On Politics: Even as Hawaii leaders scramble to fill deep money pit, hopes and dreams are pegged on Biden

Welcome to Hawaii, the pessimist’s delight. If you don’t like our economy, wait, it can get worse. Back in 2011, former U.S. Rep. Neil Abercrombie was the new governor, winning on a campaign of “I can handle this economy.”

By the time he slipped into Washington Place, Hawaii’s economy was at the bottom of the Great Recession, the state was running a projected $700 million, two-year deficit and had already staggered through one biennial year of budget cuts and deletions. Abercrombie furiously attacked the budget, looking at slashing public employee benefits, cutting programs, taxing pensions and cutting welfare and Medicaid.

Abercrombie was met with an unconvinced and unhappy crowd at an angry town hall meeting at Pearl Ridge Elementary School that started the voters’ disenchantment with Abercrombie. He lost his reelection.

It is lucky that the present governor, Democrat David Ige, is in the last two years of his last term in office because he is proposing budget cuts profoundly more dire than Abercrombie’s.

Hawaii’s state budget, with its tourist-dependent economy, is one of the worst in the nation. This is not a pessimistic budget; it is an apocalyptic budget.

Instead of a $700 million two-year deficit, Ige is tasked with wrestling with a budget featuring a one-year projected $1.4 billion state budget shortfall.

Ige’s only budgetary good news is that he thinks he can postpone layoffs until the next fiscal year.

At present, the budget is largely based on borrowing money to get through the present lack of tax collections and then hope, hope, hope that federal aid is on the way.

Despite the brutality of Ige’s economy, the plans to attack the deficit are more modest than Abercrombie’s direct focus on public workers’ income.

In legislative testimony last week, Ige Cabinet members said the governor will propose an income tax increase for wealthier Hawaii citizens, perhaps an increase in gasoline taxes and suspending state tax credits and exemptions.

The Honolulu Star- Advertiser reported last week that Ige said raising taxes during an economic downturn is “the last thing” his administration wants to do. He has taken a similar stance with imposing furloughs on state workers to reduce expenses.

But tax increases are likely going to be considered by state lawmakers regardless of whether Ige includes such proposals in his detailed budget plan.

State Rep. Amy Perruso, a Wahiawa Democrat, is calling for a bill to increase the state income tax rate on Hawaii residents with high incomes. But others, such as Linda Chu Takayama, Ige’s chief of staff, said there is a concern among tax experts that Hawaii really doesn’t have enough wealthy people to tax.

“The general consensus is that the tax wouldn’t generate much and we would need much more to generate the kind of money that is needed,” she said during a Finance Committee hearing last week.

So far, the Ige cuts haven’t really been tallied because they are in the formal budget document that is still being prepared. Everyone who has seen their portion of the budget, such as the Department of Education or the social workers depending on state help, is screaming.

Still, Hawaii’s only hope is that President-elect Joe Biden’s budget can carry Hawaii for the next 18 months, until the state and nation get healthy enough to revive a tourist economy that today survives only in hopes and promises.

Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.