Posted on: Tuesday, June 28, 2005

PBS Hawai'i still faces possible loss of money

By Catherine E. Toth
Advertiser Staff Writer

PBS Hawai'i may yet see reductions in money for programs and services with a bill that passed through the House last week, though two Hawai'i public radio stations have so far been saved from federal budget cuts.

The threatened cuts come at a time when the local public TV station, previously plagued with financial woes, was getting back on track, its president said.

"We were getting to a point where we were starting to feel OK," said Mike McCartney, president and chief operating officer of PBS Hawai'i, a private nonprofit entity. "We were starting to streamline things, bring in new programming, and now this.

"I think it's like in any business. It's a challenge we have to go through. ... But it will put a strain on us."

The House rejected a proposed cut of $100 million in the federal subsidy for the Corporation for Public Broadcasting, which helps pay for programming and operation costs for local public TV and radio stations.

Had the cuts been approved, PBS Hawai'i would have lost more than $400,000 of the $906,000 in federal money earmarked for it next year. That amounts to a little more than 7 percent of PBS Hawai'i's total annual budget for 2005-06, at $5.64 million.

Hawai'i Public Radio would have lost about $60,000; KKCR-FM in Hanalei would be down $45,476.

While the restoring of money to CPB is good news for those in public broadcasting, no one is relieved just yet.

"We've danced this dance before," said Michael Titterton, HPR president and general manager. "Historically, the funding gets restored, but nobody can take that for granted."

The House did eliminate $133 million for other public broadcasting programs, including PBS' Ready to Learn, a TV and online service designed to help parents get their children ready for kindergarten. Other cuts were for grants to help stations convert to digital.

The elimination for funding of one grant would particularly hurt PBS Hawai'i, McCartney said: It needs money to upgrade to a system that allows it to receive clear, digital programming from PBS. Without the grant, the station would have to keep its existing system or raise the money elsewhere.

In addition, Ready to Learn has become one of PBS Hawai'i's most successful outreach programs. This year, the station has hosted about 70 workshops, reaching roughly 3,000 parents, preschool providers and children. The money helps pay for the books the program distributes.

"It's a critical program for us," McCartney said. "For us, it's expanding, it's providing the educational element to television."

PBS Hawai'i has already had its share of financial challenges, starting when the station turned nonprofit in 2000.

The change resulted in staffing cuts. The number of employees dropped from about 60 to 34.

Before 2000, the station paid nominal or no rent for 25 years for its facility near the University of Hawai'i-Manoa on Dole Street. For the past five years, PBS Hawai'i has rented the property. But the lease ends at the end of this year.

In 2003, a $500,000 shortfall in its fundraising prompted PBS Hawai'i to cut five staffing positions, including two key producer-directors.

That year, the station spent $2.45 million to purchase a vacant property behind the Hard Rock Cafe. If it can't negotiate a long-term lease with UH to stay at its present location, the station will move to the new lot — and invest about $10 million for a new building.

The station is required to spend $6 million to convert to digital, as mandated by the Federal Communications Commission. (The station has already raised money for the upgrade.)

Money from CPB represents 16 percent of PBS Hawai'i's total budget of $5.64 million. Nearly half of the local organization's funding — $2.4 million — comes from individual and corporate donations. Other sources include grants from community partners, production revenue, cable franchise fees, product sales and royalties, and interest in investment income.

Federal money for public television and radio drops every year, as politicians have designed it to do, Titterton said.

"(Federal support) was designed to jump-start the system, then gradually phase out as radio and TV developed alternative methods of funding," Titterton said. "(Cuts) would not have been fatal to us, but would have really hurt smaller stations."

John Thorne, a longtime supporter of PBS Hawai'i and HPR, figures he'll have to contribute more if he wants to continue listening to "Morning Edition" and watching "The Nightly Business Report."

"They're the only places where you can find out what's really going on in the world," said Thorne, 72, who first heard about the proposed budget cuts on HPR last week. "If it was between me and other individuals to save the essential programming, then yes, I'd give more."

Reach Catherine E. Toth at ctoth@honoluluadvertiser.com or 535-8103.