Hawaii is in recession. Our economy has been contracting for at least a year. Businesses large and small are seeing their bank accounts shrink monthly, and now public employees are feeling the pain, too.

If there ever was a time for smart, informed leadership to see us through a budget crunch, this is it. The administration and state Legislature have various options to balance the budget. We need our leaders to look forward — beyond the upcoming few months — and make decisions that will lead to a healthy economy when this recession finally ends. We can't afford decisions that will drive us deeper into debt and prolong the recession here.

That's why I just can't understand Gov. Linda Lingle's insistence in laying off the entire staff of the Hawaii Film Office. This office is a tiny part of the state budget, with an aggregate payroll of a little over $300,000 including fringes, but it has an effect on the state budget far in excess of its size.

The governor's decision puts at risk a $200-million-per-year industry, the jobs of 4,000 taxpaying workers, and a major income stream for numerous vendors associated with the film industry.

Film is a lucrative and highly competitive industry. Various states compete aggressively to bring film projects and their jobs into their area. In our production office, we get offers from Mainland film offices every week. The Hawaii Film Office employees have done an excellent job in this competitive environment, bringing in productions from out of state and facilitating the shoots that occur here.

For instance, "Lost" was set to shoot its pilot episode in Australia and their producers stopped here on the way. The film office took executive producer J.J. Abrams around the island, and he fell in love with Mokul[0xeb]ia as the location to stage the plane crash. Well, Mokul[0xeb]ia is a public beach, and the film office worked overtime to work out the details for staging the remains of the L-1011 there. The pilot episode of "Lost" was, at more than $10 million, the most expensive in TV history. They've since spent more than $400 million in the state, and their employees have bought homes, started businesses and donated time to causes like literacy and the Honolulu Symphony. If there were no Hawaii Film Office, "Lost" would never have shot here.

Yet Department of Business, Economic Development and Tourism Director Ted Liu has proposed moving the marketing, permitting and tax incentive operations of the film office to other permitting departments within state government, such as the energy and building departments.

This demonstrates a profound lack of understanding of what the film office does — and leaves the fate of our industry in the hands of people who are incapable of handling the specialized requirements of the film business. Instead of a highly efficient and profitable department, we would be left with a bureaucratic mess.

Leaders from every branch of the film industry have unanimously told Liu that this won't work. We've seen the results of what happens when a state goes this route. Washington did something similar with its state film office. Film production within the state was decimated while its neighbor to the north, Vancouver, turned into a major film center with its governmental support for the film business.

Most other states seem to understand the value of a film office better than we do. California's Republican governor has cut the budget of almost every state department in the middle of that state's multibillion deficit, but he increased the state's film incentives. Michigan, with more than 15 percent unemployment, has done the same thing. Why? They understand that the film business creates jobs and can bring a lot money into their states and consequently, their state coffers. Our state will lose money by gutting the film office at a time when we need every dollar we can get.

Film office layoffs are scheduled to start on Nov. 20. The Lingle administration still has time to reverse course. The film industry is part of the solution to our economic recovery, and Hawaii's Film Office is the industry's engine. I hope the governor has the vision to keep this money, job and tax-generating engine intact.