Over the past few weeks it has become increasingly clear that many public sector unions, as well as lawmakers, are in denial that Hawaii has an economic crisis as evidenced in their refusal to make any concessions in wages and
Over the past few weeks it has become increasingly clear that many public sector unions, as well as lawmakers, are in denial that Hawaii has an economic crisis as evidenced in their refusal to make any concessions in wages and benefits.
This unwillingness to acknowledge the fact that there is no money in the public trough stalled contract settlements and as each day passed, the situation got worse. Not only was the state’s tank running dry, but the moneys coming into the treasury also trailed expectations. And again calls for an increase in the general excise tax rate to offset budget shortfalls came from the public sector unions, in the latest case from the union representing the university faculty. Not only did union leaders put out the call for a tax increase, but the student body leaders as well. For most observers who have watched the university system for years, the Pavlovian response was, “Well, why don’t you raise tuition?”
Unlike primary and secondary education, the university has the ability to charge fees and tuition for the services it provides students. In fact, the local university system has been cited as one of the nation’s best bargains in higher education. While many politicians argue that the low cost of the university permits the financially disadvantaged, i.e., the poor, to get a higher education, one only has to look at some of the leading private institutions of higher education to see that many, if not all, have students who come from the poorest neighborhoods in the country. There is absolutely no reason for a student who is in financial need to forgo a higher education. Having the general taxpaying public subsidize a public service that enhances the value of a person’s future career is an archaic approach to higher education. In fact, one wonders if it devalues the education for the student because it is so heavily subsidized.
On another front, lawmakers are calling for a raid of the state’s hurricane fund in order to avoid the furloughs proposed for primary and secondary education. While the governor is willing to consider this option, she has correctly pointed out that this is a stopgap measure and will be available only for a one-time bailout. Should revenues continue to stumble along, how will lawmakers come up with the money to sustain the current level of services?
That is why it is critical that lawmakers hone their axes and begin to pare back the size of state government. What the current economic crisis has revealed is that state government has grown much faster than the economy that is being asked to support it. As a result, there are fewer and fewer resources available to generate the necessary level of funds to pay all the bills.
However, this dilemma is due in large part to the taxpaying constituency that has been lulled into believing that they can have everything they want but not have to pay for it. A good part of the responsibility for this dilemma falls on the shoulders of lawmakers who attempt to keep everyone happy and pleased with their legislative accomplishments. As a result, nearly every demand, wish or desire that constituents requested has been fulfilled without regard to the long-term financial impact to the state and to taxpayers.
But the time has come for taxpayers, the people who are asked to shell out the money to fund many of these programs and services, to have a say. Lawmakers need to recognize that the barrel is not bottomless and that trying to squeeze even more blood out of the beleaguered taxpayer will only further push the overburdened taxpayer and the state’s fragile economy into a deep dark abyss that will ultimately destroy the economic base.
Beset by those who want government to do more and more, lawmakers need to hear from taxpayers who have grown weary of turning more and more of their paycheck over to government. Tax protests and tea parties put taxpayers in a quirky sort of perspective and allow lawmakers to brush them off as some sort of fringe group. Now lawmakers need to hear from you, as a taxpayer, be it at a neighborhood board meeting or a town hall meeting or perhaps even in a simple letter or e-mail.
It is apparent that lawmakers have come to believe that their constituents want more and more government services when the vast, silent majority hardly registers on the legislative radar. It is time for taxpayers to become a larger bleep on that radar screen as all families struggle with the burgeoning burden of taxes and the government bureaucracy that feeds on those taxes.
• Lowell Kalapa is president of the Tax Foundation of Hawai‘i, a private, nonprofit, non-partisan, educational organization established to research issues confronting governments in the area of public finance, taxation, and public administration. It is supported entirely by private contributions.
