Economy still not well, state "surplus" is a fake

Gov. Ben Cayetano is building his re-election campaign on the assumption that the economy is doing well, as indicated by a 4.9 percent increase in tax collections over the same time last year.

But Bank of Hawai`i Chief Economist Paul Brewbaker disagreed, and said this is not an indication of a recovering economy.

Is the economy improving, or not? Perhaps Cayetano himself indicated the truth in his Oct. 15 statement: "We know that the surplus is going to increase because all of the economic indicates have bottomed out and we are beginning to move to recovery."

He went on to say, "I'm not saying we're at recovery, but we're beginning to move to recovery."

In essence, the economy has reached rock bottom in his four years as governor and has not even begun to recover -- we are only starting to begin to recover.

The "surplus" of $120 million was the result of a shift from various special funds to the general treasury -- a one-time cash flow that cannot be repeated.

Brewbaker said the increase in tax revenues was the result of stock sell-off during the volatile summer. Individuals realized capital gains, so taxes were due.

Cayetano, by taking undue credit, is only misleading the public.