View Point

Saturday, October 4, 1997

Doing our homework
on job creation

If the state froze jobs for one year
it would boost private-sector employment
and put $1,000 in every family bank account

By Galen Fox

It's nice to have Governor Cayetano calling the House Republican income tax simplification plan "worth considering" and "having found converts elsewhere" (Star-Bulletin, Sept. 23). But Governor Cayetano adds that we Republicans didn't do our "homework" when we suggested that the state would save $180 million by not replacing the 4,000 state employees who leave their jobs in a given year.

Our proposal covers a single year only. For one year, we say replace key vacancies by hiring within government. California has been doing that for six years, not just one.

Of course, critical positions might have to be filled from outside. But we already pointed out that Governor Cayetano has the authority to hire 900 new people. This means he can 1) fill his 900 most critical positions from any source and 2) fill other important positions from within government, as long as he 3) reduces government by 4,000 positions overall.

Here are the basic facts:

First, the best way to create jobs in Hawaii is to increase private-sector spending. Every dollar saved from the government generates $1.50 when spent in the private sector.

Second, the best way for government to stimulate spending is to return money to families through lower taxes. We need a tax reduction, like the GOP House proposal Governor Cayetano calls "worth considering," not a tax restructuring that makes one group winners and another losers.

Third, the only way to reduce taxes is to reduce government spending. We all know state government is too big for our economy, and should be right-sized. Republicans would do this while preserving "warm bodies."

Why fire people? Every employee fired is another job lost. Instead, leave non-critical positions vacant when employees leave voluntarily.

Sure it's harder for those left behind, but Governor Cayetano and his department heads get the big bucks to lead and manage. For one year, they can support the schools by shifting personnel to fill vacancies, even adding the 130 classroom teachers needed to keep up with population growth.

Managers under court order to fix mismanagement in their own departments can fill critical vacancies either through shifts within government, or through limited outside hiring. And while some jobs are supported by special funds, we all know money saved in special funds gets transferred yearly to the general fund.

If the Cayetano team cannot get by with 61,500 employees, the number that worked for the state in June 1991, instead of the 65,500 working for the state in June 1997, something is wrong.

The private sector lost 13,250 jobs in the same six years that the state grew by 4,000 jobs. Shouldn't the state be losing vacated positions?

It's time to reverse the process. It's time to reduce state positions to increase jobs elsewhere.

House Republicans want to turn the economy around through tax cuts that create jobs. To pay for tax cuts, the state should reduce hiring from outside government for just one year.

That single year of saving will come back to Hawaii's families every year as lower taxes and more jobs. For a typical family of four, the tax savings every year will mean $1,000 more to spend on whatever the family needs most.

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Republican Rep. Galen Fox (Waikiki-Ala Wai) holds a
Ph.D. in economics from Princeton University and served as administrator
and overseas marketing manager for the state Department of Business,
Economic Development & Tourism, until his election
to the House last November.