To Raise Taxes Or Cut Services?

Larry Price
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Wednesday - April 08, 2009
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The interaction between our legislators and the Lingle administration would be comical if there wasn’t so much at stake. It’s pretty obvious at this point that the warring factions at the Square Building on South Beretania Street are not listening to each other.

Last week, Gov. Linda Lingle took a couple of hours to testify before the Senate Ways and Means committee, which in itself is unusual. Governors over the years have passed up the opportunity to be harpooned at committee hearings. Yet there she was, very polite and composed, fielding question from members of the powerful committee for what seemed like an eternity. To their credit, committee members also were very polite.


 

It was all for naught as Lingle failed to persuade legislators to adopt her plan to cut state workers’ pay and benefits. Instead, legislative leaders said they would stick with cutting services, reducing costs and raising taxes to balance the state budget.

To her credit, Lingle was true to form, saying she was open to using a portion of the Hawaii Hurricane Relief Fund to help close the state’s large $2 billion shortfall over the next 27 months - anything but raising taxes.

A couple of very powerful union leaders, echoing their legislative leaders’ mantra, stated they favored raising taxes instead of cutting services. It was as if neither legislative leaders nor union leaders had heard a word the governor said during the hearing.

What does this mean? The public workers have to be wondering what’s going on.

Simply put, it’s a good bet the governor has the opposition right were she wants them. She’s made it abundantly clear that the only tax she was likely to go along with is an additional tax on cigarettes. Maybe the legislative and union leaders weren’t listening, but Gov. Lingle made it clear she would probably not approve any tax hike.


With time running out on the clock, it’s unlikely the legislative leaders can muster enough support to override a gubernatorial veto. If this were to happen, it would create a real financial crisis, because there would be no money to pay employees and fund programs.

This means a special session would have to be called, and that means additional cost to an already stressed budget with no guarantee of a favorable outcome for the fractionalized senators. After all, they have a majority leader who could not get a majority of the senators to support his attempt to pull a bill out of the Judiciary Committee. The attempt was a direct slap in the face to the Senate president and Chair of the committee, especially when they made it known they were against pulling the bill out of committee, something that has not happened in more than 10 years at the Capitol.

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