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Saturday, November 01, 2014         

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George Ariyoshi

The former Hawaii governor known for being “quiet and effective” extols the virtues of frugality through tough — and good — times

By Vicki Viotti

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At 85, George Ariyoshi still relishes coming in to work at his old law firm, now known as Watanabe Ing LLP. The legal beagle in Hawaii's longest-serving governor has retired, but not yet his interest in serving on business boards, fielding invites to make public speeches and working on book projects — as well as turning out for duty at his grandchildren's baseball games.

He did this interview, the edited version of which appears below, still nursing the remnants of a bad flu and walking a bit slowly, the results of back surgeries in 2010.

Watching government in action is still a favorite pastime, though he pointedly declined to comment specifically on the work of anyone who followed him.

Still, it was clear he believed this was not the first time the state has struggled with a bad economy and that his frugal approach to fiscal matters remains relevant. The trick, he said, is to avoid the temptation to make spending on things your legacy.

"That's one of the problems with a lot of elected officials: They want credit," Ariyoshi said with a smile. "They want to be remembered for some things they did. I want to be remembered for not just what I did during a short term, but what I consider to be important during my time, also looking into the future during years I was all through being governor."

QUESTION: How would you differentiate the role of the governor and Legislature in handling the state budget?

ANSWER: So much of what you do depends on understanding that role. The governor proposes and the Legislature disposes. Ultimately the programs are decided by the Legislature, and they’re the ones who decide what the state of Hawaii is going to be doing.

The Legislature sets figures, but that’s based upon what somebody else tells them ... they can’t be sure. Ultimately it becomes up to the governor to decide how much is going to be spent. … If the Legislature says, “I’ll give you $1 million to run a certain program,” and that’s what they approve, the job of the governor is not to spend $1 million; if I can get by with spending $900,000, that’s my responsibility. And that’s what I try to do in working my budget out.

I was chairman of the Ways and Means Committee. In the 1963 budget session, Gov. John Burns had just gotten elected. … I told him we were having great difficulty, and he said, “I know that, but I will tell you, whatever you do, if you feel you have to cut or put monies in, don’t worry too much about it, because I will take those dollars and, if they don’t materialize, I will make the adjustment necessary to keep the books even.”

I felt that my role as governor was to take the programs that were authorized by the Legislature, be as efficient as I possibly could be, establish priorities, make some cuts that are necessary, and not spend everything that they authorized me to spend.

Q: What was your approach?

A: You’ve got to make some basic decisions at the very beginning. One of the decisions that I made: I was not going to have any tax increases. As long as I’m governor, I was not going to ask for increasing taxes … the general excise tax. You see, in everything that I did, I felt that whether it’s, let’s say, an ordinary citizen living on a fixed income and especially a business person, people can adjust to any circumstance if they know that’s what it’s going to be. Predictability’s very important. …

When I became governor (in 1974), we had a huge deficit and I had to work that out. ... I didn’t feel that I had to balance it in this one year; I was going to take two years to work it out. I made a decision that I was not going to take any pay cut or lay off anybody.  I told the unions I planned to do that, and I told them I believed I had enough time to do it if I had two years and if I don’t hire new people.

Q: So there was no pay cut but there was a hiring freeze. Was that enough savings for the budget?

A: You get between 10 and 15 percent turnover of people. People retire, leave employment for whatever reason. And that’s what I wanted to do, not hire those people. …But I also felt that government had to continue to exist, all the services it provided must continue. So I talked to the union and they told me, yeah, they believed they could be very helpful … and I said, “Wait now, you’ve got to understand what I’m asking of you. It’s not just that I’m not going to hire any new people. If there were five people working in a place and one retires or leaves employment, and I don’t fill the position, I don’t want the four to do what four were doing, I want the four to do what five were doing.” And they all agreed, and that’s the kind of performance I got. … Politicians are almost ashamed to ask for help, and they don’t ask for help, but I thought it was important for me to ask for help.

The other thing is, you cannot only do this periodically. If you look at government revenues, you go back 50 years, 60 years and you find revenues up, revenues down. … I thought it was very important that you manage well when times are tough and you make those decisions, but you’ve got to manage well when times are good.

Q: You had budget surpluses, then, during the better years? Did that money go into a rainy day fund?

A: No, I didn’t have a rainy day fund. What I did was, we had carry-over. You have recurring expenses and one-time expenses. When times are good, you can spend for some things that won’t keep coming back.

Q: So, a lot of construction during those days?

A: That’s right. … On top of that, managing during good times means not only how you’re going to spend, but being sure you don’t affect your resources. It’s so easy to talk about tax reduction … but on a continuing basis you’re going to affect the resources you have to run government. So once I made the commitment that I was not going to increase taxes, I had to be careful I don’t reduce taxes so we don’t get into really difficult circumstances.

Q: How do you view tax policy?

A: In the mid-’60s, we looked at a very comprehensive review of all of our taxes, state and county. … the general excise tax. Today they’ve looked at some of the tax breaks that they give, but we looked at what the impact of the tax was, and in some cases we had to make some moderation.

Q: So most of the tax exemptions that got repealed at the Legislature this year date back to that original tax code?

A: Most of it.

Q: Going forward, what do you think would be a good approach in navigating the current crisis?

A: We are now in a difficult position. But things are going to get better, and when things get better, we’ve got to be very careful, otherwise we’re going to find ourselves in a more difficult position some years later.

Q: On land-use planning, how would you describe your approach to the shift away from sugar and pineapple agriculture?

A: We tried to pick it up, by diversified agriculture. … I thought it was very important to grow more of the things that we eat so that we can become more self-sufficient. As the sugarcane and pineapple land became available, I felt that the state should try to set aside land for diversified agriculture. … I created agricultural parks, where we took state land and we put roads and water and we subdivided and we leased out to farmers. … We didn’t want it going to the highest bidder. We decided what would be a fair rate for a farmer to pay, and we drew lots.

Q: You would acknowledge that some good ag land has to be lost, right?

A: You cannot keep it all. That’s where land-use planning becomes very important, ... so we can keep agriculture as part of our sustainable economy.  And farmers must know — again, predictability — they gotta know they can work this thing out, they can hang onto it and create something nice and valuable, and the children can pick it up.

Q: Isn’t that hard, though? A lot of the time, the kids don’t want to farm.

A: In a sense, everybody who owns property, they try to look at what they can do to increase the value of their property. So government has a real responsibility. … I think during my time the Land Use Commission was very active, they had that idea of preservation, but over the years, that has changed a great deal. And the commission members have become people involved in land development, or consultants involved in land development. So you no longer have the kind of interest, that it’s important and necessary to preserve some of our land for good future uses.

Q: Do you think your budgetary management style left a lasting mark ?

A: I think so. I am very grateful. I have people coming up to me saying that they really appreciated it. … Government ought to ask, “It’s nice to have, but is it necessary?”

Q: You sound like a tea partier!

A: I’m different because I spend for the things that are necessary.






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