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The Honolulu Advertiser

Posted on: Tuesday, March 26, 2002

Economic stability does not bail us out

Is this good news or bad news?

The state Council on Revenues says our economy is steadying so there is no need to make further downward revisions in its projection of how much the state will collect in taxes this year.

That's good news from the standpoint that it suggests this particular panel believes our economy has bottomed out and is once again on the upswing.

But it remains bad news for state lawmakers who are trying to fill a $300 million hole left in the budget by the last council projection, which came right after Sept. 11.

In effect, about all the council has said is that the state's red ink isn't likely to get worse for the foreseeable future.

If anything, the latest council report should put to rest any thought about simply waiting things out. If, for example, the council had revised its projections upward, you can bet some lawmakers would conclude that a rising economy will take care of our budget problems.

It won't. This budget must be written to reflect this economy, which is virtually flat. Legislative leaders know the budget must be balanced. The most honest way to achieve that balance is to use today's numbers and today's resources rather than relying on assumptions about the future.

At the moment, Republicans and Democrats are engaged in a sideline battle about whether the state budget has grown or shrunk over the past several years. The GOP makes an interesting point that jobs in the private sector have decreased over the past decade while the number of people working for state government has increased. That suggest a disjoint between the overall economy and the size of the state budget.

But Democrats point out that most of the growth has been in federally mandated slots and in regular classroom teachers. Take out education, they say, and the budget has actually shrunk.

All of this makes for fascinating debate. But the real work lies ahead: Deciding what taxes or fees will be increased and what state services (not abstract percentages, but real jobs performed by real people) will have to be eliminated.

Those are tasks that cannot be accomplished with rhetoric.