Gov. Neil Abercrombie’s chest-thumping on the improving economy is more political theater than fiscal miracle — and perhaps premature, as Hawaii’s general prosperity has yet to match the uptick in state revenues.
The governor announced the end of Hawaii’s "fiscal sinkhole" at a news conference seeded with an appreciative audience that included his wife, senior staff and Cabinet members.
The state, which has been chasing billion-dollar budget deficits in recent years, ended fiscal 2012 with a $306 million general fund balance, thanks to a nearly 15 percent increase in state revenues.
Abercrombie said it’s time to start restoring state services cut during the Great Recession.
"We have continued a solid, sober and serious approach to financial management, and it is paying off," he lectured. "We’re on the path for a new day."
That remains to be seen. While the state government is riding a revenue stream fed by a soaring tourism market, some growth in construction and an end to many excise tax exemptions, the recovery remains fragile and hasn’t been felt in many sectors of the broad economy.
The needle has barely moved on unemployment, and venerable nonprofits such as Lanakila Meals on Wheels continue to suffer severe funding shortages that are forcing painful cuts in services to some of the most needy among us.
Hawaii governors live and die by the economy, which is often driven by outside forces more than anything they do — as they’re quick to point out when it’s heading south.
John Waihee III rode the Japanese investment wave to a big budget surplus and a sweeping re-election victory but left office with low popularity after the economy turned and the surplus disappeared with the onset of the Gulf War.
Ben Cayetano never caught a break, with his administration bookended by continuing Gulf War fallout at the beginning of his term and the 9/11 recession at the end.
Linda Lingle benefited from the post-9/11 recovery and, like Waihee, enjoyed surpluses in her popular first term. But she was clobbered by the global recession in her second term and left office with echoes of Furlough Fridays ringing in her ears.
After Abercrombie’s rocky start, you can’t blame him for seeking positive vibes where he can find them.
He had a tough initial budget, made more so by Lingle’s deferral of state tax refunds into his watch.
Abercrombie deserves credit for untangling state finances and making difficult belt-tightening decisions, such as demanding sacrifices from his allies in public worker unions, instead of relying on accounting tricks to balance the budget.
But with much economic pain still out there, it’s way too early for victory laps, and gloating words will come back to haunt him if the tenuous recovery fizzles.
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Reach David Shapiro at volcanicash@gmail.com or blog.volcanicash.net.
