Bolstered by indications that Hawaii has returned at last to a healthy economy, Gov. Neil Abercrombie is proposing ambitious changes and growth in several areas while planning significant changes in utility energy sources. The Legislature should follow his path in most directions as long as it can be kept within what he predicts will be "a healthy positive balance."
"Tourism numbers and profits are on a steady rise, construction is vigorous and growing and unemployment is back down to the low rates that we enjoyed before the recession," Abercrombie told legislators Tuesday in his annual State of the State address.
Problems remain, however, and the governor is taking appropriate steps following the decision by Tesoro Corp. to close its Hawaii refinery, leaving in operation only Chevron’s Corp.’s refinery, which some experts expect to close in a few years. Hawaii’s goal is to receive 40 percent of its energy from renewable sources such as wind, solar and geothermal by 2030, and Abercrombie recognizes the importance of an interim choice of liquified natural gas from the mainland.
Hawaii Gas, a subsidiary of a New York-based conglomerate, wants to begin shipping liquefied natural gas (LNG) to Honolulu Harbor at prices cheaper than the cost of refined oil, but it is opposed by environmental groups as a departure from the goal of renewables. Abercrombie points out that LNG is available now and will reduce energy costs. Meanwhile, he says he will create a task force to examine the issue in the short and long terms.
At the same time, Abercrombie is proposing changes to the system of renewable energy tax credits that now "principally helps those with the capital means to pay upfront for a system" that typically costs thousands of dollars. That change is greatly needed to allow as many residents as possible, regardless of income level, to join in use of clean energy.
Abercrombie also is asking the Legislature to approve major expenditures in the state’s school system. One would provide each student with a digital device, such as a tablet or laptop, over a three-year period. The Department of Education is asking for $42 million over the next two years to pay for them. At this early stage, given other competing programs on the governor’s list, this leans toward the "wish" category.
Abercrombie also called for assurance of all 4-year-olds’ attendance of preschool that "must be accessible, affordable and voluntary for families." That has been estimated to cost $28.2 million a year, allowing children of low-income parents to attend free while higher-income parents would pay on a sliding scale. Again, a good concept — but practical questions remain: How such a network would be set up; how it would fold in parental involvement to optimize and sustain success; and where the millions of dollars would come from.
One source of state revenue proposed by Abercrombie, which would require a 10-cent fee for single-use checkout bags, generating $15 million, is sure to spark debate. All the counties already have approved bans on plastic bags except for certain specialty items; Honolulu’s ban takes effect in July 2015. Another suggestion by Abercrombie would be to increase the conveyance tax on high-end property transactions, but those rates already are significantly progressive, ranging from a dime per $100 for properties of less than $600, to a dollar per $100 for those $10 million or more.
We like the governor’s forward-thinking when it comes to updating the state’s antiquated and uneven computer systems, working off a comprehensive game plan by Office of Information Management and Technology. The idea is to integrate the state’s system for finances, budget, payroll, human resources, acquisition, assets and grants. This investment in coordinated, better technology today should pay dividends in the future in terms of efficiency, in time and money.
Abercrombie also called for increasing the minimum wage next January by $1.50 to $8.75, which would make it the third-highest in the country, following Oregon’s $8.95 and Washington’s $9.19. "Minimum wage earners provide immediate infusion of dollars into the economy," he said, although many employers will claim that it would result in layoffs.
Abercrombie urged legislators to "seize the moment to act with confidence in ourselves, confidence in the people of Hawaii and confidence in the future we determine. The clock is ticking; the time is now."
Indeed, his third State of the State speech was optimistic, for good reason. But legislators should take care to avoid premature expectations of the state’s recovering economy, and will need to choose wisely on which paths to prime for Hawaii to embark on.
