Mounting costs will necessitate tax hikes next year, gov says

Even in the middle of a private interview, the subject gets him so excited that Gov. Neil Abercrombie leaps to his feet exhorting his listener to understand.

The problem is people. We are living longer, there are more of us and those in public employment have been promised benefits that Hawaii can no longer afford with the existing budget, says Abercrombie.

His arms are raised above his head and the hands spread far apart.

"It is not the spending, it is the costs. The costs are exploding, the spending is chasing the costs. I am not talking about new programs, this is just to stay in place," Abercrombie said during an interview a few days ago.

According to his estimates, by the end of the 2010-2020 decade, one-third of the state’s general fund will be needed to cover medical insurance for state retirees.

"One-third of revenues, we can’t sustain that," Abercrombie said, adding that the state will not pay it.

"It doesn’t matter what was promised, or what you hope for or what you deserve," Abercrombie warned. "You can’t operate a society where 75 to 80 percent of the people are working to sustain 10 percent. The benefits have to change."

So will state taxes.

Abercrombie says there is no choice but to ask for tax increases next year.

"There will be revenue (increases) and I think there will be a lot of support for it," Abercrombie said.

If the state’s budget crises are now stable, they are still ill enough to be in the emergency room and Abercrombie sees himself as the doctor performing triage, deciding which patients or programs can survive and whether they need immediate surgery or just bedside care.

"Who can be saved, in what order and you don’t blink," he proscribed.

While not promising to bring back the controversial pension and soda tax plans, Abercrombie will take point to lead the 2012 Legislature to raise taxes.

In an election year, when all 76 legislators are up for re-election?

"If you are afraid of your own constituents because you are going to tell them what they need to hear, because it will upset them and they will take some sort of revenge on you for being honest … then that is a comment not on the constituents, but on you," Abercrombie said.

"The answer to the revenue question is, ‘Yes,’ we are going to have to do it," said Abercrombie.

Earlier this year the Legislature rejected most of Abercrombie’s tax plans, voting instead for dropping general excise tax exemptions, gobbling up surpluses in special funds and cutting state tax deductions for the wealthy.

It is clear, however, that Abercrombie doesn’t just want more money; he wants the tax to curb a bad practice or pay for the results, and that means taxes on sugary drinks and possibly even high-sodium food.

"I’m not telling people what they should eat and drink, but we have to pay for our behavior," said Abercrombie, who confesses to a weakness for ice cream.

For a governor who at times appears to relish calling in air strikes on his own position, it is an open question whether Abercrombie will get many Democrats to join him in the foxhole next year.

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