A recession, according to the old saying, is when your neighbor loses his job. A depression is when you lose your job. That difference is being learned today by politicians across the state as they settle down for the most important legislative session of the decade. Legislature must
deal with economyRarely are the state's leaders handed such a chance to show their stuff.
Gov. Ben Cayetano is one-third the catalyst, as his calls for excise tax increases, income and business tax breaks coupled with his investigation of Bishop Estate will destabilize the usual political power groups.
Another third of the reason for change is that Hawaii's economy has shifted from boom to slow growth, with a business structure that won't tolerate anything but the sharpest pencils.
Finally, the pressure is on, because it is a major election year with the majority party's titular head, Cayetano, still not a clear favorite for re-election.
Last week the governor described himself as a "fatalist" who would accept whatever happens in next year's election. He probably meant to say he believed in "determinism" because he is working today to improve his biggest liability, a job-shedding, no-growth economy.
Even if Cayetano's economic task force concerned itself with tax cuts, the recommendations included an excise tax increase. Supporters hope it will be mostly exported to tourist shoppers, but critics say the poor will wind up paying a larger proportion of their available money to the state.
Seventeen years ago, when Cayetano was Senate Ways and Means chairman, he unsuccessfully supported a similar plan. Even earlier, former Gov. John Burns backed increasing the excise tax, with special tax credits added to help the poor.
But "Pro-Rich, Anti-Poor Tax Plan" headlines doomed them all.
Interestingly, even Gov. John Waihee faltered when he tried to increase the excise tax to finance a Honolulu mass transit system.
It will be the Legislature, however, that actually puts together new laws changing the state's taxes. Cayetano put the plate on the table. The 76 legislators will decide what to eat.
It will not be their only meal.
No matter what the outcome of the state's investigation into Bishop Estate investment practices, the Legislature will also have to handle new calls to remove politics from the state's wealthiest and most powerful private entity.
For all the incumbent legislators who hope that they too would someday have a shot at a Bishop Estate trusteeship, the mere hint of removing politics from the selection must be a nightmare.
BUT if legislators are to return and to serve past the millennium, next year's crew will have to deal with it, plus the economy.
The state House is already working, holding hearings and assembling a strategy.
The Senate, a less-cohesive bunch, has come to the conclusion there is a problem, but has not reached a consensus.
In the past, the Legislature, led by House Speaker Joe Souki and Senate President Norman Mizuguchi, has neither presented a united plan nor disposed of the problems presented it.
If the legislators are to succeed they will actually have to change our tax laws, reform Bishop Estate and change how government deals with education and the powerful unions.
Anything less and the Legislature will be personally exploring the differences between recessions and depressions.
Read the full text of the
Economic Task Force recommendations.