Ignoring the Financial Situation

Public officials have known about the lack of funding for at least the past three years and have been warned about the shrinking revenue growth for longer than that.

For state administrators, it appears that they have not shifted gears into realizing that they need to find solutions to problems in their departments by coming up with new and innovative ways that utilize existing resources. The mantra of state administrators continues to be: “Just give us more money and we can solve the problem.”

But faced with the reality that there is little or no money left in the pot, lawmakers on the money committees have begun to push back. On the Senate side, the money committee chairs have asked department heads to define the mission of their departments and programs and to set measures of effectiveness by which lawmakers can then judge whether or not they are achieving their goals. While this is a step forward in the right direction, with the financial situation as dire as it is, perhaps lawmakers should preface their questioning of the departments with an inquiry as to how much do the departments think they can cut back their budgets and how they can achieve it without jeopardizing the health, safety and welfare of the community.

What is scary is that some lawmakers still believe that there is some untapped source of money out there that they can still tax. One lawmaker, for example, thinks that a nickel per barrel tax on petroleum products imported into the state is an ideal target for a tax increase, because no one will know the difference except perhaps the “big oil companies.” And certainly she is correct, no one will see the direct imposition of the tax as it is paid by the importers of the products, but don’t fool yourself, the importers – in this case the “big oil companies” – aren’t going to absorb that cost. They will promptly pass that additional cost on to their customers who, in turn, will pass the added cost on to us as consumers. So who are we kidding, instead of lowering the cost of living so we can all survive in Hawaii, a lawmaker is proposing that we yet again have higher costs with which to cope.

Lawmakers are not alone in this pursuit of new funding sources. Special interest groups are again targeting the state conveyance tax on real estate as well as a possible surcharge or additional charge on capital gains to fund their programs. Others are looking at the “sin taxes” on alcoholic beverages and cigarettes to fund their favorite programs..

What is scary is that some lawmakers still believe that there is some untapped source of money out there that they can still tax.

It certainly boggles the mind that public officials have not taken the cue that this a whole new ball game. Certainly the message isn’t clear from the top as evidenced in the Governor’s task force proposal which makes sparing mention of government downsizing. With leadership like that, it is not hard to understand why bureaucrats continue to think they can just ask for more money.