Posted tagged ‘budget’

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Legislature proposes welfare for losing contractors

April 15, 2011

One of the more puzzling bills still alive in this year’s Legislature is HB 985, which allows the state to pay a “conceptual design fee” to some losing bidders on state contracts.

An amended version passed the Senate this week with only Sens. Donna Mercado Kim and Sam Slom objecting.

There have always been risks inherent in bidding on public works jobs, and there’s no legitimate public purpose in needlessly running up the cost of state contracts by paying off unsuccessful bidders for the cost of preparing their bids.

Rather, it seems a blatant attempt by lawmakers to give more of their political campaign donors a taste of the action at taxpayer expense — and at a time when the state is strapped for cash and others are in far greater need of a helping hand.

Hopefully this stinker will die in conference committee, where it’s headed after the House disagreed with Senate amendments.

***

Matt Levi is back on TV with a new series, “Hawaii Investigates.”

The first show, which looks into problems at the Hawai‘i Youth Correctional Facility, made its debut last night on KGMB and repeats at 6:30 tonight on KHNL.

Levi, a private investigator and former investigative reporter, first took cameras into HYCF 26 years ago and returns to talk to staff, young offenders and judges to see if conditions have improved.

The good news, he reports, is that there’s been significant improvement in both philosophy and management — especially since the federal government threatened to shut down the facility in 2005.

The bad news, Levi says, is that the issues with many of those incarcerated aren’t fundamentally criminal in nature, but the kids remain there at a cost of $131,000 per year because the courts have few viable — and cheaper — treatment options available.

“Hawaii Investigates” is produced by Hawaii Reporter.

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Wrestlemania, Washington style

April 8, 2011

The older I get, the less tolerance I have for contrived political melodramas like the fight in Washington over the federal budget.

President Barack Obama, the Democratic Senate and the Republican House have been playing brinksmanship for weeks over how much to cut, with the threat of a federal government shutdown looming in the background.

The closer they seem to get, the further apart they seem to be as the national political debate resembles the WWE more every day, with clownish men and women bulked up on partisan steroids playing to the gallery with intentions that have more to do with drawing political blood and ducking blame than setting national spending.

Writing a budget is one of the main responsibilities of Congress and six months into the year they don’t have a budget for this year, much less an orderly process underway for drafting next year’s.

It’s hard to disagree with our own Sen. Daniel Inouye that this is no way to fund a government, and the unbecoming circus puts me in a “wake me up when they make a decision” state of mind.

I fully realize that tuning out the foreplay can be a dangerous thing. I paid little attention to the chest-thumping leading up to the Iraq war because deep down, I didn’t believe George W. Bush would be stupid enough to start dropping bombs.

Eight years later, I still don’t believe it.

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Will the HGEA contract set the standard?

April 7, 2011

It’s hard to say for sure without seeing the fine print, but the tentative agreement between the state and the Hawaii Government Employees Association announced yesterday by Gov. Neil Abercrombie seems a fair contribution by state and county workers toward reducing the state’s $1.3 billion deficit.

Basically, the 28,000 active white-collar workers represented by HGEA would swap their current deal of two furlough Fridays a month — the equivalent of about an 8-percent pay cut — for a straight 5-percent pay cut and six hours of personal time off a month. Workers would also pay 10 percent more of their health care premiums than they currently do.

The end of the disruptive furlough days that close state offices is welcome; the personal time off can be scheduled when mutually convenient and is far easier to manage without disrupting services.

The governor’s office said the deal saves the state about $65 million next fiscal year and $59 million the following year. If similar agreements are reached with other government unions it would increase the savings accordingly.

Honolulu Mayor Peter Carlisle and some legislators raised concerns that the savings weren’t enough, but it’s what Abercrombie said he was shooting for all along and a substantial bite out of public worker pay checks — within the ballpark of what workers in the private sector are facing.

The governor needs at least one county mayor to go along to enact the deal, and presumably he wouldn’t have announced it if he didn’t have one. Hopefully, more details will be released as that is sorted out so we can more fully evaluate the fairness of the contract to workers and taxpayers.

The HGEA contract usually sets the rough terms for blue-collar workers represented by the United Public Workers.

The Hawaii State Teachers Association, which can’t seem to settle contracts anymore without a lot of drama, could be trickier, and President M.R.C. Greenwood at the University of Hawaii could find herself in a pickle with a six-year faculty contract she agreed to that requires UH to soon repay professors for the labor savings of the last two years and give them raises in the final two years.

Greenwood was betting that the economy would bounce back and it hasn’t happened. She won’t find it easy to get cash-strapped legislators to give the semi-autonomous university general fund money to pay for her promises.

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DARE to prioritize public spending

April 4, 2011

I was sad to read that the Honolulu Police Department is drastically cutting back its popular 25-year-old DARE program — Drug Abuse Resistance Education.

One of my grandsons recently had a visit at his elementary school from DARE officers, and the anti-drug message clearly made a strong impression on him.

But listening to Chief Louis Kealoha explain the move, it made obvious good sense in this challenging fiscal environment to trim DARE back from the 120 schools it currently covers to about 40 schools that have the highest concentrations of at-risk students.

When budgets are tight, the chief said, core responsibilities have to be the priority — in the case of police, law enforcement and public safety. DARE doesn’t fall under the core; cutting funding there helps the department to maintain patrols in O‘ahu neighborhoods.

It’s exactly the right way to manage a shrinking budget, and it doesn’t happen often enough in public agencies, where there’s a constituency ready to fight for every nickel in state and county budgets.

Administrators can work diligently to cut at the edges while preserving the core, only to be thwarted by advocates for the programs being cut who are able to use political pressure to fend off change.

This has been especially prevalent in the Department of Education, where administrators attempting to make necessary cuts and consolidations have had to gird for drawn-out battles before the Board of Education that they’ve often ended up losing.

Everybody wants the DOE to set priorities, be more efficient and eliminate duplication — until it’s their school or program being cut.

With the new appointed BOE coming in this month, hopefully the decision-making process will be streamlined, less drama-ridden and sharply focused on serving the core responsibilities first.

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Budget writers may target tax refunds

March 29, 2011

I can’t see getting too exercised about reports that the Abercrombie administration is backtracking on vows not to follow Linda Lingle’s example and kick state income tax refunds into the new fiscal year to reduce this year’s deficit.

Yeah, Gov. Neil Abercrombie earlier derided Lingle’s policy and said that to follow suit would only extend the pain to taxpayers that she caused.

But the fact is that there were few reports of serious hardship caused by last year’s delay, and doing it again may be the least disruptive way to deal with a budget deficit for the remainder of this year that is suddenly more than $230 million after the economic fallout from the Japan crisis.

Delaying refunds again would keep us in a hole and at some point we’re going to have to bite the bullet and get tax refunds back on the usual schedule, but there’s a fair argument that it’s best done in a rebound year when we have a more robust revenue stream to cushion the cost.

Administration budgeters say delaying refunds isn’t their first choice for making up the revenue slide and if they come up with better ideas, that’s fine. But it’s not an unreasonable option to keep open if it looks to be the least painful way out of this fiscal year.

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Will a higher threshold make the pension tax palatable?

March 9, 2011

It’ll be interesting to see if the proposal in the Legislature to tax pensions continues to draw the political ire of seniors now that the House has set the income threshold at nearly three times higher than originally proposed by Gov. Neil Abercrombie.

Hawai‘i  is one of only 10 states that don’t tax employer-provided pensions, and Abercrombie raised a fair point about whether that should change given the state’s precarious financial situation.

But he set the income threshold way too low at $37,500 for singles and $75,000 for married couples, which would have taken a big chunk out of the anticipated retirement income of middle-class citizens who could ill afford the loss.

The governor also failed to properly index the tax, which would have placed an unfair burden on those who fell just over the limit.

The House removed a lot of the immediate sting by raising the income threshold to $100,000 for singles and $200,000 for marrieds.

Rep. Isaac Choy, an accountant who is respected for his facility with numbers, estimated the tax will apply at this point to only 3,000 high-income taxpayers who can afford it, and the rest will have 15 to 20 years to prepare before inflation pulls them into the grip of the tax.

What remains to be seen as the measure moves to the Senate is whether nervous retirees and those soon to retire — a politically potent bunch — will be relieved by the reprieve or if they’ll continue to view any new tax on pension income as an ominous threat.

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Guv’s campaign promises upended by reality

March 2, 2011

When Gov. Neil Abercrombie was pressed during last year’s campaign by opponents Mufi Hannemann and James “Duke” Aiona on how he was going pay for his proposals, he’d typically answer, “Why do you it assume it will cost more?”

He said he’d cover the state deficit and pay for new programs by re-prioritizing, reallocating and tapping federal funds that he claimed the state wasn’t taking advantage of.

Abercrombie derided Aiona’s proposal for an audit of the Department of Education and Hannemann’s call for a comprehensive audit of state finances, saying he was ready to hit the ground running and didn’t need any audit to tell him the score.

Well, now that he’s finally coughed up a budget four months into his administration, it seems that his opponents were correct that his plans are going to cost more; he wants to spend several hundred million dollars more than proposed by the previous administration.

Abercrombie is relying mainly on tax increases of various kinds to finance his plans, with relatively little sign of re-prioritizing and reallocating. There have been few announcements of new federal funds coming Hawai‘i’s way.

He not only made big campaign promises, but was especially cocky in purporting to know it all as to where we stood and what needed to be done.

If truth in advertising has any meaning anymore in political campaigning, the governor owes us a better accounting of how his proposals stack up against what he promised.

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Did Abercrombie open the door for a GET increase?

February 17, 2011

Is anybody else starting to feel that Gov. Neil Abercrombie is getting a little wiggly on raising the general excise tax, which he promised not to do in his campaign for governor?

On the KITV4 morning show Monday, Abercrombie wouldn’t rule out a GET increase because of unfunded pension liabilities that are threatening the state’s bonding authority. The pension problem was well-known when he made his campaign promise.

Then yesterday, Abercrombie’s spokeswoman Donalyn Dela Cruz told the Star-Advertiser’s Political Radar that the governor doesn’t support a GET increase and didn’t propose one in his legislative plan, but added, “If a measure to raise the GET passes out of the Legislature because other elements of his plan are not adopted, he will of course consider it as the people’s will.”

Looks to me like a big wink to legislators that if they pass a GET increase, he won’t veto it.

It’s interesting that he’d consider what the Legislature might want to be the “people’s will” ahead of the clear will of the people who elected him on a promise of no GET increase; according to the recent OmniTrak People’s Pulse survey that Dela Cruz was commenting on, 68 percent of the public opposes an excise tax increase.

There was no wiggle room in what Abercrombie promised. His Recovery and Reinvestment Plan released during the campaign stated:

The General Excise Tax will not be raised. Given the public’s lost confidence in government, no reasonable argument can be made to raise the GET. Government will have to make better use of the revenues that it has and grow the economy if more revenues are needed.

In a September candidate forum with Mufi Hannemann, Abercrombie said, “I’m against raising the GET tax without equivocation.”

The governor reiterated his opposition to a GET increase in December, leading House Speaker Calvin Say to declare, “The general excise tax, which is so regressive, is off the table. It’s a Christmas gift to all the general public.”

Are we looking at a special Easter resurrection?

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