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The Honolulu Advertiser
Posted on: Wednesday, February 20, 2002

VOLCANIC ASH
Attacking state budget deficit

By David Shapiro

When the Legislature gets around to addressing the state's projected $350 million budget deficit, don't expect serious action to fundamentally reduce the size of government — particularly the public work force.

Gov. Ben Cayetano isn't asking for it. He declares state government "about the right size" and proposes using the $213 million Hawai'i Hurricane Relief Fund and higher liquor taxes to cover the current shortfall.

Lawmakers resist those remedies, but are scrambling for other stop-gap solutions that sidestep the obvious question: If state government is the right size, why has our tax base left us $350 million short of what's needed to pay for it?

It will be a central issue in this year's governor's race, and voters may be surprised by where candidates line up.

Republican Linda Lingle, whose party champions less government, is the only candidate to promise no layoffs of state workers. She sees an even bigger government if the economy grows to support a larger tax base.

Democratic front-runner Jeremy Harris, whose party is maligned for its big spending, promises smaller government as the essential first step to economic growth. He believes smart use of attrition can avoid layoffs, but won't rule out the option.

Lingle says the number of Maui County employees increased while she was mayor, but the economy expanded to pay for it. She sees a similar scenario if she's elected governor.

"I don't want to come in and start eliminating services for people," she says. "I want to have more dental care for children who are not insured. I want to have a lower class size in our schools, which means more employees. On the other hand, it doesn't mean that all of the programs we have now should be continued."

Lingle doesn't trust Cayetano's projections on the deficit. She still smarts from their 1998 campaign, when a deficit of some $250 million at the start of the Legislature turned into a surplus by election time.

"I'd like to see more attention given to expanding the economy rather than how to deal with a deficit that seems to disappear each time," she says.

To Harris, reducing overall government costs is the only way to free money to stimulate private investment and improve education.

"I don't think you can grow the economy without downsizing government," he says. "You can't offer a high-tech economy unless you invest in education."

Harris says that as mayor of Honolulu, he has used attrition to reduce the city work force without layoffs. He sees similar opportunities to trim state costs.

"If you look at the state, there's a lot of low-hanging fruit," Harris says.

All candidates for governor see civil service reform and privatization of some services as keys to improving state efficiency without layoffs.

Democrat D.G. "Andy" Anderson thinks government needs to be smaller, but that displacing state workers in this weak economy would only increase pressure on social services.

He says the real solution is to expand the tax base by attracting new investment — primarily from Asia. "There aren't enough dollars in this tax base to pay for the obligations politicians have committed to."

The two dark-horse candidates, Democrat Ed Case and Republican John Carroll, are the most aggressive advocates of reducing government costs and workers.

"None of the options we want to pursue are possible until we face the fact that our government simply costs too much in relation to the gross state product," Case says.

Says Carroll, "I certainly do not rule out layoffs. The number of public employees is far too high."

David Shapiro can be reached by e-mail at dave@volcanicash.net.