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The Honolulu Advertiser
Posted on: Sunday, July 20, 2003

EDITORIAL
Tax-and-spend dispute should wait until Sept.

The trouble with across-the-board spending restrictions is that they are not equal-opportunity pain inflicters.

That is, some restrictions can be accomplished without major impact on the social health of the community while others cause direct pain and long-term costs.

This is effectively the argument of legislative Democrats who are unhappy with Gov. Linda Lingle's 20 percent restriction on non-fixed costs for all state agencies.

Such restrictions have the greatest impact on the least among us — those who receive basic state social and health services. They are also particularly hard on the education system, even if restrictions are limited to so-called "non-instructional" services.

So, it is understandable that the Democrats are fighting like mad to see those cuts restored.

On one side of the table, they overrode Lingle's vetoes of a number of social service programs that were to be paid for out of cash accumulated in the state "rainy-day fund." The override does not force Lingle to restore those items, but it gives her the opportunity to do so if she so decides.

Which brings us to the other issue: the across-the-board restrictions for the current fiscal year (which began July 1).

Democrats, pointing to more robust than expected tax collections for the last fiscal year, say the numbers mean a $152 million shortfall declared by Lingle has disappeared and the restrictions should be withdrawn.

But Lingle administration officials say the higher numbers could be an anomaly, resulting from some shifting dates in the collection calendar as well as other one-time factors.

While on paper tax collections were up 4.3 percent for the year, the actual ongoing tax fiscal income gain was 2.5 percent, Lingle says.

That argument may never be resolved. But as much as we deplore the spending restrictions — particularly in social services and education — we acknowledge that Lingle has a point when she says long-term spending decisions must not be based on short-term tax fluctuations.

Lingle argues a review of spending decisions should wait until the Council on Revenues makes its next forecast in September. That makes sense, because the council is mandated by the Constitution to take a longer view of things.

September is not that far off. And if the council determines at that meeting that the economic picture has truly improved, as Democrats contend, then Lingle should be duty-bound to restore some of the cuts that have been made.