Hawaii

Hawaii has to be careful to employ every one of its dollars as wisely as it can. Because the state has responsibility for all public K-12 education, its debt tends to be very high, leaving minimal wiggle room for borrowing. At the same time, a series of generous agreements with the state’s powerful public employee unions has put the budget under chronic stress.

There are some indications that Hawaii’s fiscal managers are making at least modest progress at bringing the budget problem under control. “When Hawaii closed the books in 2002, the state had a $200 million imbalance,” says Budget Director Georgina Kawamura. “For the next fiscal year, we were looking at just $16 million.” This is no small feat for Hawaii. “The goal is structural balance,” Kawamura declares hopefully. “It is a definite focus.”

If there is progress in Hawaii’s fiscal management, though, there are smoke and mirrors as well. The state’s rainy day fund is a perfect example. It was created in 1999, with a contribution of $5.8 million. The fund quickly grew to $50 million, and the state’s commitment was to continue adding another $10 million every year. Hawaii has done just that. It also withdraws $10 million a year, leaving it stuck in the sand at the $50 million figure, too little to be of much help in a serious fiscal crisis.

Money C Long-Term Outlook Budget Process Structural Balance Contracting/Purchasing Financial Controls/Reporting People B Strategic Workforce Planning Hiring Retaining Employees Training and Development Managing Employee Performance Infrastructure C- Capital Planning Project Monitoring Maintenance Internal Coordination Intergovernmental Coordination Information D Strategic Direction Budgeting for Performance Managing for Performance Program Evaluation Electronic Government • Population (rank): 1,211,537 (42) • Average per capita income (rank):    $30,913 (19) • Total state spending (rank):    $7,445,512,000 (37) • Spending per capita (rank):    $6,000 (3) • Governor: Linda Lingle (R) • First elected: 11/2002 • Senate: 25 members: 20 D, 5 R • Term Limits: None • House: 51 members: 41 D, 10 R • Term Limits: None

Similarly, Hawaii leaves an impression that it relies on performance measurements and other information to create its budget. It was one of the first states in the nation to pass legislation mandating such an effort. In reality, the use of serious information to actually manage or budget in Hawaii is about as rare as a blizzard in Honolulu. “There is certainly room for improvement,” Kawamura admits. Hawaii has no statewide strategic plan, and although some agencies do a certain level of planning, the measures produced to track performance can be inconsistent and less than meaningful.

Moreover, the State Auditor’s Office has been doing performance audits since 1965. That’s good. But last year, it did only three of them. And although the legislature pays some attention, the agencies seem rather resistant to this source of advice.

The administration of Governor Linda Lingle believes it is ready to start making some significant management improvements. But, even if the efforts bear more fruit than previous ones, they have a very long way to go. With the exception of schools, for example, the state has little funding dedicated to facilities maintenance. The money it does spend is spent without any specific knowledge of conditions that would help ensure its wise use.

The one area in Hawaii’s management where the state appears to be doing a solid job is human resources. The Civil Service Modernization Act, which took effect in 2002, abolished numerous rigidities in the personnel system and made it easier for the state to take aggressive action to fill crucial workforce positions.

This change has been even more important here than it would be in most places. As an island thousands of miles from the next state, Hawaii doesn’t get many opportunities to poach good workers from elsewhere. When potential employees are not homegrown, it’s hard to find them. Consider the civil engineering shortage. Only a few engineers graduate from Hawaii’s university system each year, and needless to say, they can make a lot more money working in the private sector than working for the state.

In the wake of the 2002 civil service reforms, the Department of Human Resources began making some interesting moves. For example, it stepped up partnerships with Hawaii’s colleges and universities to provide faculty to train students who will occupy crucial jobs further down the road. Other personnel innovations may seem trivial but aren’t. An annual governor’s award ceremony for state employees has become a major success. It doesn’t cost very much to stage, and recipients find themselves the subject of flattering attention on local television stations.

For additional data and analysis, go to: http://results.gpponline.org/hawaii

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