Island Voices
State needs systemic change
By Fred Hemmings
Representative of the 25th Senate District (Kailua, Waimanalo)
It appears at just over the halfway point of this legislative session that the majority party is determined to conduct business as usual — that is, to throw more taxpayer money at Hawai'i's problems.
Because the state has squandered money in the past, today there is not enough to go around. Add in unfunded public employee pay raises, and things look even worse. Repeating the same failed formula of government has resulted in our state's 10-year economic malaise. Doing the same this year will get the same result.
At the beginning of this session, Republicans made substantial and achievable recommendations to fix the system. We emphasized five reforms: 1) decentralizing the public school system; 2) changing the way the Department of Accounting and General Services does business; 3) privatization; 4) reducing the state workforce through attrition; and 5) civil service reform. These initiatives have been ignored.
Decentralization of public education saves money and increases accountability. The state has highly paid bureaucrats in its centralized school system, collecting an extra $17 million-plus per year, as near as we can estimate. The Felix Consent Decree is costing hundreds of millions, and nothing has been done to solve the root problems.
The state could enhance its revenue stream by the aggressive collection of monies we are due from the federal government. The best example is the Felix Consent Decree; the law says the federal government can provide up to 40 percent funding, and Hawai'i is only collecting 8 percent.
There is a $640 million backlog in fixing our schools; our investigations tell us that one-third of repair and maintenance monies are spent inefficiently — some $200 million. One example is a school repainting job in my district that cost $210,000 when DAGS did it; when the principal asked a private contractor what he would charge to do the same job, the cost was estimated at $90,000.
We know from examples big and small that with privatization, the taxpayers will get a better deal. Some examples of savings are to set up a private trust for the Office of Hawaiian Affairs and the Department of Hawaiian Home Lands, which would save $7.5 million for each agency.
Completely privatize the hospitals — not the quasi-public structure currently in place — and save up to $15 million.
Such savings, coupled with meaningful civil service reform, would enable the state to save even more.
We can reduce the state workforce through attrition. During the spendthrift 1980s, the state workforce grew by more than 20,000. There is an attrition rate of about 4 percent from the state workforce. With flexibility provided by a reformed civil service system, we could reassign public workers to assure that key positions are filled.
A realistic goal is to cut $500 million from the state budget. Much of state spending is necessary, but too much of it is wasteful.
A complete change in the way state government does business is needed to solve our problems.
Hawai'i's problems are politically induced and partisan. Business as usual is not the problem of the Legislature, but the problem of the majority party monopoly.
Our reforms result in substantial savings and result in putting that money back into the pockets of the working people of Hawai'i through an honest tax reduction.
The Council on Revenues recently projected 5 to 6 percent annual growth over the next several years. In the wake of the national economic slowdown, that growth may not occur and those expected tax revenues will not come in. The Legislature will be spending money it will not have.
Before this session is over, our children, their teachers' salaries and other programs for the neediest citizens will be held hostage — for either a tax increase, gambling or the disappearance of the already-authorized tax cuts.
