year old federal consent decree will be lifted this summer after the improvements to the women's prison at Olomana are completed. Recently, the State Hospital regained the national accreditation.
We eliminated more than 20 boards and commissions, 15 nonessential programs and streamlined 60 programs to improve efficiency. We cut red tape. Two years ago, it took five years to build a school. We've cut that time by at least one third and we will do even better this year.
We hired outside engineers from the private sector to cut our backlog of clean water permits. We adopted new rules which will speed up the process. We reduced the size of state government by approximately 3,000 positions.
Over the past two years we have kept the growth of our state government below the rate of inflation and the rate of our population growth.
And with the Legislature's help, we reduced Hawaii's workers' compensation premiums by 27%, a $100 million savings for Hawaii's businesses.
Restoring Hawaii's economy is the challenge that takes up most of my time and attention. Our simple goal is to create more and better jobs for Hawaii's people.
I believe there is good reason for optimism for State as a whole. Hawaii's economy will continue its slow, steady growth and a number of signs point to continued recovery.
To spur Hawaii's economy, more than $1 billion worth of construction has already been released directly by the State for schools, highways, airports and ports, or by speeding up the State permit process to enable private-sector building to go forward.
I insisted on an acceptable environmental impact statement for the $350-million convention center. We broke ground on this project so important to our vital tourist industry on time and we intend to finish on time and on budget. Over a dozen major conventions are already scheduled through the year 2003.
I have visited Korea, China, Japan and the Philippines, as well as many places on the Mainland, to urge business leaders to bring investment and opportunities that will create jobs for Hawaii.
I am determined to establish a pro-business, pro-investment environment in Hawaii. The mission of this government should be to facilitate rather than regulate. We have made significant progress in reforming workers compensation to bring down costs for businesses and consumers.
I have especially encouraged investments in newer and smaller technology-based Hawaii companies active in health, telecommunications and knowledge industries. The advances in diversified agriculture that we have seen following the decline of sugar and pine are truly amazing.
One of the highlights so far has been passage of a bill to ease regulation of Hawaii's telecommunications industry to attract new investment and jobs and to give Hawaii consumers better services and lower prices through competition. The benefits to Hawaii's people are already clear.
Another milestone was the Legislature's passage of the $600-million Hawaiian Home Lands settlement which I strongly supported. The $30 million a year for 20 years will correct an old injustice and avoid costly court cases. It will build homes for Hawaiians who have waited for years, boosting the home building industry and freeing up more affordable housing for others in existing communities.
Our most important accomplishment in the past year and a half, however, is coming to grips with the worst fiscal crisis in State Government history.
My Administration tackled a projected budget shortfall by restructuring and reducing State Government, and encouraging economic diversity and development for Hawaii.
Both spending and the number of employees grew faster in recent years than Hawaii's economy, which has been going through tough times. That could not go on.
Through these cuts, I have protected education as much as possible, asking the public schools and the University of Hawaii to make much smaller percentage cuts than other departments.
I have urged the Department of Education and University administrators to strive to protect classroom instruction and make their cuts in administrative and other areas.
Education remains my top priority. When times get better, as they will, public education -- as well as the social and health services which have also taken severe cuts -- will be the first to benefit.
Through attrition, a reduction in force and a near-total freeze on hiring, the full-time-equivalent number of state workers in the Executive Branch (including UH and DOE) is 3,000 fewer than when I took office. We are continuing to look for ways to make government more effective and efficient.
We all must realize government cannot be all things to all people. Government should be a "last resort," not the first place people turn when there is a problem to solve or something that needs to be done. For this reason I have encouraged public-private partnerships and volunteerism as ways to make our community all it can be.
We must get rid of out-dated programs as well as services that could be more efficiently performed by the private sector. For example, we have gotten the State out of developing market-priced housing and are working to convince the Legislature to streamline the State's housing agencies.
Crime is a growing concern. For our prison system, we are increasing bed space without spending huge amounts of money we do not have. We are expanding prison drug treatment six-fold to reduce the likelihood that prisoners when they are released will commit new crimes and return to prison because of drug abuse problems.
By moving 300 prisoners to Texas temporarily, we have gained some"breathing space" on our overcrowding crisis until expanded facilities and a new federal prison in Hawaii will give us a more lasting solution. I am insisting on professionalism among guards and instituted a drug-testing program along with criminal background checks.
In human services, we are dealing with the changes in welfare being enacted by Congress in the most humane and compassionate way possible, encouraging self-sufficiency and helping people to attain it.
Restoring public confidence in government is one of the most important goals of my Administration. I continue to insist, by words and by example, on the highest level of ethics in this Administration.
I have felt particular pride in the way the people of Hawaii responded to two Mission Aloha disaster relief drives -- one for survivors of the earthquake in Kobe, Japan, and more recently for the victims of Typhoon Angela in the Philippines. More recently, many state workers and volunteers turned out for Operation Kokua, to help clean up the areas of Leeward Oahu and the North Shore hit by heavy rains and flooding.
Though times have been tough here, Hawaii's Aloha Spirit shined through for these special causes, over and above what money and time our people were already giving to the Aloha United Way and many other charitable causes.
That Aloha Spirit which binds us together is the most important ingredient for a bright future for Hawaii. Keeping it strong in the face of economic and social pressure will continue to be the biggest challenge facing Hawaii's people.
Aloha.
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Before I continue, let us look at where we were two years ago. Then, my administration was brand new. The state was in its worst fiscal crisis ever. The budget submitted to you was not mine. We struggled to find answers to the huge fiscal problems before us. State spending had skyrocketed.
Between FY 1987 and FY 1995, general fund expenditures for the Executive Branch grew from $1.6 billion to $3 billion. A whopping 88.9% or an annual increase of 8.3%! Every state department had grown by leaps and bounds except one, the Office of the Lt. Governor, which I held.
