The title of Gov. Neil Abercrombie‘s State of the State address on Jan. 24 was “Our Voyage Together.”

The speech by Abercrombie, a Democrat elected in a landslide last November and presiding over a state dominated by his party, was widely praised for being frank, yet optimistic, about Hawaii’s battered government.

“The breakdown of our government is tearing our social fabric and undermining our economic recovery,” he argued.

In the last paragraph, the governor proclaimed, “Let us right our canoe; Let us act in a pono way and begin our journey back to the heart of our island home with humble hearts and above all, with aloha for each other.”

Three and a half months later, however, there is debate as to whether the canoe of state has been righted — even whether the governor is the lead navigator.

“As always, it’s a mixed blessing,” Abercrombie himself said May 5, the day session ended.

Civil Beat revisits what the governor proposed in his state of the state, and how much was accomplished.

‘Fiscal and Social Crisis’

The governor ended the introduction of his speech by promising a “four-part economic recovery and reinvestment plan.” The components were:

  • Restoring critical government services
  • Pursuing “New Day Work Projects”
  • Bringing federal dollars to Hawaii through the “Hawaii Fair Share Initiative”
  • Making Education “our top priority”

Early in his speech, Abercrombie named seven proposals to grab revenue from other sources to restore government services. Five of them failed:

• ending state-funded reimbursement for federal Medicare Part B benefits for Hawaii government employees (the governor called it “a bonus paid for by taxpayer”);

• taxing pension incomes (“those who are most dependent on their pensions will not be taxed”);

• increasing the alcohol tax, and levying a fee on sugary drinks (“consumption of these and other such products contribute to rising public health costs”);

• and making time share occupants pay transient accommodations taxes at levels similar to hotel room occupants.

The two proposals that survived repealed the state tax deduction for state taxes (though not at the levels the governor proposed) and capped the Hawaii Tourism Authority‘s budget.

In another key area — collective bargaining — the governor said he wanted to “exercise creativity and long-term thinking” to, in part, “achieve a resolution of the crisis of unfunded liabilities in pension funds and runaway health costs.”

Negotiations continue for the United Publics Workers and the Hawaii State Teachers Association, but six of the seven units of the state’s largest union — the Hawaii Government Employees Association — accepted 5-percent salary cuts, a 50-50 split in health care payments and the equivalent of nine extra paid days off a year.

Not a few lawmakers complained that they expected more concessions from labor to help them balance the budget.

The governor promised to “achieve a resolution of the crisis of unfunded liabilities and pension funds and runaway health costs.”

He took steps to reform the Employees’ Retirement System, but not so much with runaway health costs. The Legislature rejected his attempt to end reimbursements for Medicare Part B.

Bottom line: Mixed bag.

‘Most Emotionally Trying Subject We Face’

Continuing in his State of the State, the governor next said Hawaii would have to “scale back on those social services for which funding no longer exists.”

As well, he said that rising health care costs required cutting back on future benefits provided to Medicaid patients.

Abercrombie knew these proposals would not go over well:

This is one of the most difficult things I have had to come to grips with as Governor, but we cannot and will not avoid it or evade the necessity of confronting the issue. I am calling on community organizations, private foundations, and all of us to work together with state agencies in helping to absorb the blows that these changes will bring.

But, like the AARP Hawaii did in defeating the taxing of pension incomes, the organizations that depend on social and health-care services rallied and persuaded a majority of lawmakers to back off.

The Legislature found a way to at least in part protect social services by suspending exemptions on the general excise tax — the single-greatest revenue grab to come out of the session.

The governor, it should be noted, did say in his address, “I am wide open to other ideas from the legislature and the community.”

Bottom line: The Legislature didn’t follow the governor’s tax plans.

‘New Day Work Projects’

The governor said his administration was preparing to launch “the central part of our economic strategy — a broad ranged series of capital improvement actions to be called the New Day Work Projects.”

Abercrombie sees the projects as a latter-day form of FDR’s Works Progress Administration that put people to work and stimulated business activity during the Great Depression.

The proposed projects range from university campuses to state roads and airports to court houses and unused buildings.

“The New Day Work Projects will look to the future and what our community and economy will look like decades from now,” the governor said.

As Civil Beat reported, the state will spend $2.9 billion on capital improvement projects over the next two years.

While not every project comes from the governor, the money going to CIP is more than three times what former Gov. Linda Lingle initially proposed for fiscal years 2012 and 2013.

Bottom line: The governor delivered.

‘Top Priority Must Be Education’

The governor promised to appoint a Hawaii Board of Education, as determined by voters last November, and he did, though he had resisted the idea during his campaign for office.

But other ideas in the state of the state, like a Hawaiian-language university and a Department of Early Childhood, have not gotten far.

And, while $72 million will go to the Department of Education for school building improvements statewide and $60 million will go to the University of Hawaii system for capital renewal and deferred maintenance, UH was shortchanged by the Legislature on other budget requests.

In another area outlined as a priority for Abercrombie — energy — the Legislature did not approve a regulatory structure for the planned undersea power cable. It also did not restructure the Public Utilities Commission.

The governor also said the state needed to transform its outdated information technology, which he said was “one of the biggest factors that is hampering government and costing taxpayers.”

In that regard, the Legislature approved spending $2.4 million to pay for a chief information officer and staff. The office will be supported by a $3 million grant via the Omidyar Ohana Fund, through the Hawaii Community Foundation? (Pierre Omidyar is the publisher of Civil Beat.)

Bottom line: Mixed bag.

Gov: ‘Instant Passage Not Always There’

For some aspects of his speech, such as the Fair Share Initiative, it may be too early to reach a conclusion about his ability to deliver.

And some of the biggest accomplishments coming out of the 2011 Hawaii Legislature did not come from Abercrombie: In addition to an appointed BOE, they include civil unions, gender equity in employment, a mortgage foreclosure resolution process and recognition of Native Hawaiians.

“You don’t always get what you would like to have. … but there is always a feeling at the end of any session that an awful lot of work was done,” he said. “Instant passage is not always there. That’s not the point. The point to be made is structural changes we need to address.”

To that end, as The Honolulu Star-Advertiser reported, the governor told his Cabinet that the new fiscal year in July marks “the real beginning of his administration’s chance to reorganize government and work on priorities such as renewable energy and work force housing.”

Perhaps the governor’s greatest accomplishment in the 2011 Legislature, the main thrust of his State of the State address, was to start a serious discussion on fiscal responsibility that would be an ongoing process, one that challenged sacred cows.

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