Posted on: Tuesday, July 13, 2004

EDITORIAL
Private groups that serve public need help

In the best of all possible worlds, the state's budget picture will continue to improve and Gov. Linda Lingle will soon be able to release millions of dollars in special state grants earmarked by this year's Legislature.

But there are no guarantees. And Lingle's decision to freeze, at least temporarily, all of the $2.05 million in private-sector grants must be seen as a sign of what is to come.

When times are tough, one of the first places a governor looks to restrict spending is on so-called "discretionary" items such as state help to private organizations. The trend on so-called grants-in-aid has been down for some time and is likely to continue.

This leads to two courses of action:

The first is that private agencies will have to take the difficult step of weaning themselves, as much as possible, from dependence on state aid.

That was the course of action taken by the Hawai'i High School Athletic Association. It is in the position where state money, if it comes, is now treated as a welcome "extra" rather than an amount critical to the mission of the organization.

Other groups will have to take this pragmatic approach. Budgets should be built around what the organization can reasonably expect to raise on its own.

The second approach is for the private sector to do a thorough and convincing analysis of the services it provides. Oftentimes the rationale for a state grant is that the money supports work that the public sector would otherwise have to handle.

If it can be demonstrated that the taxpayers actually save money by helping out private-sector groups, then the argument for release of the grants becomes persuasive.

As the weeks unfold, Lingle's administration should apply this analysis in as thorough a manner as possible. Where it is clear that the public gains more than it loses by infusing tax dollars into the operations of a private group, the money should be released as quickly as possible.