When does Hawai'i's budget shortfall become a crisis?

Here's one answer: When leaders have a shortage of creative ideas and political will for tough solutions, as well as a shortage of tax revenue, that's a true crisis.

Isle residents have been given warning that a looming budget deficit will force the state to tighten its belt. As a slowing economy forces officials to ratchet back on their tax revenue projections, the recent statewide cuts of 4 percent have not cut deeply enough. If current spending patterns continue, the red ink could total $903 million after fiscal year 2011.

Obviously, current patterns can't continue. Department heads have been told to work on contingencies for budget trims of up to 20 percent.

Even with these dismal tidings, Gov. Linda Lingle is leery of throwing the "C" word around: "In leadership, you face these issues all the time," she said last week when the deficit projections became public. "You want to refrain from calling everything a crisis because you get people much too worked up."

She may have a point: People watching economic developments, globally and locally, are worried enough. It's counterproductive for leaders to whip up a panic, which won't help on the journey back to more solid economic ground.

But what would help — and what is the responsibility of leadership — is a roadmap. With two years left in her administration, Lingle does have the opportunity to bring ingenuity to bear on the problem and to tap her networks in the community to devise some solutions.

Lingle said all spending must be prioritized, and she and her Cabinet appear to be working on a plan. Some elements already are evident: The governor called it crucial "that we continue to move forward on capital improvement projects for our state infrastructure and facilities."

That's absolutely correct. Such investments give the economy a shot that's essential, and facilities such as harbors and airports are important adjuncts to tourism and other economic drivers.

The governor must also consider new partnerships among state agencies and the private sector to keep social services afloat. During these difficult times, the safety net for the needy will only become more strained as more family budgets fall short.

She'll have to lay bare the stark situation to public-employee unions. With a hiring freeze already in place, retention of current jobs is at risk. It may take union concessions of pay increases to avert or minimize layoffs.

Lingle has promised to seek outside funds, public and private, to leverage the state's finances. That'll be tough, given that money is short all over, and it will be a show of her mettle to find smart ways to keep public services at a responsible level.

But pulling together all the components of a survival strategy and enlisting the support of lawmakers and the community is the true test of leadership. Without it, the current economic downturn will quickly become a crisis, by anyone's definition.