Thursday, January 18, 2001
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Posted on: Thursday, January 18, 2001

Partisan rivals come out swinging

Lawmakers set out agendas as session opens
Hawai'i's grandest free lunch is back

By Kevin Dayton
Advertiser Capitol Bureau Chief

Alert listeners in the audience at the opening of the Legislature yesterday could be forgiven for scratching their heads in confusion. The politicians addressing the crowd seemed to contradict each other on even the most basic facts and figures.

For example, House Minority Leader Galen Fox, R-21st (Waikiki, Ala Wai), complained that during the 1990s in Hawaii, the "state payroll ballooned" by about 25 percent."

House Majority Leader Marcus Oshiro, D-40th (Wahiawa, Whitmore Village), countered minutes later that over the past several years his fellow Democrats had approved "unprecedented tax cuts" and "except in the area of schools, we have cut the cost and size of government."

Come again?

Fox was in the ballpark on the growth in state payroll. According to U.S. Census data, monthly state payroll grew from $122.3 million in October 1991 to $148.3 million in March 1999, an increase of about 21 percent.

Fox said his data from the state Department of Labor and Industrial Relations compared payroll in 1989 to 1998, and showed an increase of 23 percent.

As for Oshiro’s arguments, legislators did indeed adopt the largest income tax cut in state history in 1998, followed by a more modest trim of the excise tax in 1999. Budget experts estimate those tax cuts will reduce total state tax collections by more than $1.8 billion from 1999 to 2005.

But Oshiro’s argument that Democrats cut the cost and size of state government in areas other than education is more complicated.

According to Gov. Ben Caye-tano’s proposed 2002-2003 budget, the state general treasury will spend a record $7.5 billion over the next two years. That would hardly appear to be a "cut" in the cost of government.

But Oshiro’s point was that lawmakers reduced the size of state government except for education, which grew. And that appears to be true.

Census data shows state employment increased from 52,615 full-time equivalent positions in March 1998 to 53,363 in March 1999, the most recent year for which statistics were available. But when the elementary and secondary educational employees are taken out, state employment actually dropped slightly from 23,798 full-time equivalent positions in 1998 to 23,537 in 1999.

A full-time equivalent position is a unit used to count employees. One position may be one employee working 40 hours a week, or two or more employees working a total of 40 hours combined.

This isn’t the first time Fox and Oshiro have argued. Fox charged on the floor yesterday that Hawaii residents "pay the nation’s highest state and local taxes combined."

When Fox made similar comments at a press conference last week, Oshiro distributed a biting statement denying the charge.

Oshiro cited recent survey data from the Wisconsin-based Runzheimer International that found Honolulu’s tax burden ranked 42nd in the nation for metropolitan areas. However, the Runzheimer report includes federal taxes along with state and local taxes in its calculations.

According to the Tax Foundation, Hawaii’s state and local tax burden is the third highest of any state in the nation when measured as a percentage of per capita personal income income. The foundation found Hawaii residents spent 12.5 cents of every dollar of income on state and local taxes, with only Maine and New York spending larger shares of their incomes on state and local taxes.

When federal taxes are figured in, Hawaii’s ranking drops to 27th in the nation, the foundation said.

Advertiser staff writers Ronna Bolante, Lynda Arakawa and Scott Ishikawa contributed to this report.

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