Tomorrow’s pensions put pressure on today’s needs

Since taking office in 2010, Gov. Neil Abercrombie has been consistent in his fears that the money the state owes to state pension holders will cause a calamity.

The state has alternately not put away enough money or borrowed from the pension to the extent that now Hawaii is more than $20 billion out of whack. First there is $8 billion owed the retirement fund and then a gasp-inducing $14 billion in estimated medical care benefits.

By the summer of 2011, Abercrombie was warning of trouble coming, saying it "can tear our social and cultural fabric to shreds.

"We must face the state’s long-term responsibilities without flinching," Abercrombie said, adding that all the progress state workers have made in their own labor contracts could be lost if there is not "a firm course of correction."

This year during his State of the State speech, Abercrombie returned to his fearsome prediction to offer a plan to pay down the billions in debt.

Saying that to do it all at once would mean requiring "the state to put up more than $500 million every year for 30 years," Abercrombie called for tucking an extra $100 million a year into the budget dedicated to paying down the liabilities.

On the mainland, Illinois is now in crisis mode because of ignoring its pension debts. That legislature and the governor, Pat Quinn, are battling to cut $500 million in spending in order to start paying the pension debts.

Hawaii is not close to having the trouble of the Land of Lincoln, but it is time to start figuring out how to pay up.

Rep. Sylvia Luke, Finance Committee chairwoman, says the budget she will offer includes Abercrombie’s suggested $100 million.

"Right now the budget we are going to vote on has a commitment of $100 million. That amount might change and, to be frank about it, everything is dependent on the Council of Revenues’ projection and also what the federal government is going to do on sequestration," Luke said in an interview.

Luke is as candid as you can be when balancing the wish lists of her 50 House colleagues. There is pressure for more spending, there are the ordinary fixes the neighborhood school hopes for, the unmet needs and then there are the really serious problems we have now.

Not doing something means poor people will lose health insurance.

"There are huge amounts being requested for Medicaid and QUEST and those are some of the things we must do, they are things we need to do right away," she said.

The result is that Luke isn’t saying yes or saying no.

"I can only say what I will do right now. Whether that is a firm commitment in the future, things might change," she said.

The House will approve Luke’s budget next week. It then goes to the Senate where Sen. David Ige, Ways and Means chairman, has also said he wants to fund the pension pay-down.

Ige may be a bit more strident in insisting that the state pay its debts. He tossed in a separate bill to stockpile the state pension money.

"It is important that we build the budget around that," Ige said, adding that he wants to step up the pension saving amount by $100 million a year.

That’s nice — but when responsible sentiment to cure outstanding pension problems is balanced against the immediate needs to give people money, bandages and shelter today, just wait to see which side wins when you are looking to be popular and win elections.

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Richard Borreca writes on politics on Sundays, Tuesdays and Fridays. Reach him at rborreca@staradvertiser.com.