Gov. Neil Abercrombie understands Hawaii’s problems.

The state continues to spend itself into a deficit, a black hole of ever-rising medical, payroll and benefit expenses that now threaten to capsize this ship of state.

"We are in that unnerving moment when we could all huli (flip). All of us are at risk and we have to face this," Abercrombie said in his State of the State speech yesterday.

The question now before the Legislature is how much can be adopted without permanently alienating its Democratic base.

The Abercrombie plan was bold on calls for action, light on specifics of how to right the vessel and politically dangerous for all who sign on for the voyage.

The poor, the old, the public worker and the tourist industry will all suffer under Abercrombie’s plan. There is no getting away from the fact that Abercrombie’s plan will take a sizable chunk of money from state workers.

The governor called for ending state contributions estimated at $1,800 annually given to retired state workers to reimburse for federal Medicare Part B payments.

"I am personally one of those recipients of this benefit from my previous service in state government," Abercrombie, who collects both a state and federal pension, said in his speech.

All taxpayers would lose the deduction for paying state taxes and those with some unspecified high-income pension would have to pay state income tax on their pension.

Calling it the "most emotionally trying subject we face," Abercrombie said the state would have to start cutting social programs funded under soon-to-evaporate federal funding.

"We must acknowledge, without flinching, the fact that the rising cost of health care also requires that we cut back on benefits provided to Medicaid patients," Abercrombie warned.

To prime the tax pump, Abercrombie wants the state to provide more jobs under a plan called the "New Day Work Projects." With little details of what it would do, the NDWP does sound like Franklin Roosevelt’s Depression-era Work Projects Administration which built roads, bridges and public buildings.

In Hawaii in 1937, the WPA employed 5,500 people a month on 208 projects, many of which, like Andrews Amphitheater, the Ala Moana Park gateways and portions of Farrington High School, are still around.

In his speech, Abercrombie was vague about what his NDWP would do, other than to say somebody should do something with Aloha Stadium, the Lihue Courthouse on Kauai and the vacant Kamamalu Building in downtown Honolulu.

Abercrombie then told reporters in a hurried news conference after the speech that the state’s retirement system is in jeopardy.

"Whether we will be able to meet the obligations at this point is the question that needs to be answered," he said.

So in the end Abercrombie said what he could never really say during his 18-month campaign:

"The Legislature has to come to grips with the immediate obligation we have to balance the budget, (and) in that context we are going to talk about revenue sources, taxes, fees, etc., in a way that in the end will achieve consensus."