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$700M budget gap awaits new chief

Finance director nominee Kalbert Young is praised for his brilliance

By Andrew Gomes

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Had life's currents taken Kalbert Young in a different direction, he might have joined a U.S. intelligence agency or become an educator. But as circumstances would have it, the 1987 Maryknoll School graduate was recently tapped by Gov. Neil Abercrombie to oversee the finances of the state of Hawaii.

Directing the Department of Budget and Finance is one of the state's most important and challenging jobs, given that the present economic recovery probably will not generate enough added revenue to close a roughly $700 million projected state budget deficit through June 2013.

The job will require coming up with strategies for reducing spending and increasing revenue that pass muster with the Legislature.

Young, who at 41 is one of the state's youngest department heads, was prepped for the job by a relatively short but loaded work and academic history despite early career aspirations that did not include government or finance.

People who know Young say his traits include a brilliant understanding of economics, a fiscally conservative philosophy, tireless work ethic and friendly nature toward colleagues.

"Kalbert's one of the brightest guys I know," said Maui Mayor Alan Arakawa, who recruited Young for a Maui County economic development job in 2003 and appointed him county finance director a year later.

Young held the Maui County finance chief job for the last seven years, putting Maui on arguably the firmest financial footing among the state's counties.

Maui County managed to improve its bond rating in the wake of the recession, and its rating presently tops all other Hawaii counties. Another achievement was limiting Maui County employee furloughs to one per month compared with two a month for other counties.

Also under Young's financial leadership, Maui County started building a fund to cover an unfunded liability of county employee health costs, and though other counties set up similar funds, Maui has been the only county to fund 100 percent of its obligation.

"We're in a great position right now," said Agnes Hayashi, who was deputy finance director under Young for the last four years.

Hayashi said Young enacted strong, and often unpopular, fiscal policies in early 2008 that are paying dividends. "That helped us in the long run, and I think (Young) will help the state in the long run."

Former Maui Mayor Charmaine Tavares, who retained Young as finance director when she became mayor in 2006, was impressed by Young's understanding of economics and finance, his leadership ability and his communication skills. Tavares also said Young was disciplined to seek long-term benefits for the county when short-term gains would have been easier to achieve.

PROFILE: Kalbert Young

» Age: 41
» Former job: Maui County finance director
» Education: Maryknoll School, University of Hawaii master's in business administration and undergraduate degree in American history
» Family: wife Cindy,
1-year-old daughter

"In tough times, true-grit people rise to the top - that's Kalbert Young," she said. "I can't say enough good things about him. Our loss is the state's gain."

Tavares, who lost a close election to Arakawa in November, said she is mystified that Arakawa, who appointed Young in the first place, did not retain the young finance star, and believes politics had a part in the decision.

During the Tavares administration, Young's wife, Cindy, left a job as deputy corporation counsel council to become a special assistant to the mayor. Tavares said neither Kalbert nor Cindy Young was active in her re-election campaign, but she believes Young's Maui job was a casualty of politics.

Arakawa said politics was not at play. He said he needs department directors to make some unpleasant changes during this still-difficult economic time, so he decided to replace every director so they would not have to implement new policies that are certain to hurt relationships.

"It's not fair to them to make changes that I feel we have to make," Arakawa said.

Young said he did not get much of an explanation when informed he would not be retained, but less than a week later, on Dec. 6, he left his Maui job and started working for Abercrombie on Dec. 7.

"I was surprised at not being retained," he said. "I think I did a very good job for Maui. We (my wife and I) are not really political in nature, but I've been in government service long enough to know nothing is permanent."

Young said his wife, who was raised on Maui, is looking for a job on Oahu but that the couple, who also have a 1-year-old daughter, will probably try to keep their Valley Isle home and return there on weekends.

Though born and raised on Oahu, Young said he now regards Maui as home. "It's taken me a while to get used to it, but I consider Maui my home," he said.

Young grew up in Manoa, graduated from Maryknoll and obtained a degree in American history from the University of Hawaii in 1991. He aspired to join the U.S. intelligence service, but changes overseas during his studies that included the dismantling of the Berlin Wall convinced him to pursue another profession.

So he entered graduate school at UH seeking a master's degree in education. Before classes began, Young took a job at the Legislature working in the House chief clerk's office.

The experience Young gained there led to a clerical job in 1993 at Bishop Estate, now known as Kamehameha Schools.

Young moved to higher positions at the estate, including government relations, budget and financial planning, and internal auditing. At the same time, he took graduate courses at UH and part-time jobs at the Legislature, the phone company, Liberty House and even a mortuary.

In all, Young spent eight sessions working at the Legislature, mostly for Big Island Rep. Bob Herkes. Young stopped short of getting an education degree, just by a thesis, but earned a master's in business administration.

In 2003, Young left Kamehameha Schools to move to Maui.

Six years earlier while at the Legislature, Young met Cindy, who also was there for part-time work before graduate school courses began. The couple married in 2002, and a year later Cindy, an attorney, landed her Maui County job. Young got a job in the Office of Economic Development, where he became Maui County's first small-business advocate.

After briefly leaving his county job to become a residential and resort development coordinator for Maui Land & Pineapple Co. affiliate Kapalua Land Co., Young was rehired by Arakawa as finance director.

Young's new job as state finance and budget director is subject to confirmation by the state Senate.

If confirmed, Young said he is ready to tackle a much more complex job than he had on Maui.

Compared with county government economics, the state's gap between anticipated revenue and spending is far bigger and less stable; primary revenue sources are different; and services, staffing and constituencies are more diverse.

"In government, when it gets larger it gets exponentially larger, and strategies (to balance the budget) become exponentially more difficult," Young said. "The challenges are definitely

bigger."






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