Build prudently to boost economy

Some state legislators have gone beyond what the Abercrombie administration has suggested is needed to kick-start the economy through shovel-ready public construction projects. The Legislature should opt for bond-financed construction spending at the prudent level suggested by the governor and backed by the state House Finance chairman.

Gov. Neil Abercrombie said in his State of the State address in January that the state’s economy had begun to turn the corner. To keep the recovery going, he asked legislators to approve about $300 million in new general obligation bond-financed state construction spending. Senators, though, called for even more borrowing: $500 million for the repair and maintenance of schools, hospitals and other public buildings.

That much in expenditures is unnecessary, given a recovering economy and the continuing need for fiscal discipline. Island tourism, humming along at a pace beyond expectations, is forecast to surpass the peak year of 2007 and is ahead of targets that had been set for this year. Ground was broken this year for construction of Honolulu’s elevated rail transit system, which should bring plenty of jobs to Oahu. And plans are in motion to transfer more than 2,500 U.S. Marines to Hawaii from Japan, adding millions of dollars to the state’s economy.

As for the bond-financing level for public facilities’ "shovel-ready" repair and maintenance, House Finance Chairman Marcus Oshiro is on target in stating: "There is no need to incur additional debt when you have so many capital improvement projects yet to be expended, contracts yet to be let out."

While senators still argue that the state should take advantage of low interest rates and turn the faucet on bond-financed state construction, House members are rightly unwilling to borrow and spend much beyond the amount requested by Abercrombie.

This sense of prudence should also extend to environmental and procurement regulations, which should not be bypassed in the name of expediency. Senators have suggested that strict bidding and contract regulations be relaxed for two years for repair and maintenance projects costing less than $1 million, with a legislative oversight committee monitoring the projects. Such an action is not necessary. However, it’s better than the drastic House plan, which would allow the governor to come up with a list of projects to exempt from environmental reviews for three years.

It makes more sense to fix the regulations themselves. But with Friday’s midnight deadline looming to deck fiscal bills in their final forms, there isn’t agreement on the type, or level, of regulatory reform. Culling of duplicative, dated or otherwise obsolete rules take time — but exempting projects wholesale from them should not be the answer. Legislators should agree that state projects be allowed to go forward only if environmental reviews and the procurement process of approving contracts have been duly completed.