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The Honolulu Advertiser
Posted on: Sunday, October 27, 2002

Taxes, spending, growth advanced on her watch

 •  The Hirono record: Labor, consumer advocate tries to connect with business

In more than 20 years in public office, Mazie Hirono, a Democrat, and Linda Lingle, a Republican, have established themselves as intelligent, driven and pragmatic politicians. They have also established clear records that reveal their contrasting approaches to leadership and problem-solving. Advertiser Capitol Bureau Chief Kevin Dayton, who has covered both candidates for more than four years, reviewed the records of their time in office and wrote these reports, which offer insight into what they value, how they lead and whether their public statements match the record of their actions.

By Kevin Dayton
Advertiser Capitol Bureau Chief

In an effort to cut Republican Linda Lingle down to size, the Democratic Party has dug into Lingle's record as Maui mayor, alleging that she borrowed too much, spent too much and shortchanged the environment.

If they say Maui finances ended up in a mess, it's "a lie or a damn lie," said Linda Lingle.

Eugene Tanner • The Honolulu Advertiser

Clearly stung by the Democrats' attacks, Lingle summoned her former finance director, budget director, Maui business leaders and others to vouch for her abilities and record at a press conference on Friday.

"When our opponents attack us on the Maui record, the people of Maui feel they are being attacked because the record we established was indeed a partnership, a wonderful partnership," Lingle said. "It really was all of us working together to make our community the very best that it could possibly be."

As mayor of Maui from 1991 to 1999 and Republican Party chairwoman for almost three years, Lingle demonstrated clear budgeting and organizational prowess, guiding Maui as its chief executive though what Lingle said was the "worst recession in Hawai'i's history."

But she did borrow and spend more than previous mayors, raised service fees and gas taxes significantly and departed as mayor at a time the county faced slowing revenues. Maui Mayor James "Kimo" Apana increased property taxes in his first year in office after Lingle left, a step that Apana's staff said was necessary to bring revenue back in line with spending.

Lingle, 49, contends the property tax increase was unnecessary, and cites bond rating agency reports that praise Maui for its "low debt levels" at the end of her administration.

The picture that emerges from Lingle's past is one of a pragmatic politician who isn't rigidly confined by a particular philosophy such as the environmentalists' anti-development riff, or even the anti-government sentiment of some of her fellow Republicans.

She has a history of picking positions when they worked, such as opposing specific, unpopular developments on Maui as a council member in the 1980s, positions she later acknowledged helped her to win a 1986 council race that was critical to her career.

Yet as mayor, she backed the controversial extension of the Kahului Airport runway — a stand that angered many environmentalists — and notes with pride that she dramatically increased county spending on tourism promotion to attract more visitors to Maui.

At times, she has been highly critical of the size and cost of state government, but she allowed Maui County government to grow substantially when she was mayor. In a little-known bit of irony, it was Lingle who led the drive to establish a Maui County after-school care program, which former Gov. John Waihee later acknowledged was the inspiration for the state's enormously successful A-Plus program.

'Slow-growth' advocate

At the 2000 Republican National Convention in Philadelphia, Linda Lingle and state Rep. Barbara Marumoto join the rest of the delegates in singing of the national anthem.

Associated Press library photo • July 31, 2000

Lingle, who was elected as the county's first woman mayor and the county's youngest mayor ever at age 37, had a long history as a "slow-growth" advocate when she was a council member from Moloka'i and later from Maui.

Her political ascent in the 1980s happened at a time when Maui's economy and development were overheated, and restraining runaway growth on Maui was a popular pitch to make to residents alarmed by the clogged roads and the pace of change in their community.

As mayor, Lingle signed a two-year moratorium on construction of new hotels in south and west Maui in 1991, and announced the same year she did not want county staff to even consider new applications for new resorts for at least three years until the county could sort out its problems with overburdened roads and sewers.

That was hardly an economic catastrophe, because Maui already had almost 19,000 hotel rooms when Lingle was elected mayor, and the county had been leading the state in economic growth for more than 15 years.

Lingle points out that Maui County led the state in job creation during her time as mayor, with the average monthly wage and salary job count increasing by more than 15 percent from 1990 to 1998. Statewide, the job count increased by only two-tenth of 1 percent during the same years.

The job growth in Maui was led by hotels, which increased their employment by more than 19 percent, as well as in retailing and government. The state, federal and local government average job count also increased by 31 percent from 1990 to 1998.

Meanwhile, manufacturing, finance and agriculture on Maui all lost jobs during those years, and the construction industry went into a huge decline.

One economic indicator that tends to contradict the Lingle pitch is the unemployment rate: The average annual unemployment rate in Maui County was higher than the state average every year that Lingle was mayor.

Even excluding Moloka'i and Lana'i and considering Maui alone, the unemployment rate there was still higher than the state average each year Lingle was mayor, according to state labor statistics.

As the state economy stalled in the early 1990s, Lingle contends her helpful relationship with the visitor industry and the Maui Visitors Bureau and the "can-do" attitude of her administration helped the county to weather the rough times.

Others noted Maui's specialty is high-end tourism, which tends to be a more stable market and has insulated Maui somewhat from some of the economic shocks that have jolted the rest of the state.

Tourism promotion

Lingle shares a word with Gov. Ben Cayetano at his second gubernatorial inauguration. Democrat Cayetano won re-election in 1998, defeating Republican challenger Lingle by a slim vote margin.

Advertiser library photo • July 12, 1998

Lingle points with pride to her efforts to increase spending on the Maui Visitors Bureau for tourism promotion as evidence of her credentials as a business booster, with spending on the bureau increasing from $270,000 in 1991 to $3.3 million in 1998.

"Her administration was very much in the proactive stance in making sure the county was economically sound, and had the foresight really to look to future years in regards to where we were now and what we wanted to be," said Marsha Wienert, executive director of the Maui Visitors Bureau.

In her campaign for governor, Lingle has proposed tax cuts and notes with pride she also cut property taxes as Maui mayor. She doesn't generally mention that she also increased fees for services.

She told a business group earlier this year that while she was mayor of Maui, "over an eight-year period, in fact, our budget grew substantially because our economy grew substantially, while taxes on both residential and commercial properties decreased during those eight years."

The history is more complicated than that. At the outset of her administration, Lingle indeed proposed and the council approved cuts in residential and commercial property tax rates, but the county still collected more money from property taxes the following year because property values had increased so rapidly.

The property taxes owed on any given parcel generally increase as the value of the land and structures increase. Maui property tax collections did not begin to drop off until fiscal year 1995.

Lingle and the council disagreed for years over another property tax cut, the so-called "Max Tax" program. That measure was initiated by the Democrats on the Maui County Council to roll back tax assessments to 1987 levels for owner-occupied properties, which had the effect of reducing the amount of taxes owed on owner-occupied homes.

Lingle allowed the program to take effect without her signature. The problem, she said, was that freezing assessments was unfair to newcomers to the county, who could not benefit from the program. The newcomers had to pay more because their assessments would be higher than their neighbors' frozen assessments.

When the council wanted to extend the Max Tax assessment freeze in 1994, Lingle vetoed the measure, and the council overrode her veto. The following year, Lingle and the council agreed to a new "circuit breaker" scheme that limited the total property tax bill to no more than 3 percent of a taxpayer's gross annual income.

Critics point out that Lingle repeatedly increased county fees for various services, a practice that Republicans often say amounts to the same thing as a tax increase.

Lingle approved a 22 percent water rate increase in her first months in office, and in the years that followed approved new sewer connection fees, a new impact fee for water meters, higher tipping fees at county landfills, higher greens fees at county golf courses, and higher vehicle registration fees. She also boosted sewer fees twice, and increased the county gas tax twice.

Lingle said she was elected mayor at a time when the resident population had increased dramatically and the number of visitors increased as well. The county faced enormous backlogs in needed work in the sewers and landfills, and Lingle said business leaders agreed to higher fees to catch up on the necessary work.

Maui County finances

This year's campaign has offered many opportunities to meet supporters, such as at this Republican fund-raiser in Kane'ohe.

Associated Press library photo • Aug. 20, 2002

Some of Lingle's opponents have suggested she left Maui County finances in a mess and overburdened with debt, but Lingle calls that "a lie or a damn lie."

As proof, she cites reports on county finances by bond rating agencies such as Moody's published after the end of her administration that praise the county's "low debt levels and conservative financial management."

Lingle did increase borrowing and spending for the county, increasing spending on operations by 98 percent to $178 million in 1998.

From 1990 to 1998, county spending more than doubled in almost every category of county operations, including social welfare, sanitation, culture and recreation debt service.

The year after Lingle left office, incoming Apana struggled with a $7.9 million operating deficit. Apana, who is in the midst of a reelection campaign, did not respond to requests for an interview for this story, but in his annual financial reports, he primarily blamed the state for the county's money problems. The state had reduced Maui County's share of the hotel room tax at the same time county property taxes also dipped, which aggravated the problem.

Apana cut spending and increased property tax rates to make up the difference, and again increased tipping fees and sewer fees.

Wesley Lo, Apana's director of the Maui Department of Finance, said that while Lingle didn't cause those problems, she knew they were coming and could have done more to react. The reduction in hotel room tax payments from the state was phased in over two years, which gave the counties time to either cut spending or find another source of money, he said.

Instead, Lingle's budgets, in effect, dipped into the county's "savings" to cover the difference as county revenue lagged behind expenses in 1998 and 1999, Lo said. Lingle also continued to increase county borrowing, which increased the debt payments that the county has to make, he said.

"It's easy to be an armchair quarterback, but when your revenues are dropping and your expenses are going up, would I borrow more? I don't know," Lo said. "It gets you through some (tough) times, but I don't know. There probably would be arguments on both sides on whether it's a prudent thing to do."

Lingle increased the county debt by 103 percent to almost $224 million from 1990 to 1998, which was the largest percentage increase of any county during those years. Honolulu increased its borrowing by 94 percent during the same period, and the state increased its borrowing by 71 percent.

Lingle's political pragmatism can be confusing at times, and even some of her supporters can be forgiven for being confused about where she stands on some of the touchiest issues.

The most obvious example is Lingle's position on growth in government, which has shifted over the years. In recent weeks, she has reminded audiences of her promise that she will not impose public worker layoffs, and complained that union activists are falsely predicting there will be layoffs if she is elected.

But during the 1998 campaign, Lingle told The Advertiser in a written response to questions that she would cut the size of state government. She added: "Before determining specifically where and how much to cut, we first need to determine what we want to achieve, and then we must set priorities."

A few months later, she reversed herself in an interview, saying state government would probably grow if she became governor.

In the years that followed, Lingle sometimes suggested or outright stated she would cut state government, such as in a 1999 mailer to Republicans. In that flier, Lingle — then head of the statewide party, praised GOP proposals aimed at "reducing the number of government workers through attrition."

But when Lingle unveiled her blueprint for the state earlier this year, she again said she expects state government would grow if she wins the election. She noted county government did grow while she was Maui mayor, but said the economy grew as well "so we were able to support it."

"We moved heavily into community policing on Maui, we were able to take advantage of federal funds in a very big way, we built new fire stations in Kula and in Hana, built three new 50-meter swimming pools, built a new 200-acre park," she said. "So, that is not less, it's more, but it came about because our economy was growing."

The total number of permanent and temporary Maui County employees increased by about 47 percent in the Lingle years, jumping from about 1,500 in 1990 to about 2,200 in 1998, according Maui County Comprehensive Annual Reports.

Working with Democrats

When people question whether Lingle can work with a Democrat-controlled Legislature, Lingle likes to point out that she worked successfully with a Democratic county council for years as mayor. But Lingle tends to gloss over the sometimes bitter disputes she had with that council.

At the outset of her first term as mayor, the council rejected her appointments to the offices of prosecutor and corporation counsel, triggering a drawn out dispute in which Lingle retained the two rejected appointees in those jobs for months. That led to a new dispute over whether Lingle could leave those officials in office after the council had rejected them.

The council also accused Lingle of firing a lower-level county lawyer for campaigning for Lingle's opponent, Elmer Cravalho, and rejected one of Lingle's appointments to the county water board. The council also refused to allow Lingle to appoint her then-husband, William Crockett, to the charter commission. And that was just the first year.

A critical part of the Lingle pitch this year is her promise to restore integrity and confidence in state government, but her opponents have also tried to find some soft spots there.

In one issue that was highlighted in both the 1998 campaign and in Democratic Party ads this year was Lingle's decision to hire Crockett, her husband at the time, to defend her in a lawsuit filed by a fired county employee.

Crockett was paid $77,000 in county money. In 1996, the state Supreme Court said the hiring was illegal because Lingle didn't get council approval to hire Crockett and another attorney who represented other defendants in the case.

Lingle denied any wrongdoing, saying her corporation counsel told her she could hire a lawyer without council approval, and said her husband was the best available lawyer to represent her.

However, during the 1998 campaign Lingle conceded she had made a mistake, citing "the perception that it gives the public, and I think perception is very important." Lingle and Crockett have since divorced.

Lingle's relationship with environmental activists is a testy one, largely based on the belief that she has cut corners and ignored regulations to get what she wants.

Lingle said she has a very good environmental record, noting her work to close landfills, increase recycling and her administration's purchases of hundreds of acres of beach land and other lands to add to the county parks inventory. She said groups such as the Sierra Club Hawai'i Chapter and the Hawai'i Coalition of Conservation Voters haven't judged her record fairly because they are too close to the Democrats. But the leaders of those organizations say they oppose Lingle because of her record.

Steven Montgomery, a member of the league's steering committee, said Lingle's support for the Kahului runway extension "is one of probably 30 issues where she lost the support that she enjoyed initially as a councilwoman from Moloka'i." The effort to extend the runaway was finally abandoned by the state and county after years of litigation and opposition by environmental groups.

The development of the Maui Ocean Center and Ma'alaea Harbor Village, when huge amounts of sediment washed in Ma'alaea Harbor, is a particularly sore point.

County officials have acknowledged the developer was ill-prepared to prevent runoff and did not comply with restrictions of a special management area permit that limited grading. Boat owners complained that runoff from the project in 1996 and 1997 dumped more than two feet of silt in the harbor.

Environmentalists said the Lingle administration was responsible for enforcing the terms of the permit special management area permit, but county officials countered it was the state that should have stopped the erosion by enforcing provisions of a discharge permit the state issued for the project.

The complaints about the runoff went to the county Department of Public Works, which had issued the grading permit. That department was headed by Charles Jencks, a Lingle appointee who was a limited partner in the Ma'alaea Triangle Partnership, and therefore had a financial stake in the project.

Jencks has said he instructed his staff to handle the project as they would any other, and Lingle has said she saw nothing wrong with Jencks' involvement. However, the whole incident left a lasting impression on environmentalists, Montgomery said.

"Lingle was aware every step of the way what was going on but sat on her hands," Montgomery said. "That's the most notorious example, I believe, because it's so obvious to everyone, so graphic."

After leaving office, Lingle spent the last three years rebuilding the Hawai'i Republican Party, using her contacts and supporters from her unsuccessful 1998 gubernatorial campaign to turn the GOP into a truly grassroots organization.

Even her critics admit the effort was impressive. To give just one indication of her success, as of last week Lingle estimated she had attracted campaign contributions from 10,000 people in Hawai'i, many of them small donations.

Building up that kind of an organization took an extraordinary amount of work, said Micah Kane, chairman of the Hawai'i Republican Party. Kane recalled Lingle's long series of precinct-level meetings in 1998 and 1999, when "if there were two people interested in our effort, we went out and talked with them."

"I think her strength was her ability to maintain our base and to grow our party and to welcome all ages and all ethnicities," he said.