Analysis: Big budget deficit makes 2010 Legislative Session most important in history

HONOLULU—Get ready. This is a good news-bad news story. Next week, the 2010 legislative session opens and it could arguably be one of the most important in generations.

As Hawaii continues to cope with a projected 1.2 billion shortfall—one which may grow as we move through this year—finding the money to close the gap will significantly change what government is able to do according to Senate Ways and Means Chair Donna Kim and House Finance Committee Chair Marcus Oshiro. Both spoke last night on Hawaii Public Radio?s Town Square and for anyone hoping that somehow the 2010 session would keep safe any of the programs and services not already touched last session, start steeling yourself now. Kim and Oshiro say it?s going to hurt and everyone in Hawaii is going to feel the pain.

Kim says the impact of the budget crisis is one Hawaii has not seen before. Juxtaposed with 2010, last session?s scramble for dollars will look easy by comparison.  ?While we made cuts last session I think we took all the low hanging fruit and it was a difficult one to do and it was painful,” Kim said. “And so now to come back in and get another 1.2 billion—it?s going to be even worse.”

Oshiro points to the revised Council on Revenues adjustment from negative 1.5 to negative 2.5 in general fund tax growth for the next six months. But he says tax collection is already 8.5 percent behind last year so there is more of a loss than most people realize. “It?s going to be a tough, tough session,? he said.

Yet many people still want the same services, programs, and jobs with no tax hikes to cover the deficit. Others have countered that we should run state government similarly to the way we run our home budgets and only pay for what we can afford. Although it?s simplistic to mirror the state budget with what happens for many of us at home, there are a few similarities.

We frequently make decisions about the future based on what income we think we?ll have then and what we currently have. But the difference in creating an individual budget is fairly stable income. Even if yours has been cut, if you?re working, you still have a certain amount flowing into your wallet at fairly predictable intervals. And unless your brain is stuck in the economic culture of two or three years ago, you?re probably more conscious of living within your means. That sounds like a good philosophy for government, too, but unlike personal budget forecasts, government budgeting is more complicated.

The projections and adjustments made by the Council on Revenues have more collective weight in their margin of error than, say, what happens if you or I find ourselves out of budget a few hundred or even a few thousand dollars. A 1 point drop in a Council on Revenues projection means a 40 million dollar differential. Government, and consequently all of us in some way, dance on a shifting carpet. While we may want to make sure everyone gets to tango, we?re going to run out of rug before the music stops playing. Knowing this going in argues for examining what essentials government can and should fund.

Kim and Oshiro say they are both fiscal conservatives and that core functions of government have first priority in creating public policy. But whose core functions and whose public policy? In a sea of worthwhile programs, and differing opinions among those within the walls and outside the Legislature, it?s difficult to get agreement on what exactly constitutes these non-negotiables.

?Over the years, core functions seemed to have expanded depending on who you talk to and who is in the position to make these decisions,? Kim said.

Core functions are also often fungible and shaped by the specific needs of different neighborhoods, counties, and demographics. Good public policy, it seems, is a matter of who lawmakers agree with and how bills that actually pass out of the Legislature translate when interpreted and implemented.

?This is a day of reckoning for all of us,? Oshiro said. ?You can?t have it all. What do we want from government??

For Oshiro, it’s education, human services for the most needy, and health services for those who otherwise would have no access.

Kim cautions it?s not just the programs lawmakers have to review. She also advocates scrutinizing the greater part of the budget: state worker salaries, benefits, and on-going costs.

Both Kim and Oshiro agree our Culture of Nice helps to perpetuate inefficiency, lack of accountability and waste—nothing most of us haven?t heard before. But Oshiro explained: ?People do lose their jobs in state and county government for nonperformance. Part of the responsibility of a manager or a supervisor is to make those hard decisions.?

Some supervisors and managers, he concedes, aren?t willing to assume that responsibility, and it’s why more directors and deputies must clearly articulate and enforce the performance standards they expect.

Regardless of rumors that there may be some legislative paralysis given that this is an election year, Oshiro says both he and Kim form a team and they will continue to take on many of these unpopular issues. He says he has also put candidates on notice that they had better come in with a first-hundred-days plan to deal with the budget shortfall. He hopes the public will take the economic wake up call seriously and show up for hearings.

If you?re still with me, you may be saying: “Wait, I thought there was supposed to be some good news here.” I think there is. It?s a funny thing with we humans. Bad stuff, extreme challenges can force us, if we?re honest with ourselves, to examine our behavior and our expectations of others—including our government. On the other hand, adversity can give us every reason to feel victimized, spiteful, and even more entitled. It?s what we want to pay attention to. It?s what we choose to act on. So beyond all the New Year?s resolution rubbish and political promises, which will soon blast across screens and shout from speakers, what?s one thing you can and will do to help change Hawaii?s sorry state? Figure that out and you?ll have your good news. 

Beth-Ann Kozlovich is the Talk Shows Executive Producer and host of Town Square now in its 11th year at Hawaii Public Radio.