Gov. Neil Abercrombie says he is speaking for the silent majority when he calls for an unpopular tax on pension income, ending Medicare Part B reimbursements for public-worker retirees and spending cuts to welfare and Medicaid to help balance the state budget. Last night, at a town hall meeting, the governor heard from people who are willing to speak up.
In an informal 90-minute discussion at Pearl Ridge Elementary School, Abercrombie and Lt. Gov. Brian Schatz listened as people explained their concerns about the impact of some of the administration’s proposals.
"You used the word ‘hammering.’ You’re hammering me," said Manny Mattos, a retired Honolulu police officer who lives in Village Park and is worried about losing his Medicare Part B reimbursement. "It’s devastating for us."
Abercrombie assured him that his Medicare proposal, which is on the rocks at the state Legislature, would not affect him, even though the governor’s original proposal would have applied to him. The governor has since said he is open to thresholds based on age, income or retirement date, and lawmakers have indicated they might only end the Medicare reimbursement for retirees after July.
"Are you positive about that?" Mattos asked the governor. "You want to write it down?"
Earl Arakaki, a retired Honolulu police officer who lives in Ewa Beach, said Abercrombie is asking him to give up some of his pension income without fully explaining how he would use the money to balance the budget.
"Part of the problem I have with this is that you won’t even tell us how you’re going to spend the money you’re taking from us," he said. "You haven’t submitted a budget, but you expect us to have faith in you that you will spend the money you take from us in a wise manner.
"I just don’t have that faith."
Abercrombie, whose initial budget submittal in December was based on figures from the administration of former Gov. Linda Lingle, has outlined how he would reduce the deficit but has not provided lawmakers with an updated budget plan.
The governor said he would turn over a budget to lawmakers next week.
But Abercrombie, wearing a purple aloha shirt and standing just a few feet in front of his critics in the school cafeteria, used the question to launch into a passionate defense of his ideas to close a projected two-year budget deficit of $700 million.
"What I’m asking is, is that we recognize we all have to do a little," he said. "We all have to give a little. We all have to work together a little so that we can survive."
Kathy Ebey, a retired federal worker who lives in Newtown, said the pension changes should apply only to future retirees and not seniors who have planned and saved for their retirement under the existing tax code.
"When you were running for governor, you said you knew exactly how to fix the mess our state was in, and everybody else was stupid because they couldn’t figure it out," she said. "But little did we know that you meant increased taxes rather than reduced spending.
"Each of Hawaii’s families is expected to live within their income. Why doesn’t this apply to the state, also?"
Abercrombie said he would be sure to pass her comments along to domestic violence shelters that had to face spending cuts. Ebey said that she volunteers and told the governor to "suck it up."
"Well, I don’t think little kids should have to suck it up, but maybe you and I differ on that," the governor said.
Sandra Thompson, a tax preparer who lives in Aiea, was one of the few who characterized Abercrombie’s tax proposals as reasonable.
"You’re not asking everyone. You’re saying that have a cap, that if you make over a certain amount, you need to help and pay a little bit," she said. "That’s all we’re asking."
Abercrombie, since his State of the State address in January, has spoken more pessimistically about the state’s budget deficit than state House and Senate leaders. State tax collections are rising, and many economists think the state is moving toward recovery, even though a substantial deficit remains from the recession.
The governor described the budget challenge last night as the most difficult since statehood and repeated his call for everyone to share in the solution.
"How can we do this and not hurt people? How can we do this and be fair? How can we do this and ask that we all give a little bit but don’t hurt those that are most vulnerable?" he said of the dilemma facing the administration and lawmakers.
Abercrombie said he would not pretend the financial challenge is not dire or resort to what he called tricks, such as delaying state income tax refunds, as Lingle did last year, to balance the budget on paper.
State Sen. Donna Mercado Kim (D, Halawa-Moanalua), who organized the town hall meeting, said area lawmakers try to hold similar events every other month on different topics. Lawmakers invited Abercrombie and Schatz to give their constituents the chance to talk story with the new administration.
"It’s timely because of some of the measures that he’s introduced to the Legislature to balance the budget," Kim said. "A lot of people are concerned.
"I’ve been hearing from people about the pension bill and some of the other bills that the governor has introduced."
During his campaign last year, Abercrombie stressed that he would maximize the use of federal money, and assigned Schatz the task of corralling any opportunities available to Hawaii. He suggested several times that federal money was available and that as a former congressman with ties to Hawaii-born President Barack Obama, he was in the best position to deliver.
Last night, however, he acknowledged that the federal government is going through its own financial crisis.
"We’re on our own," the governor told the audience. "We have to come up with our own solutions."