The real mark of fiscal prudence is not what government does when the red ink’s flowing, as it did in the wake of the economic recession. It’s the actions taken when revenues improve, as they have begun to do.
Legislators and the administration of Gov. Neil Abercrombie now can afford a sigh of relief after Wednesday’s forecast from the state Council on Revenues. Already expecting a sunny 11.5 percent rate of growth from the previous projection, the governor and lawmakers learned that the upward adjustment to 12 percent revenue growth would easily accommodate their budgetary plans.
What they can’t afford — and it was good to hear Abercrombie acknowledge as much — is reopening the spending spigot on new initiatives. That shouldn’t happen until some of the deferred bills are paid and some important investments are made to bring Hawaii in line with 21st-century infrastructure needs. These include improvements to broadband Internet networks in particular and the state’s information technology in general.
With the crossover of bills from one chamber to the other, the Legislature now moves into the second half of the session.
Here are some other points worth highlighting:
» Among the true community needs that arose in recent months are provisions to offset the closure of the two Hawaii Medical Center hospitals, particularly replacements for the organ- and bone-marrow transplant programs hosted by the Liliha facility.
There are also allotments to compensate for the emergency-room closures, including an undefined appropria- tion to increase on-call ambulance and emergency-care services.
Providing interim support during a difficult transition in the health-care network is the right role for state government this session.
» To the greatest extent possible, the state’s most important trust funds should be replenished with the newly available revenues, not by floating new bonds, as some have proposed. The emergency caches — rainy-day and hurricane funds — that previously were drawn down to balance the budget must be brought to more sustainable levels.
And the state must make a down payment on its unfunded liability for medical care of retirees through the Employer-Union Trust Fund.
» Further on retirement costs, the state House should take another look at curbing the practice of "spiking" — applying overtime pay at the end of a government worker’s career to boost the amount of pension he or she receives.
Rep. Karl Rhoads, the labor committee chairman who had tabled one proposal, said he believed that better management control of overtime work is the simplest way to address the problem, which is a relatively small percentage of pension costs. But he acknowledged that abuse exists, and Rep. Pono Chong, the majority whip, said House leadership and Rhoads will revisit the issue when the companion Senate measure, Senate Bill 2750, comes to House committees.
» It’s unfortunate that SB 1268, to eliminate Medicare Part B reimbursements for retired employee beneficiaries, has not moved this session. If a way can be found to capture that reform in another measure, that would represent a critical savings in the state’s mounting liabilities for retirees.
» Among other policy moves, the House should pass SB 2511 authorizing fees for checkout bags at stores, to generate funds for a state environmental fund to curb invasive species in the forest watersheds. The City Council should shelve its lesser idea, a bill to ban plastic bags outright.
» The brighter fiscal outlook should bolster chances for House Bill 2869, which extends the tax credit for the film and digital media tax credit. The measure gets its first hearing in the Senate at 1:30 p.m. Wednesday in conference room 16.
Gov. Abercrombie, along with several members of the legislative leadership, is viewing the mild fiscal windfall with caution, saying: "I’m not going to let myself get trapped in thinking, ‘Oh, I’m OK now. Let’s go back and make all the same mistakes we did before.’"
He’s sounding the right note. Now the public has to stand watch to see that elected leaders provide the prudent stewardship of taxpayer funds that they promise.