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Sunday, November 23, 2014         

ON POLITICS


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Focus of Legislature needs to be about jobs, jobs, jobs

By Richard Borreca

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Best speech I ever heard in the Legislature was given by the late House Finance chairman, Rep. Jack Suwa.

During a quarrelsome floor debate on the budget, Suwa, the Big Island Democrat, famous for his mumbling, almost indecipherable monologues, took the microphone to say:

"Mr. Speaker, we want jobs, jobs, jobs."

That was it. Then Suwa sat down and the House approved his version of the budget. What Suwa wanted was not more or less taxes, not a bigger or smaller budget. Just give people, perhaps especially the folks on the Big Island, who had seen sugar plantations close one after another, a shot at earning a living wage.

It is still the speech that we need to hear today.

Instead, Gov. Neil Abercrombie started the session by telling the Legislature it should tax pensioners and take $84 million in programs away from the poor and needy.

What would it take, instead of cutting the budget, to bring down the state's $840 million deficit? Can we grow our way out of the deficit with jobs and work?

Interestingly, economists say it is possible. The trick is hanging on until economic growth catches up and needed new workers start earning new paychecks and paying new taxes.

Paul Brewbaker, chairman of the Hawaii Council on Revenues, says its projections expect a 6 percent rate of growth in tax collections, which should translate into about $300 million in new tax collections.

"What is needed is a couple of years with steady spending," Brewbaker says.

Steady spending means no new spending, which means no increases in the state payroll, which means no public worker pay raises.

Brewbaker also sees demand for houses going up, meaning more construction.

"You could work your way out of it," Brewbaker says, but cautions that in reality, the state budget isn't flexible enough to hold spending at a steady rate.

Another person watching the local economy is Lowell Kalapa, president of the Hawaii Tax Foundation. He says state government will have to change before it is capable of growing more jobs.

"Lawmakers have gone (so much) over the edge in recent years in their attempt to protect their constituents that little thought has been given to those who must comply with those laws and regulations," says Kalapa.

For instance, he fears that Abercrombie's proposal to double the alcohol tax will end up causing bar owners to raise prices by two or three dollars per drink.

"As a bar owner, if I cannot get the volume up enough with what slim profit margin I can charge, then I am not hiring another person. Indeed, it is the uncertainty of what the Legislature is doing right now that will affect whether or not we can address the unemployment rate, let alone the revenue picture to pull us out of this deficit," says Kalapa.

And that is why economics is called the "dismal science."

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Richard Borreca writes on politics every Tuesday, Friday and Sunday. Reach him at rborreca@staradvertiser.com






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