One long-time legislative staffer recently asked whether or not it made any difference that Hawaii had a constitutional limit on general fund spending as it appears that there is such a substantial margin between what is being spent and the
One long-time legislative staffer recently asked whether or not it made any
difference that Hawaii had a constitutional limit on general fund spending as
it appears that there is such a substantial margin between what is being spent
and the amount of the ceiling.
Certainly as a result of the state’s
sluggish economy, it is the amount of tax revenues that the state has been able
to collect that has driven the amount of spending. Not wanting to raise taxes,
administration officials and lawmakers shied away from the politically
unpopular even when a group of business and labor leaders endorsed such an idea
to lift the economy out of the doldrums.
That is not to say that elected
officials stayed within the letter of the law. In fact, lawmakers found devious
ways to continue funding programs that they either couldn’t cut or didn’t want
to cut.
Instead of raising taxes or doing the difficult task of cutting
programs, lawmakers started charging fees or raised existing fees. To justify
the higher fees, they earmarked the revenues from those fees to be placed in
special funds to pay for those programs or services.
For those who had to
pay these fees to get the necessary services, permits, or licenses, it seemed
reasonable that what they paid should go toward providing the service or permit
they needed. For lawmakers, they could justify this change on the basis that
people, taxpayers, who got a special benefit from government should pay for it
even if it meant having to be licensed so one could practice his or her
profession.
What lawmakers and the average taxpayer could not see or just
plain chose to ignore was the fact that this scheme deliberately created a way
to avoid the intent of the general fund spending ceiling, which is to measure
the growth of the size of government against the growth in the size of the
economy. By imposing or raising user fees and charges and then earmarking them
into a special fund, legislators moved many former general fund financed
programs “off the table” into special funds.
While the idea of making
people pay for special services they get from government sounds rational, all
this scheme did was allow lawmakers and administration officials to “free up”
general fund monies for other projects and programs that they wanted to keep.
Even more devious is the fact that by pushing what used to be general fund
financed programs into special fund financing, elected officials could create
the illusion that government was not getting any bigger.
The result is what
we see today. The margin between what is being spent and what the general fund
spending ceiling would have allowed is great, with the ceiling much higher than
actual spending. What is actually scary is the possibility that now that
general fund tax revenues are rebounding and there could be as much as $400
million more than lawmakers have already designated to be spent during the
Current biennium, lawmakers will actually go out and spend all of those
forecasted revenues.
If that does happen and programs that were formerly
funded by general funds are now sitting out there with special fund financing,
taxpayers could see is a boom in the size of government that would be
unwarranted. Why? Because delegates to the 1978 Constitutional Convention were
afraid that the size of government would continue to grow faster than the
economy that produces the wealth that is then asked to support that government.
They feared that one day Hawaii may find itself doing nothing more than
supporting government and as a result the economy might collapse under the
weight of a goverment that had become too large.
It appears that those
fears may come true if in fact lawmakers ignore the fact that many former
general fund financed programs are now considered special fund expenditures.
Some might argue that government hasn’t gotten larger, it is just making people
pay for what they get and that service is not a part of government that
everyone is asked to support. How wrong they are! Be it a fishing license, or a
permit to put air-conditioning in an office or serving food at a restaurant,
supposedly those inspections, permits or licenses are to benefit all of the
customers or owners of those businesses.
So like it or not, deny it or
accept it, government has continued to grow over the years even in the most
recent difficult tinies. Unless lawmakers take a look at the issue, taxpayers
will remain cynical about whether or not lawmakers have adhered to the letter
if not the spirit of the constitutional spending limit and kept the size of
government in check.
