Legislature cuts down governor's stimulus plan

By Kevin Dayton
Advertiser Capitol Bureau Chief

Gov. Ben Cayetano's plan to allocate nearly $1 billion for new construction projects to stimulate the state economy is in deep trouble, with both the Senate and House planning to spend considerably less than half that amount.

Senate Ways and Means Chairman Brian Taniguchi said yesterday the Senate plans to earmark less than $400 million for new building because senators believe enough money has been set aside for state projects.

Cayetano asked lawmakers this year for authority to borrow and spend $952 million on new construction, including $321 million on public school construction. He argued state construction spending is the best way to directly create good-paying jobs and boost an important sector of the economy.

"It would be unfortunate for them not to take advantage of the low interest rates to bring our older schools up to par, and to build educational and other state facilities that are important and that the state would end up building anyway," Cayetano said last night through a spokesman.

Taniguchi, D-11th (McCully, Mo'ili'ili, Manoa), said lawmakers put up almost $500 million for state construction in the regular legislative session of 2001; another $100 million in the special session last fall; and are on a course to offer up another $400 million this year, for a total of about $1 billion.

"There's limitations on what you can do," Taniguchi said. "The construction base is not that big, either. You can have a lot of projects, but if you have a lot of projects and you have less contractors, the bids are going to go up."

As an example, Taniguchi cited administration requests for additional money for telecommunications upgrades in the schools. He said there is a limited number of contractors in the state who do that kind of work and plenty of money has already been set aside to keep them busy.

"Even though all the schools could use it, they just couldn't do it," Taniguchi said.

The House has approved a draft of the state budget that sets aside only $340 million for new state construction, or about a third of what Cayetano proposed.

House lawmakers said they are worried the state may be taking on too much debt, which would limit lawmakers' options after Cayetano leaves office late this year.

House members rejected Cayetano proposals to spend $142 million on a new campus for the University of Hawai'i at West O'ahu, and cut the administration request for school and library repair and maintenance spending in half, to about $160 million.

By contrast, Cayetano said California lawmakers are advancing a $25 billion bond issue that would be used to build schools, affordable housing and other projects.

"That is an example of bold thinking and leadership," he said.

The Ways and Means Committee has not yet disclosed which projects will be included in the Senate's proposed construction budget. The committee is scheduled to give preliminary approval to its budget Wednesday.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com or 525-8070.