During the Great Recession of the past two years, the House of Representatives, with the Governor and Senate, closed budget shortfalls of $2.1 billion in 2009 and $1.2 billion in 2010. This was accomplished without increasing the general excise tax rate, without increasing income taxes on low- and moderate-income families, and without taking the counties’ hotel tax share (if the State had done this, the counties probably would have had to raise property taxes to make up the lost revenues).

Despite the substantial budget cuts, funds were preserved for child protective services, agricultural inspectors, and other essential state services.

The Hawaii economy is recovering from the Great Recession, but the recovery remains fragile. This has resulted in less than robust increases of jobs for our residents and tax revenues for important state services. Many difficult decisions again will be necessary — decisions that may be unpopular with segments of our community.

Consequently, the short-term future requires responsible, effective, and proven leadership, especially with a new Administration in place. The House has the experience, knowledge, insight, and political courage to continue leading the State through the difficult decisions of the next two years.

I have two co-equal priorities. One priority is to maintain the economic recovery and job growth. The other priority is to pass a balanced state budget that funds essential public health, safety, and education services without a general excise tax increase and without another mass state employee layoff. As of this writing, the State faces a budget gap of between $800 and $900 million over this and the next two fiscal years.

I will do my best to achieve these priorities.

I, however, recognize that the priorities will compete for state funds. Promoting immediate private sector job growth may require the granting of tax credits or funding of employment programs. This will cost the State money that then cannot be used to balance the budget. Conversely, restoring funds for state services and employee compensation may leave little or no funds left for private sector jobs programs. Despite this competition for funds, I am confident that the House will reach an appropriate policy on these priorities.

(On a side note, I support Governor Abercrombie’s call for more capital improvement project spending to increase jobs. Many of those projects, however, cannot begin immediately because of the necessity for pre-construction planning, design, and permitting work.)

Another priority one rung below the previous two is structural reform of the public employees’ fringe benefit programs. The costs of health insurance and retirement contributions for public employees are rising. If structural reform is not enacted now, I fear that the costs of these fringe benefits will continue to rise sharply into the future, assuming a larger proportion of the state budget, and resulting in a substantial burden on future generations. (Concerning this priority, I will support reform only if “prospective”, affecting new public employees and not current retirees. I will not support any diminution of benefits for current retirees.)

I am optimistic about Hawaii.

During the Great Recession, state government and the community recognized Hawaii’s economic and fiscal problems, engaged in spirited debate on how to address those problems for the overall best interest of the people, and resolved those problems through a balanced, responsible, and effective approach, rejecting extremism, negativity, and special interest pressure. State government and the community recognized and confronted reality head on, and made many difficult, politically unpopular decisions that have now placed our State in a better position than many others.

For the future, I am confident that state government and the community will act and reach solutions in the same manner.

Calvin Say has been Speaker of the House since 1999.