Posted on: Thursday, January 20, 2005

By Robert Bunda
Senate President

As we open our session, the national economy is strong and our local economy is enjoying steady growth fueled by tourism, construction, defense spending and agriculture.

But while we here in the Legislature may have reason to feel optimistic, what is the mood of people working to make a living beyond these chambers? Do our immediate concerns over a balanced budget line up in any way with the concerns of parents balancing their family checkbook? Perhaps, in this period of a relatively stable economic outlook, we legislators should look beyond the necessary but predictable legislative agenda.

Perhaps we need to adopt a guiding principle that will unify us in our work this session. A mantra, if you will. One that will help to put our work in perspective and make it more relevant to those who elected us. Let me illustrate it through the story of one individual living here in the Islands. For the moment, let's just call him "M".

"M" is a young local boy who married his high school sweetheart. They have a 6-year-old son, with another child on the way. Both he and his wife have to work full time just to make ends meet. Skyrocketing gas prices only made things worse — and then, last month, their landlord told them he was raising their rent for the New Year. Their food bill is also rising, in spite of trips to Costco and Wal-Mart. They rent an apartment in Leeward O'ahu and have been putting away a little each month to buy a house. They thought that was within reach and started to look at homes in Central O'ahu early last year.

Then home prices went through the roof. With a second child on the way, "M" and his wife were faced with a tough choice: Do they continue to dream of owning their own home, or begin the long task of saving for college tuition?

And that's where we have to leave them. It's an unfinished story that will not attract much attention, nor grab headlines. It never does. It's a story that's not dramatic enough. It is not tragic. It is not heroic. In fact, you could almost say it's downright mundane. But you know what? It's a story we can all empathize with and one we all share. Because the story of "M" is the story of "M"ost of us.

We are the great majority — the "middle class." It's a story whose time has come. Whether we are talking about the carpenter building a home in Mililani or the office worker in Lihu'e.

We (all) have bills and taxes to pay, most of us have to save to put our children through college, and some of us are paying to support our aging parents. We are part of the mainstream of middle-class citizens that advocate family values and value community service as a civic duty.

Since the middle of the last century, government in Hawai'i has a history and tradition of looking out for the little guy — the guy on the bottom rung. We have a responsibility and duty to continue to do that, and we will, invoking the best of our traditions in Hawai'i — the aloha spirit.

But something else has transpired here over the last several generations. As a society, we have by-and-large succeeded through the politics of inclusion. Unfortunately, we in government have been slow to respond to the needs of this changing population. A very broad cross section of our population has for a very long time been feeling the pinch — the pinch of being left out of the picture.

Two recent studies show that the majority of Hawai'i's working families is falling victim to an income gap where income levels are not keeping pace with the cost of living.

How can government help, even while we are taking care of those who still need to be brought into our circle of inclusion? For most, education was our ticket to upward mobility.

We must continue our efforts to put more power into the hands of those who have the best working knowledge of the system — the superintendent, who in turn, is able to delegate more authority to principals who ultimately empower our teachers in the classroom.

Government can also help those in the middle by making it easier for them to go to and from work.

Therefore, I am proposing the formation of a statewide transit authority to oversee the development, financing, construction and operation of a mass-transit system in each county.

The shape that the system would take for each island might differ. But a statewide transit authority would provide the financial muscle, coordination and intrastate cooperation that would bridge differences in philosophy and geography, to bring tangible solutions to our communities. With the participation of each county, the transit authority would provide the forum and bear the ultimate responsibility for finding transportation solutions for each island.

Whether it's rail or otherwise, there is one thing that we all know: Our traffic woes will not remain status quo, and neither can our response.

Perhaps our greatest challenge is to provide adequate housing for our people, particularly our middle-class families.

In the long run, the price of a home is a function of supply and demand. Here in Hawai'i, with a scarcity of land, we are essentially talking about supply. That is why we need to look closer at how we make lands for home construction available, even as we provide safeguards to protect the natural beauty of these islands.

In 1978, the people of Hawai'i approved a constitutional amendment to preserve and protect agriculture. All lands were categorized or zoned, based on its most appropriate use. A Land Use Commission was established to oversee land use issues. But times and this state have changed, and so have the needs of our families.

Is the Land Use Commission functioning in the best interest of our people today? Do some of its functions belong more appropriately with the counties? I think it's time for a major and comprehensive review, to look for better ways to provide housing for our people while protecting the 'aina.

Finally, I firmly believe we need to review the tax burden of our citizens in the middle.

The Tax Review Commission is mandated to periodically review our overall income tax structure. In its report to the Legislature in 2002, the commission again recommended increases in both the standard deduction and personal exemptions.

As the commission critically stated, our state income tax brackets are so compressed that people on public assistance pay income taxes while the highest marginal rate for married taxpayers filing jointly begins when their taxable income reaches $80,000.

Today, the median income of a family of four in Hawai'i, with both parents working, is around $70,000 a year. If that same middle-class family earned a mere $900 more a month, they would be taxed in the same bracket as a family with an annual income of $900,000.

This is simply not fair. Maybe it's time for a tax cut for the middle class. Maybe it's time to review the entire system.

By adjusting the brackets upward, we would not only bring our tax laws more in line with economic realities in Hawai'i, but it could also provide long-term tax relief to our middle-income families.

This brings me back to my point at the beginning of this speech — the mantra that should guide us in our decision-making. We need to grow and protect our middle class.

If we don't address all of these needs — the needs of the majority — we in Hawai'i will become increasingly a society of haves and have-nots.