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Lawmakers covered most bases well

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Despite some lingering uncertainty, Hawaii’s economy appears to be mending, and developers who have waited in the wings are showing more confidence in their projects.

In West Oahu especially, there are signs that financial conditions have warmed enough to make the notion of jumping into new ventures more comfortable.

Fortunately, Hawaii lawmakers have not misread these same indicators and are investing to stabilize the state. Although the last few months haven’t been without missteps, the adjournment of its 2013 session on Thursday ought to leave many taxpayers breathing a sigh of relief that elected leaders appear to be moving at a deliberate pace.

From the fiscal standpoint, lawmakers have followed a largely conservative track this session, opting to pledge the state’s recovering revenues first to pay down its most critical obligations.

In finalizing its biennial budget of $11.8 billion for the coming year and $11.9 billion for fiscal 2015, the Legislature settled on a plan that puts $50 million each in the hurricane relief fund and the rainy day fund, a well-reasoned effort to replenish the state’s emergency reserves.

Keeping these funds flush is important as an insurance policy against disaster, of course, but it also pays off in attractive financing terms for the state’s capital needs. Strong fiscal backups earn the state good marks from rating agencies, and that affects the state’s borrowing costs.

Further, the state is making a start on reducing its unpaid liabilities on retiree health benefits, a shortfall that now stands at $16 billion. Budget conferees agreed on a plan for the state and counties to get to $500 million in annual payments by 2018. It’s critical that Hawaii stays the course and gets its government on a more sustainable path.

On the revenue side, it’s remarkable that lawmakers agreed to pull their punches on the various proposals for new taxes, although the temporary boost of the state’s hotel room tax was made permanent at 9.25 percent. It probably took some restraint to stop at that point. Lawmakers may have been influenced by reports that tourism demand was likely to soften as various airlines cut back on their passenger "lift," and that’s a good instinct.

The Hawaii Tourism Authority would be wise to target its tax revenue on those tourism markets that are on the bubble, pitching Hawaii as a preferred destination. The state can’t afford to rest on its laurels here.

Regarding some of Gov. Neil Abercrombie’s ambitious plans, the Legislature rightly advocated a go-slow approach. The Hawaii Growth Initiative, which the governor had envisioned as a $20 million investment program supporting entrepreneurial business ventures, was scaled back in conference committee to a more-reasonable $6 million.

Similarly, the proposal to ramp up relatively quickly on a new public education initiative — using state funds to move toward universal preschool — was wisely dialed back. It seems $6 million is a magic number this year because that was also the amount set aside to subsidize preschool costs for children from lower-income families, through an expansion of the state’s existing Preschool Open Doors program.

It’s smart for the state to first ensure that the public supports the notion of taxpayer funds being directed to private preschools that will participate in the program. The proposed amendment to the state Constitu- tion that would enable this to happen will go on the 2014 ballot, giving both supporters and opponents time to make their best case to the public.

Finally, good-government advocates had to be cheered that efforts to press for more disclosure about those who donate to political action committees have paid off. In the waning hours of the session, legislation was revived, making campaign finance more transparent. Also, public outcry over land-use exemption powers prompted repeal of the controversial Public Land Development Corp.

On several fronts, the legislative effort this year also yielded disappointments:

» The failure to come to terms on a reasonable increase in the minimum wage, which was long overdue, was unfortunate. Lawmakers should revisit this issue next year.

» This was the year when the Legislature should have dialed back the tax credits that have supported the solar energy industry here. These supports were not meant to be permanent.

» The Legislature opted to water down the state’s policy on historic site protections by enabling archaeological surveys on a development to be done phase by phase. Planning for the proper treatment of Hawaiian burials encountered in a development is something best conducted for the entirety of a project.

But on the whole, the legislative session has to be characterized as one in which leadership held the line on spending while restoring funds cut in key areas during the depths of the recession.

Without throwing caution to the wind, they also showed enough resolve to make investments to leave the voting public at least a bit more hopeful about Hawaii’s future.

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