Priorities need to be set for government

After attending a session on how to raise financially aware kids, one came away with the thought that perhaps this is a session that public leaders and policymakers should attend for it demonstrated how parents can encourage their children to set priorities for the money they earn.

While most taxpayers would like to believe that lawmakers and other government leaders don’t earn the money they like to spend, the lesson is nonetheless applicable. The session talked about how understanding the value of money is critical to how one manages that money. For youngsters, the first encounter with money usually comes in the form of an allowance and later money is earned doing a job or chore. To a large degree, government leaders are given an “allowance” of sorts of the taxes we pay. However, because there is just so much money paid in taxes, the task of managing that money becomes a dizzying task for lawmakers and other government officials.

As the educational session pointed out, “money” is the value system personified through one’s financial behavior. It is important that parents not only discuss “money,” but also the behavior of handling that money. Parents need to ask themselves about the money principles that they learned while they were growing up. Did the parents experience hardships or success growing up and how did that influence how “money” is viewed today? Did the parents’ families experience struggles to make ends meet or was there more than enough money to go around and how does that now affect the parents’ behavior?

For years when the state basically rolled in riches, no one gave a thought to funding this or that constituent’s request because there was more than enough money to go around. To a large degree, the management of that money was more a task of seeing which constituent made the most noise rather than what were critical services for the health and safety of the community. It is much like the parent who has the means by which to satisfy his or her nagging child in the grocery check-out line, giving in to that candy bar or bag of chips just to stop the child from nagging.

That child grows up assuming that he or she can have what he or she pleases at the drop of a hat. It’s called instant gratification. It is more than likely that the child will expect to satisfy all his wants and needs in the here and now. That is not true of the parent who gives his child choices of how to spend that allowance dollar. It is this parent who strives to teach his or her child the difference between needs and wants. Of course, a parent may see the same “need” or “want” differently from how the child may see it.

For example, a teenager may see designer clothes as peer group acceptance, being “cool” and with the “in crowd,” while the parent may see cheaper alternatives to the expensive designer clothes. So it is with public policymakers who must decide whether the expenditure of public funds is truly needed to insure the health and safety of the community as opposed to a mere “want to have” for the community. Therefore, it is important to evaluate whether or not an expenditure of public dollars is really a need for the community as opposed to a want.

No doubt there are other factors to weigh in on that decision to spend one’s allowance, or in the case of government, that expenditure of taxpayer dollars. Public policymakers, like that growing child, need to ask just how much is this going to cost and do we have the resources to make that purchase? Is this the best alternative at the best price for what I am expecting to acquire? More importantly, is there a good value in return for what is being asked? As we all have learned, sometimes the “best” or lowest price is not the best value for the dollar spent. Finally, will that purchase actually improve the situation for the child or the community?

These are difficult, but important, lessons for a child to learn if that child is expected to grow into a financially responsible adult. Then again, when one looks at government, both in Hawaii and across the nation, one has to wonder whether or not our political leaders ever learned these basic financial lessons of life.

If the state and the nation are to survive this current economic crisis, those leaders perhaps should revisit many of these basic financial principles. Without basic and sound financial management practices, our governments may find themselves in a financial disaster that will be even more challenging than what we have experienced in the past few years.

• 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. Visit for more information.


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