Candidates split over how state prospered

Gov. Neil Abercrombie and state Sen. David Ige take pride in Hawaii’s economic turnaround, but they have competing storylines about exactly how state government was able to climb back into the black.

Abercrombie has framed his re-election campaign on a recovery marked by an $844 million budget surplus, replenished emergency reserves, and the political will to confront the long-neglected unfunded liabilities in the public-worker health care and retirement funds.

Ige, the chairman of the Senate Ways and Means Committee who is challenging Abercrombie in the Democratic primary, insists that it was the state Legislature that had the prescription to close the projected deficit Abercrombie faced when he took office in 2010. It was the state House that led the changes to contain the unfunded liability in the retirement fund in 2011. And it was Ige in the Senate who was behind the law last session that put the state and counties on track to pay down the liability in the health care fund.

The storylines are not incompatible: a governor often sets the tone and direction, while the Legislature often prescribes the detail. But the differences can give Democratic primary voters some insight into the two candidates.

Ige has been slow to articulate policy distinctions with Abercrombie and give voters a reason — beyond the governor’s low job approval ratings — to put him in Washington Place.

Abercrombie is asking voters to judge his first term by where the state was in 2010 and where it is today.

"The record from that point, then, is something that people will examine," the governor said in an interview at his Kakaako campaign headquarters on Friday. "Was there a turnaround? Did we start moving in the right direction? Were hard choices faced and the tough decisions made that turned us in the right direction?

"So I believe that when it comes to making a decision as to whether there should be a change in leadership, they are going to look to see what were the results."

Abercrombie has described a "fiscal trough" when he took office, and the state soon faced a projected two-year, $1.3 billion budget deficit. But lawmakers rejected most of the governor’s tax options to close the deficit, including a pension tax, the governor’s primary source of new revenue to pair with labor savings and spending cuts. Ige, as the Senate’s lead budget negotiator, was the one who drew the line against a pension tax.

"Remember, they held the entire state of Hawaii hostage to tax pensions," Ige said in an interview at the state Capitol.

Abercrombie, who has said he learned from the public opposition to a pension tax, has offered tax relief to seniors this session. Ige has proposed a state constitutional amendment that would ask voters whether retirement benefits should be excluded from taxation.

Ige (D, Pearl Harbor-Pearl City-Aiea) and state Rep. Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu), the chairwoman of the House Finance Committee, have also pointed out that the budget surplus would not be as robust had the Legislature approved all of Abercrombie’s requests for new spending.

The state’s two-year budget also presumes that the state will spend more than it collects in revenue, which, combined with a decline in tax collections so far this fiscal year, troubles Ige.

"State government is a $12 billion organization," Ige said. "It really is about leadership. It’s not about just taking a stand. It’s about making it work, and making sure that the functions of government really serve the people.

"And it’s very clear to me that many, many in our community really feel like government is not working."

Undeniable is Ige’s role in the law that for the first time commits the state and counties to a payment schedule for the $16 billion unfunded liability in the public-worker health care fund. Credit-rating agencies have praised Hawaii for confronting both the health care fund and retirement fund — which has an $8.5 billion unfunded liability — over the past three years.

"If I wasn’t here or I wasn’t engaged, it wouldn’t have happened," Ige said.

Abercrombie recognizes Ige’s role but also notes — accurately — that the Legislature had not made the unfunded liabilities in the health care and retirement funds priorities in the years before he took office.

PRESCHOOL

Abercrombie has made early childhood education his most significant policy initiative over the past two years.

A constitutional amendment on the ballot in November will ask voters whether public money should go to private preschools, one of the options the state would likely need to one day achieve universal preschool for all 4-year-olds.

But Ige and others at the Legislature have been reluctant to commit to a broad state-funded preschool plan that could eventually cost more than $125 million a year without more granular details about curriculum, access and financing.

Ige said he is undecided on the constitutional amendment. He would concentrate the state’s resources on existing programs aimed at low-income children and other efforts that would help parents who live in rural areas get access to preschool for their children.

"Our plate’s full, both financially as well as responsibility," Ige said. "I think we ought to focus on those responsibilities that we clearly have today before we look at expanding."

KAKAAKO

Kakaako is rising in what Abercrombie envisions as the rebirth of a neglected patch of Honolulu’s urban core, but Ige is among the lawmakers concerned about the power of the Hawaii Community Development Authority, the density of the projects being outlined, and the lack of infrastructure.

"I believe there’s too much growth in Kakaako," Ige said.

Ige is also uncomfortable with the luxury nature of some of the development projects, which appear tailored for foreign and mainland investors.

"I think what we need is housing for our residents," he said.

GMOs

With the debate over new county regulations on GMOs — genetically modified organisms — and pesticide use shifting from Kauai County and Hawaii County to the federal courts and the Legislature, many biotechnology companies, farmers and environmental activists are looking for guidance from the state.

Abercrombie said the state has restored agriculture inspector positions that had been cut during the recession and is completing a statewide report on pesticide use that should be out soon. His administration also reached a voluntary agreement with biotech companies on Kauai for greater pesticide disclosure and buffer zones near homes, schools and hospitals.

But the governor would not say how he would respond to either a Right to Farm bill, which would preempt county authority over agriculture, or GMO labeling legislation.

"I’ve long since learned that you walk a very shaky path to give opinions on any piece of legislation while it’s in the mix of the legislative session," he said.

Ige said that the state should have been more proactive about getting factual information about ag inspectors and pesticide use out to the public sooner, which may have defused some of the emotion from the GMO debate.

"Lacking facts, then people create their own perceptions," he said. "And perceptions become reality."

Ige said he does not think the state should preempt the county GMO and pesticide use regulations, even though he disagrees, for example, with Hawaii County’s ban on new GMO crops.

Ige also said he does not support a state requirement for GMO labeling on food.