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The Honolulu Advertiser
Posted on: Sunday, January 10, 2010

Legislature looks to keep focus on the economy

By Jeanne Mariani-Belding

Hawaii news photo - The Honolulu Advertiser

Calvin Say House Speaker

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This week: Editorial and Opinion Editor Jeanne Mariani-Belding puts Dr. Michele Carbone, director of the UH Cancer Research Center, on The Hot Seat to talk about the center and its new partnership with Hawai'i's major hospital groups. Join the conversation online on Wednesday from noon to 1 p.m.

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Carol: Please describe the financial situation for Hawai'i as the Legislature prepares to convene? What can we expect? It seems like nothing but bad news.

House Speaker Calvin Say: No, I'm very optimistic that it's not going to be as bad as what we had anticipated. I'm really hopeful that we can really try to address the overall budget deficit that we are addressing today. I can share this with the general public, that as we convene this session in 2010 of January, we will be addressing about a $1.2 (billion) to $1.5 billion shortfall.

Please be assured that the state House of Representatives have really worked this past interim in trying to address where the economy is going. I'm very hopeful that we will be addressing the economy as the No. 1 priority, but in general in trying to create jobs.

'Aiea Res.: I have seen so many businesses go out of business. Yet Hawai'i continues to be unfriendly to business and people just can't make it here. What are your thoughts on this?

Speaker Say: I'm a small businessman and I can feel the pain that a lot of them are going through. And that's why I've shared with the House leadership, and with the chair of the Labor Committee and the Finance Committee that (regarding) unemployment insurance I hope we can incrementally address that spike in the increase of the employer's contribution.

I can understand the plight of what we are all going through because I agreed to a 5 percent increase in my lease rent two years ago and I'm forced with a five-year contract of meeting that obligation. These issues I think have to be brought to the attention of a lot of our House members and Senate members who are not in business.

Jane: What are your priorities going in and how do those priorities take into consideration Hawai'i's future? I believe we will come out of the recession and we should be well prepared for that.

Speaker Say: As we move into the session, I personally feel that we'll have to address the expense side of state government. As revenues plummet and expenses rise, that's where the gap occurs. As a community, we have to come together; everyone has to share in that sacrifice.

I'm not here for Calvin Say, but for the future generations. And that's why we have some of our philosophical differences with the administration. As a case in point, some of the deferral of payments of the retirement system and the health fund. I'd rather address the issue upfront now. The deferral of your tax refunds to the new fiscal year is something that I don't really believe we should be doing because you're just changing a date of June 30th to July 1st to balance the budget. But if that's the proposal that the administration has submitted to the Legislature, we'll entertain it. But I want the members of the House to know that this $275 million will not go away. This $58 million deferral of health payments for the health fund and the retirement system will not go away. So why are we differing these type of payments we have to bite the bullet and address it.

Mike from Hawai'i Kai: The state's conduct in dealing with this revenue crisis seems to be based on transferring costs back to the people in an arbitrary fashion when we can least afford it. For example, implementing school furlough days saves the DOE money, but it costs working parents who must scramble for Friday alternatives. Likewise, cuts to social services may appear to be a budget savings, but others will have to bear the cost of obtaining or forgoing such services. Do you agree that cutting core services has been, in effect, a disguised tax hike and that temporarily raising taxes, such as the income tax and even the general excise tax, is less regressive, less costly, and more logical than dismantling core services and programs?

Speaker Say: The question will be to the members of the House, if they have the will or courage to address a general excise tax because it is the most regressive tax you will ever have in the state of Hawai'i. The general excise tax, if you go back to history, was the tax based on every business transaction. Today, we don't have a sales tax, we have a general excise tax. The general excise tax would assess every business transaction. So if people wanted to have a sales tax, do you know what the rate would be? It would be about 12 to 14 percent in sales tax to make up for the income we are generating today.

Matthew: Speaker Say, I have always appreciated your support for rail, which we need to reduce traffic and improve our infrastructure. But I am concerned that some lawmakers may try to take the rail fund again. How can this be prevented?

Speaker Say: I'm only one individual in the state House, even though I'm the speaker of the House. I'll leave it up to the members of the house to make that determination. I don't believe in taking the money at this point in time because Calvin Say did not enact that half percent, all I did was just authorize it.

There have been members who have opposed it and I can respect that, too. But for those on the Central and Leeward O'ahu side, we in East Honolulu and Windward (side) have always said 'no more growth, no more growth.' So we're pushing the growth the urban sprawl out to Central and Leeward O'ahu. And if that is the case, I think we should be obligated to say to these people out in that area that we have an obligation to come up with some alternatives and that's what this rail issue is today.

Ryan: What are your New Year's resolutions?

Speaker Say: Just doing a good job.