STATE OF THE STATE
Lingle seeks 'modest' gains in tight budget

By Gordon Y.K. Pang
Advertiser Capitol Bureau

Gov. Linda Lingle set a "modest but significant, common sense" agenda for her administration in her State of the State address before the Legislature yesterday.

Gov. Linda Lingle delivers her first State of the State address, with House Speaker Calvin Say, left, and Senate President Robert Bunda seated behind her in the Capitol. Lingle covered topics ranging from education to taxes. Richard Ambo • The Honolulu Advertiser

The 50-minute speech, which was interrupted by applause more than 20 times, also touched on a broad range of other issues, including support for Senate President Robert Bunda's plan to subject public school students to drug testing, as well as a proposal to give free prescription drugs to the most needy.

One key proposal is to raise the standard deduction to help those families and individuals who can least afford to be pay taxes, according to Kurt Kawafuchi, deputy taxation director.

Kawafuchi said a married couple with two children making $30,000 or less would save $147 annually by 2006, the third year of the program; a married couple with no children and income of $25,000 or less would save $147; a single parent/head of household making $22,000 or less would save $131; and a single person making $20,000 or less would save $72.

Lingle said 18,000 would no longer need to file state tax returns and 44,000 would no longer need to itemize deductions in the first year. Those numbers would grow to 27,875 and 69,624, respectively, in the third year, said Budget Director Georgina Kawamura.

She said the plan would cost the state about $9.7 million in lost tax revenue in fiscal year 2005, its first year of implementation; then $15 million in 2006, and $20 million annually in 2007 and beyond.

Said Lingle after her speech: "It was affordable and it got at the heart of who I wanted to help, the people who are having the toughest time. They're wage-earners but still struggling."

Another economic initiative proposed would "level the playing field for private health insurance companies by eliminating the 4 percent general excise tax on their policies," Lingle said during her speech. Such a system would allow new healthcare providers to enter the marketplace, she said. HMSA and Kaiser Permanente executives, she said, would no longer sit on the board that recommends which insurance companies come into Hawai'i.

Lingle also said she would support the $75 million tax credit for developers seeking to expand resort facilities at Ko Olina, "but only with the binding promise of the developer to fund meaningful training for residents of the Leeward Coast."

Audience members applaud during Gov. Linda Lingle's first State of the State address at the State Capitol. Richard Ambo • The Honolulu Advertiser

On education, Lingle said she supports Bunda's plan to impose random drug testing in Hawai'i's public schools. She said Lt. Gov. James "Duke" Aiona will be in charge of setting up the program.

Lingle told reporters after the address that she intends for the program to be randomly administered among all high school students, with the exception of those whose parents sign written waivers.

No results would be released publicly, nor would a student testing positive be arrested, expelled or suspended. Instead, the parents and the student would be required to meet with a counselor and others.

"It's more of a preventive tool and not something that's punitive," said Aiona, who served as Drug Court judge and a Family Court judge.

Aiona and Lingle acknowledged, however, that there is no money set aside for the program and that they would look to private sources, possibly nonprofit groups, to foot the bill.

Lingle, in a move that raised eyebrows among union leaders, also proposed allowing charter school employees — teachers, secretaries or janitors — the option to join a union, or to form one of their own. "Unlike the present arrangement, they would not be forced to belong and pay dues to any particular union," she told legislators.

That drew a strong rebuke from Karen Ginoza, president of the Hawai'i State Teachers Association, who defended the current system of including charter school teachers as members of her union. Ginoza said HSTA serves as an advocate for charter school teachers during collective bargaining and works with those schools when they want to develop their own contract separate from the one negotiated with the Department of Education.

"It's important that people realize the value of the union and the value of collective rights," Ginoza said. "I can't understand why the governor would come in and speak against that."

Rep. William Stonebraker , R-17th (Hawai'i Kai, Kalama Valley), applauds Gov. Linda Lingle's first State of the State address. Richard Ambo • The Honolulu Advertiser

Lingle also reiterated her call to legislators to allow a ballot in the general election that would ask voters to decide if they want to split the school board into seven local panels.

On health issues, the governor said she has formed a public-private partnership led by the Hawai'i Medical Association and the state's physicians that will provide prescription drugs to the needy, notably 20,000 people annually who don't have drug coverage when they are discharged from the hospital.

Lingle said patients sometimes are forced to stay in the hospital just to obtain needed medication.

Greg Marchildon, executive director of AARP Hawaii, an organization representing retirees, was disappointed with the proposal. He said it indicates a lack of "understanding (on) how pervasive this problem is in this state."

He added: "This proposal today is not even close to acceptable as far as AARP is concerned."

To encourage people to purchase long-term care insurance, the governor proposed instituting a 30 percent tax credit to be phased in over three years that would cost the state about $2 million annually.

"Long-term care insurance is readily available and often affordable, but relatively few people have availed themselves of this self-help remedy," she said.

Lingle, the first mayor to ascend to Hawai'i's governorship, won praise from her former municipal colleagues by pushing to allow each of the counties to bargain with unions separately.

"Counties should be allowed to establish their own civil service system and chart their own course in collective bargaining," the governor said.

Honolulu Mayor Jeremy Harris said it's not right that the governor and one Neighbor Island mayor, under current collective bargaining law, can determine the pay of police officers on O'ahu, which has the largest law enforcement agency.

"We believe that we should have the autonomy to enter into collective bargaining discussions and make those decisions," Harris said.

Lingle also proposed that, within two years, the counties be given 100 percent of the revenues from uncontested traffic tickets, something mayors including herself have sought for years.

Big Island Mayor Harry Kim said that with a budget as small as Hawai'i County's, return of even a small amount "is really going to help."

Lingle also pledged to introduce legislation that she says will negate influence on public officials by banning golf outings and other gifts which "will be presumed attempts to bribe." She also asked that a law be enacted that would prohibit political contributions from anyone receiving a non-bid contract.

House Majority Leader Scott Saiki, D-22nd (McCully, Pawa'a), said the Democrats' proposal for this session is more inclusive. "It will ban contributions from all government contractors. We will ban contributions and solicitations on government property, we will reduce contribution limits, so we have a number of proposals that the House will be working on because we want to instill public confidence in the system," Saiki said.

Lingle repeated her pledge to work with the Democratic leadership in both houses. "Like it or not, we are in this together, and the rest of the state is watching," she said.

Gordon Y.K. Pang can be reached at gpang@honoluluadvertiser.com or at 525-8070. Advertiser staff writers Lynda Arakawa and Jennifer Hiller contributed to this report.