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According to a campaign e-mail entitled, “Dollars and Sense – A statement from Mufi Hannemann,” gubernatorial candidate Mufi Hannemann says that the “fundamental difference” between himself and his opponent, former Congressman Neil Abercrombie, is financial. (A screen shot of the e-mail is below)
“I believe we need to live within our means while my opponent either cannot or will not say how much his plan will cost or how he will fund it,” the e-mail says. “Even a cursory examination of his plan reveals hundreds of millions of new spending, including over $280 million on just two pages alone.”
Civil Beat fact checked to see if there were indeed two pages in Abercrombie’s plan that would add another $280 million in state spending.
To do this, we approached the Hannemann campaign to ask what pages they were referring to and how they came up with their figures. The Abercrombie campaign independently countered the e-mail, supplying Civil Beat with its own set of numbers.
The following is what the two campaigns told us and what we determined:
The two pages in Abercrombie’s plan that allegedly add up to $280 million are pages 15 and 28.
Let’s start with page 15.
According to Hannemann spokesperson Carolyn Tanaka, page 15 proposes $212 million in new state programs.
She says that a new Department of Early Childhood, offering childcare and funding for pre-school for all low-income children would cost about $89 million.
Tanaka also says that to restore the Healthy Start program would require $12 million.
Finally, she says on-site child care for state employees would cost $81 million and that “Universal pre-natal care” would cost $52.5 million per year.
So, how did they come up with these figures?
What Abercrombie’s plan says: “In order to develop a comprehensive statewide policy to make a significant investment in early childhood, a Department of Early Childhood will be established with cabinet-level leadership to ensure government services are implemented well, improved continuously, and consistently meet needs.”
The Hannemann Campaign: Tanaka says that the Hannemann campaign estimated administrative costs for such a department to be about $19 million, which she says is “consistent with the costs of other departments in the state budget.”
To check on $19 million figure, Civil Beat looked at the budget of the Department of Accounting and General Services. The general administrative services division has a staff of about 40, and “is responsible for the physical, financial and technical infrastructure to support state departments and agencies in accomplishing their mission.” Its budget for this year, roughly $2.6 million.
Nobody knows how big a department Abercrombie is planning to create, but it seems safe to say he could do something for an awful lot less than $19 million, or even $2.6 million, at least in the first few years.
Tanaka also says that the Department would administer an estimated “$62 million in direct services for low-income families.” To get this figure, they “estimated 8,300 participating families based on US Census data for families with children under the poverty line.”
“Our estimate uses Center-Based Facility Average Full-Time Rates for childcare based on estimates used on page 25 of the 2005 Temporary Early Childhood Education Task Force report to the Hawaii State Legislature from the Hawaii Education Policy Center,” Tanaka says. “Average cost per child under five years of age is $7450 in 2005. Adjusted for inflation , the average cost of childcare rises to $8316.” (You can view the document Tanaka is referring to here. Her calculation of $7450 in 2005 is correct.)
Tanaka multiplied 8300 children by her estimated cost of $8316 for a sum of $69 million.
Tanaka then added the $69 million to the $19 million she estimated for administrative costs for a total of $88 million.
The Abercrombie Response: Abercrombie’s press secretary, Laurie Au, says: “Mufi Hannemann’s ‘analysis’ of Neil Abercrombie’s plan demonstrates either a lack of understanding of the various state issues that will face the next Governor, or a disregard for the facts in order to mischaracterize Neil’s plan.”
Au pointed out that the Hannemann statistics are skewed because, “Hannemann suggests that Neil’s entire plan would be implemented all at once rather than phased in as the economy allows.” She also says that, “Hannemann does not see that there are many ways to move initiatives other than using state taxpayer funds — these include using public-private partnerships, accessing federal funds to make initial investments, and shifting funds to more important priorities that create future cost savings.”
Regarding the proposed Department of Early Childhood, Au says that “Cabinet-level leadership is one of the highest priorities for early childhood advocates in Hawaii. It would put Hawaii near the forefront of early childhood services in the nation and would produce tremendous savings and economic benefits in the long-term.” She emphasizes that “The New Day plan clearly states that Neil is talking about a reorganization of state services currently dispersed in multiple departmental silos.”
Meaning, that Abercrombie’s plan is actually to take a slow but determined approach towards a Department of Early Childhood, but not necessarily erecting one overnight.
Au says that, “$250,000 would fund the existing Early Learning Council, which would be a large step in the right direction and which could be transformed into a department of Early Childhood.”
Our Take: Hannemann’s campaign is painting an extreme scenario, one not supported by the facts in a number of ways. But Abercrombie would be adding an entitlement that would have financial ramifications.
Abercrombie’s plan says: “Healthy Start will be reestablished and strengthened to ensure that the most at-risk newborns, toddlers, and their families get the support they need, avoiding much more costly interventions in the future.”
The Hannemann Campaign: Tanaka says: “The costs for restoring Healthy Start reflect costs at the time the program was discontinued. (Hawaii Dept. of Health 2009, Operating Budget, page 70). This amount does not include any expansion of the program.”
You can read that budget here. Under “Major Adjustments in the Executive Budget Request,” it says the Department “Deletes 2.0 permanent positions and $11,621,158 in the Healthy Start Program.”
The Hannemann campaign rounds up to $12 million but the figure is close.
The Abercrombie Response: Au says that to restore the Healthy Start program to the level that it was at before the Lingle Administration cut its funding would “cost about $3 million in state funds.” She also says that federal healthcare reform law “includes $500 million in fiscal year 2010 for a Prevention and Public Health Fund, which could go to programs such as Healthy Start.” That fund, Au says, will grow yearly and be worth $2 billion by fiscal year 2014.
“Rather than spending public dollars on expensive remedial and emergency services, Neil knows that it is better to shift money to prevention so that mothers and young children can avoid the harsh and expensive consequences of neglect, violence, substance abuse, and poverty,” Au says.
With that, the Abercrombie campaign does admit that “a fully funded Healthy Start program could actually cost $18 million.” However, Au also points out that “it would save much more in public expenditures for incarceration, and other social services.”
Our Take: In the end, the cost would be in tax dollars, but the burden would be shared by the federal government.
Abercrombie’s plan says: “The Department of Early Childhood will ensure that all children, including those in families with low-incomes, can realistically access high quality childcare and preschool services. Employers will be encouraged and incentivized to allow for the family interaction that is critical for a young child’s social and intellectual development.”
The Hannemann Campaign: Tanaka says: “We estimated 9760 children under five with parents as state employees, based on census data and state employment figures. We again used the cost-per-child estimates from the Early Childhood Task Force report. These estimates are for the ongoing annual costs and do not include the up-front capital improvement costs that would be necessary to create childcare centers at state buildings.”
Tanaka multiplied 9760 children by the previously mentioned cost of childcare for children (adjusted for inflation) at $8316. Her figure totaled $81 million.
The Abercrombie Response: Au said: “Mufi Hannemann has expressed no interest in establishing a family friendly workplace in government. Neil believes state government can partner with private childcare providers to provide on-site options for public employees. As experts in the private sector can attest to, family-friendly workplaces can increase productivity, decrease costly employee turnover and retraining, and ultimately save money.”
Our Take: The Hannemann campaign is painting the most extreme scenario. The Abercrombie plan doesn’t say the state would pay for the entire program. Nor is it believable that there are more than 9,000 low-income children of state employees. What state employees make is no secret to readers of Civil Beat. And most aren’t “low income.”
Abercrombie’s plan says: “Hawaii will have universal pre-natal care, including education related to nutrition, alcohol and drug cessation, health care and screening for every child through a medical home, peri-natal substance abuse prevention and treatment services for pregnant and parenting women, risk/needs assessment and intensive home visiting for high-risk families of newborns, universal developmental screening with effective interventions, and school readiness assessments.”
The Hannemann Campaign: Tanaka says: “The costs for providing universal pre-natal and post-partum care are based on per-capita costs from a similar program in the state of New York.”
She says that the program she refers to in New York (which you can read about here) costs about $6,000 on average for “prenatal care, delivery, and postpartum services.” The report does not state the figure as fact but it does use it as an assumption for its own findings. You can find the reference to $6,000 on page 6.
Tanaka cites the same report in determining costs for Hawaii regarding “home visitation programs for expectant parents and parents with infants less than three months of age considered to be at high-risk for abuse and neglect.” The report says that that the average costs per family per year is about $3,500 to $4,000 in New York.
Next, Tanaka says there were 18,801 births in Hawaii in 2009. (Her figure is correct and you can see where she got her information here).
Finally, Tanaka says that According to the State of Hawaii’s Primary Care Needs Assessment Data Book 2007, 27.9% of births had ‘less than adequate prenatal care utilization.'” (You can find the figure Tanaka was citing on page 20 of the report.)
So, using these figures together, Tanaka says: “we can estimate that there were 5245 births which took place with less than adequate prenatal care. To provide these 5245 children with prenatal care, delivery, and postpartum services, as well as home visitation support programs, Neil’s proposals would potentially cost $52.5 million per year.”
Essentially, she took the amount of births in Hawaii, 18,801, and found 27.9 percent of that figure. That comes to 5,245 children. She multiplied the amount of children by $6,000, which comes out to $31,470,000. Then, she multiplied the children by the (higher) figure of $4,000, totaling $20,980,000. Add those together and you have $52,450,000.
The Abercrombie Response: Au says that Hannemann is comparing apples to oranges. “Mufi Hannemann arrives at this figure using costs from New York State. He does not understand that, because of training and salary costs, the Nurse Family partnership model in New York is considerably more expensive than Hawaii’s nationally recognized Healthy Start/Healthy Families service model.”
Au goes on to again point out that Abercrombie will implement his measures over time.
She says that, “As the economy improves, Neil Abercrombie will make young children a high priority because he knows that these are public investments that produce huge economic and social benefits.”
Our Take: Hannemann’s comparison includes “delivery.” That’s not in Abercrombie’s plan. It’s also not clear how many children would be affected, given that Hawaii has a high percentage of people covered by health-care plans. Again, while Abercrombie is clearly talking about new programs, which would cost money, Hannemann’s figures are not believable.
Now for page 28.
According to the Hannemann camp, page 28 of Abercromie’s plan will cost Hawaii $72 million in new state spending.
Tanaka says that “loan forgiveness for physicians for 1500 new physicians would cost the state of Hawaii $60 million.” She also says that that “creating a fully accredited School of Public Health at the University of Hawaii would cost the state $12 million.”
Again, we will examine how the Hannemann campaign got their figures and how Abercrombie responded.
Abercrombie’s plan says: “Hawaii has only 2,600 full-time physicians. We currently need 3,400 and at the rate we are going, we will be 1,500 physicians short by 2020… We must act quickly to increase enrollment at our school of medicine, provide loan forgiveness and repayment assistance for services in Community Health.”
The Hannemann Campaign: Tanaka said that, “For physicians we took the numbers for the Indian Health Services Loan Repayment Program, which is one of the most widely known programs in the nation to incentivize physicians to enter under-served areas.”
She says that “This program provides up to $20,000 per year for physicians who sign a two-year service contract to serve on Indian Reservations on the mainland, each physician will receive up to $40,000 in loan forgiveness grants during their contract.” Tanaka references her figures here.
When you multiply $40,000 by 1,500 new physicians, you get exactly $60 million.
The Abercrombie Response: Au said: “Neil’s plan does NOT say 1,500 physicians would need 100 percent loan forgiveness, as Hannemann’s exaggerated number suggests. Hannemann’s analysis is disingenuous.”
Our Take: Hannemann’s figure is too extreme. Again, his team is implying what Abercrombie is proposing would happen in a year, and would raise costs that much in one year. Neither is true. And those aren’t the only problems with Hannemann’s argument.
Abercrombie’s plan says: “We will begin the process of rebuilding public health infrastructure by reestablishing the School of Public Health at the University of Hawaii, which used to serve the entire Pacific region.”
The Hannemann Campaign: Tanaka says that “The University of Hawaii Pacific Business Center Program estimated that it would cost $11.7M to get the school accredited and staffed.” (She cites her figure, which you can find at the bottom of page 3, here.)
Tanaka says that the Pacific Business Center plan is spaced out over five years and provides a good model for what a School of Public Health might require.
The Abercrombie Response: Au says “If he talked to the University of Hawaii leadership, Mufi Hannemann would know that the University has already made reestablishment of the School of Public Health a priority and is investing accordingly.”
Au takes no issue with the five-year cost of $12 million, but says, “Why he calls this a ‘new state program’ is unclear.”
“Neil’s plan is for the state government to do whatever is necessary to support the University of Hawaii’s efforts in public health,” Au says. “Reestablishing the schools to serve the entire Pacific Region, as it once did, will offset the tremendous costs of healthcare that we currently spend on Compact migrants.”
The $12 million dollar figure is accurate, albeit over five years. But if the university is already investing in a similar program, it seems unfair to imply that Abercombie is solely responsible for wanting to enact it. And you have to wonder why a new school would be created that couldn’t pay for itself or bring economic benefits greater than its costs.
There’s no question that Abercrombie is proposing adding government services. And over time that would involve additional spending. How much? Let’s just say that Hannemann’s argument doesn’t hold water. His team consistently takes the most extreme approach to estimating costs and implies that the additional dollars would be needed right away.