On Monday, Governor Linda Lingle presented a plan to engage in short- and long-term steps to bolster Hawai'i's economy.
"We are in full-action mode," Lingle said. "We will not stand by and simply wait for things to get better."
To address economic challenges in Hawai'i caused largely by the ensuing global crisis, Lingle is implementing a five point plan to stimulate the local economy and encourage investment:
1. Increased tourism outreach and marketing.
2. Investing in improvements to our infrastructure and state facilities.
3. Lowering business fees and providing tax relief.
4. Attracting outside investment, especially in energy.
5. Maximizing federal dollars and partnerships.
"In addition to pursuing these action items with great intensity," Lingle said, "we are also cutting spending to ensure that we have a firm handle on our expenses."
The administration is continuing to cut spending in order to address a potential $903 million gap between revenue and expenditures over the next 3 years.
A four percent restriction on discretionary spending for all government departments was implemented in July as well as a hiring freeze for critical health and safety positions, restricted out-of-state travel, and a curtail of purchasing new equipment and vehicles.
The governor's long-term goals include supplying 70 percent of Hawai'i's energy needs from clean or renewable resources by 2030.
The plan comes amid studies which point to a troubled Hawai'i economy in the midst of an unstable global recession.
Last week, a study by Moody's Economy.com found that Honolulu is among two-thirds of U.S. cities currently in an economic recession and that the entire state is at risk. This summer, employment in Honolulu fell by about 5,000 jobs.
In July, the World Economic Outlook estimated global growth to fall from 3.9 percent in 2008 to 3 percent in 2009, the slowest it has been since 2002.
The International Monetary Fund says that the U.S. subprime mortgage collapse has impacted the global financial system that has resulted in high inflation and a surge in commodity prices. The cause they say is linked to lax macroeconomic and regulatory policies in combination with market flaws.
"I think it's inappropriate for the governor to be on the mainland while everyone in the government is trying to figure out where to cut," Hawai'i Democratic Party chair Brian Schatz said. "We need her here to set priorities, and to make sure that these cuts are made with a scalpel, not a hatchet."
Last week, the Board of Education saw a $45.6 million budget cut, $23 million short of what the governor had requested.
All state agencies are currently drawing up their own budget cut plans for the 2009-2011 discretionary budget that will be analyzed by the governor.
[Updated 10/14 9:00 am with quote from the Hawai'i Democratic Party chair.]-----