Cayetano will ask for more cuts

By Jerry Burris
Advertiser Editorial Editor

Ben Cayetano will go out as he came in: faced with huge budget problems and the unhappy reality that there are no easy fixes for the state's enduring money woes.

Later this month, the governor will present his final State-of-the-State message. It will undoubtedly spend some nostalgic time looking back. But it will also dwell, inevitably, on the budget crunch ahead.

In that sense, Cayetano's final speech to the Legislature will be much like his first one — focused rather unexpectedly and painfully on unpleasant budget realities.

Some might think this is simply a reflection of Cayetano's personality. But he has been forced, once again, to deal with realities not of his making.

After he was elected in 1994, Cayetano began sketching ideas for his first State-of-the-State that would set an agenda for his first term. But at the last minute, the governor and his staff got a good first look at the state's books.

The picture wasn't pretty. After years of hearty growth (and robust spending by predecessor John Waihe'e) the state's finances looked bleak. The economy was stalling, and the state government was bigger than the tax base could comfortably support.

So Cayetano spent most of his first speech focused not on grand dreams but on bleak reality. An era of cost-cutting, downsizing and deferred dreams was at hand.

Last year, there was every indication that the final State-of-the-State could go out on a more cheerful note. Economists said we were out of the doldrums and moving steadily into a new period of modest growth. It was to be a time for optimism, and perhaps talk about ideas that have been on hold for much of the past decade. But then came Sept. 11. Old assumptions about the growth of the economy (and accompanying tax revenues) were thrown out the window.

It was, once again, time for crisis budgeting.

The picture Cayetano will paint for lawmakers and the public is not pretty. After years of trimming and freezing, there is not much left to take out of the state budget, he says.

In fact, Cayetano is firmly convinced that the state government is just about the right size, in tune with what the public wants and a relatively good fit for the economy that supports it. But because of Sept. 11, some bitter medicine will be in order.

First off, there will higher "sin taxes" on alcohol. And he will ask once again to dip into special funds, this time the $200 million-plus Hurricane Relief Fund. He will also ask all departments — no exceptions — to slice an across-the-board 1 percent from their budget in 2002 and another 2 percent the following year. And this time, Cayetano said with poorly disguised irritation, the cuts would apply to the Department of Education and the University of Hawai'i as well.

In previous years, Cayetano largely protected education from cuts imposed on other departments. But he complains that the DOE has not responded to these considerations by showing any internal fiscal discipline.

Thanks to Sept. 11, Hawai'i can look forward once again to yet another sober message from Uncle Ben.

Jerry Burris is editor of the editorial pages of The Advertiser. Reach him at letters@honoluluadvertiser.com