Budget criticism unfounded
By Linda Lingle
Governor of Hawai'i
Rep. Brian Schatz recently criticized my management of the budget, contending that a recent increase in forecasted revenue has proven my call for fiscal restraint to be unnecessary and maybe even counterproductive ("When the wolf is not at the front door," Sept. 24).
I would not bother to comment if the writer had simply shared his opinions. In this case, he also misstated facts and the law.
He wrote that "(the governor) predicted a $200 million run of red ink for the state," but "(her) forecast turned out to be wrong."
Governors do not forecast revenues. That is done by the Council on Revenues, an independent panel of experts, as provided for in our state Constitution.
The representative says it makes little sense to use the council's revenue projection, which he says is based on "an old model" that is "cumbersome and antiquated" and of "questionable validity."
Never mind that the council is filled with experts who have impressive credentials, and that Rep. Schatz lacks any such credentials.
The fact of the matter is that the council has been empowered by our Constitution to project revenues, and Schatz has not.
In May of this year, the council lowered its official projection by $187 million. Less than two months earlier, it had made a $119 million downward adjustment. That put a huge hole in the budget that could not be ignored.
I immediately extended a hiring freeze and spending moratorium, and ordered departments to consider and develop cost-cutting proposals in case the projections turned out to be right. I also held the line on pay increases for most public workers, including members of the HGEA, UPW, HSTA and UHPA.
Rep. Schatz contends that I should have responded differently. He describes the council's projections as based on "doom and gloom," and implies that I should have acted as if the downward adjustments had not been made.
I believe it would be irresponsible for a governor to ignore the Council on Revenues. And, lacking any evidence contradicting the council's projections, it would have violated the law.
The representative went on to say that my brand of fiscal conservatism is hurting the economy. I respectfully disagree.
The economy appears to be picking up steam, and I believe that is partly because investors and businesses value fiscal restraint on the part of our administration. I am proud of my role in holding the line on spending, and also in stopping the Legislature from increasing the general excise tax or raiding the Hurricane Relief Fund.
Reading the representative's critique of how I am managing the budget, I am reminded of a quote from Gov. Ariyoshi: "Although both the governor and Legislature have constitutional responsibilities, my 13 years as governor taught me that most of the burden of fiscal integrity inescapably falls on the governor ... I was left with a deep impression that many well-meaning legislators can become intoxicated by spending."
The state's recurring expenditures have exceeded recurring revenues for years. The Legislature managed to do this by incurring unfunded liabilities, raiding special funds, failing to fully fund the state Employees Retirement System, and utilizing various other means of borrowing against the future.
The bill that will be handed to future generations has been growing by leaps and bounds.
In fiscal year 2002, the state's recurring expenditures exceeded its recurring revenue by $215 million. Fiscal discipline brought that number down to $17 million for the year just ended, and I am determined to eliminate it completely.
Families and businesses must live within their means, and the state is no different.
Someone in state government has to be responsible for what Gov. Ariyoshi called "the burden of fiscal integrity." That's what the people elected me to do, and I accept the responsibility.
As another former chief executive liked to say, "The buck stops here."