ISLAND VOICES
Fund debate hiding real dilemma

By Ed Case

Ed Case, a Democratic representative from Manoa, is a candidate for governor.

Instead of focusing on hurricane relief money, let's look at the state's ailing budget.

In his March 10 article, Gov. Ben Cayetano takes me, the other gubernatorial candidates and many of my legislative colleagues to task for opposing use of the Hawai'i Hurricane Relief Fund to bail our state budget out of its current deficit.

Cayetano dismisses potential cost-containment alternatives as unrealistic or undefined or "politically driven" and, in doing so, joins those of my colleagues who, unwilling to consider, much less make, those clearly difficult decisions, preach that "we have no choice" but to use the hurricane fund.

First, let's recognize this interchange as but a symptom of a much larger, in fact the largest, policy debate facing us all today: How to achieve a sustainable equilibrium between the cost of our government and the ability of our economy to support it. Put another way, the question we face is whether overall costs should adjust to available and sustainable revenues, or revenues should be produced to sustain costs.

Any family, organization or business knows the answer to that. Nor is it a partisan choice: for Democrats like me and those of other parties concerned, in the governor's words, with "our needy, our poor and the education of our children," the reality is that we won't be able to deliver over time without that equilibrium. Yet for most of the last decade, and certainly continuing into this hurricane fund debate, we have suffered from the basic approach of fitting revenues to expenses rather than the reverse.

The governor, to his lasting credit, saw this dilemma early on and advanced economic revitalization and government efficiency and cost containment policies aimed at long-term sustainability. While much of that is unfinished business, he has now concluded that government is the right size and has adopted the revenue generation approach because revenues are not sufficient to support that government.

I respectfully disagree with that approach, whether it be transferring the relief fund reserve, or an additional $100 million-plus in special funds, or part of our rainy day fund, to the general fund, or stretching out contributions to our government employees' pension fund, or refinancing state debt solely to reduce but extend annual repayments, or raising taxes, or any other proposal with the same underlying purpose. In my mind, pau already; we have to get our state budget on a more even, sustainable keel. And we also have to remember that the proposed use of over $200 million in relief fund and special funds is a one-shot deal: next year we would have the same expenses but those resources would be gone forever.

It is fair for the governor to say to those of us who want government to live within its means: well, then, show me how you'd do it. He is also right to call out those candidates who offer false hope for sound-bite silver bullets not entailing hard, politically difficult decisions, like Lingle's "we-don't-have-to-raise-revenues-or-reduce-costs-to-balance-our-budget" or Harris' "we-can-do-it-just-through-efficiency-and-attrition" approaches.

In truth, there are a plethora of alternatives available, a mix of continued economic revitalization in the private sector and, within government, increased efficiency, judicious privatization, attrition, vacant position elimination, temporary and government-wide salary reductions, the prioritization of government to its core functions, and, yes, let's be honest, the inescapable reduction of some non-core programs and personnel.

All that is lacking is the imagination, the will, the commitment to acknowledge and pursue these alternatives. Unless and until we firmly reject use of the hurricane relief fund and other short-term revenue generation approaches, we will not turn our collective energies toward the long-term sustainability of state government and the invaluable programs it delivers.