After emerging from a fiscal tourniquet, Hawaii lawmakers are positioned to convene a new Legislature with an easing of capital improvement debt and a positive outlook for tourism, the state’s primary economic engine.

This should enable a measure of optimism leavened with caution — the only kind of optimism that’s reasonable during a fragile recovery — and that’s a good thing. Optimism will allow decisionmakers to take a long view, making investments that will help the state capitalize on growth as it materializes. The caution will stay their hand from loosening the belt more than a notch, at least for the immediate future.

Economic data in recent weeks has been mixed. Hawaii’s jobless rate, well below the national average, has ticked down in recent days but still has not made a sustained improvement. Bankruptcies fell again in November, but the experts view that with trepidation, one describing the situation as people "treading water," financial security still a long way off.

However, it’s impossible to ignore the rosier horizon. The Abercrombie administration, frustrated in its attempts to launch its "New Day" initiatives, last week finished its difficult first year on a bright note, announcing the completion of a record bond sale of almost $1.3 billion. That breaks down to a sale of $800 million in new bonds and the refinancing of $488 million of existing debt at a lower interest rate.

This was a prudent move by the administration, with Budget Director Kalbert Young at the helm, taking advantage of a borrower’s market but doing so in a way that left credit rating agencies reassured about the state’s fiscal management.

The refinance looked like a good option earlier this year — closing the state’s fiscal gap had drained its reserves — but Young decided to wait until the state’s Comprehensive Annual Financial report for the 2010 budget year was completed so as not to worry investors. That turns out to have been a canny instinct: Not only did the agencies reaffirm the state’s strong credit rating, but the turbulence in European markets through the fall made Hawaii bonds look even more attractive by comparison.

The bottom line for the state Capitol number-crunchers is that the refinance — retiring some debts sooner than expected — will save the state about $59 million over six years, money that will surely help while tax revenues recover. And using the $800 million to replenish state rainy-day and hurricane funds and to invest in capital improvement projects already in the pipeline is also wise, a demonstration of good fiscal policy and a strategy to jump-start the state’s lagging construction industry.

Legislative leaders seem amenable, as they should be, to adopting this approach as they begin drawing the budgetary blueprints in January.

But none of this diminishes the overarching challenge of the coming session: deciding how to deploy taxpayer funds, which are still going to be thin, while the economy remains weak. There will be great temptation to restore many of the cuts that have been made in the past two years.

To a large degree, the state still must resist a return to business-as-usual budgeting. Business is not as usual, not yet. The state’s executive and legislative branches have to come to terms over which programs get the priority — surely, repairing the state’s strained social safety net should rank high on the list.

A careful approach in the next year will help to assure that economic recovery and growth becomes more robust, leaving the state freer to seize on opportunities at hand. That is the way to usher in a New Day that can be more than illusory.