The following is the transcript of the "Island Insights" - A Conversation with Governor Linda Lingle.  The show will rebroadcast on PBS Hawaii, KHET-TV Channel 10 on Friday, April 2, 10 – 11 p.m. and Sunday, April 4, 3 – 4 p.m.

“ISLAND INSIGHTS”

A Conversation with Governor Linda Lingle April 1, 2010

There's just one month to go in the 2010 legislative session and nine months left in Governor Linda Lingle's final term. Tonight the Governor is here to talk about the rest of her term, the challenges facing our state and the political road ahead.

Now live in our studio, host Richard Borrecca.

Welcome to insights on PBS Hawai‘i.

I'm Richard Borrecca sitting in tonight for Dan Boylan.

Tonight is a special program. Instead of our usual roundtable format with three or four guests, we have just one, the first Republican governor in almost half a century, the first mayor elected governor, the first neighbor islander elected and first woman elected governor, Governor Linda Lingle.

Back in 2002, Governor Lingle inherited a deficit.  She announced the state was open for business.  A national boom gave us surpluses of more than $700 million, but now the state is bleeding red ink.

State workers are losing jobs, classrooms are shut and the unions report that worker morale has never been lower.

At the same time, the political tensions between the Administration and Legislature make the job of governing all the more challenging.

We know you have many questions for the Governor, and we want you to be part of this conversation.  You can call, e-mail or tweet your questions and comments or you can join our live blog.  The contact information you see on your screen will be shown regularly throughout the program. Send in your questions now so we will be able to include them in the show.

Now let's welcome Governor Linda Lingle. Thank you for being here tonight.

Aloha, Richard.  Great to be here with you.

Thank you very much.  Governor, let's start out by trying to commit journalism and ask you, the teachers have just voted for a plan to approve the furlough Friday removal at the Legislature, and you said you would not fund that plan.  What are your thoughts on it now? 

Well, as you know, based on the percentage of teachers who voted at all and then the percentage who voted in favor, it's just over 50% of the teachers who voted that they liked this plan.  The problem with putting it out to the teachers is that it was something that could never be funded, and that's why I said from the beginning I felt asking the teachers to vote on something that just didn't have the money available wasn't the best thing to do, but the union insisted and the material they put out to the teachers surprisingly really didn't talk about the children. It talked about union solidarity. And it said, no matter what, we're not going to go back in unless all of our union brothers and sisters in the other unions come back in.

But I think, as every taxpayer watching this would recognize, it's not essential to have a groundskeeper there on a furlough Friday.  We need groundskeepers. They play an important function keeping the schools looking well and being safe, but they don't have to be there on a furlough Friday.

And the same is true for various office workers, and certainly we don't need people in the central offices and district offices on those days, so that's why the inflated amount of $29 million. It's just not fair to taxpayers, and it's not fair to other government employees who are right now having to deal with furloughs.

The other side, of course, of the question, is it fair to the children to not have the public school children back in school on those days for the next year?

What I've said from the beginning is that people need to be more concerned about the quality of education than they do the quantity of education, and I think that's a critical distinction to make, not how many days are you in school, but what are the results being achieved when you are in school, regardless of how many days they are.

And I think the average citizen wants to know that the money we're spending is actually producing good results, and that's why I've tied this issue to having the new structure of education.

Now, some people have said, why would you tie the furlough issue to the next governor being able to appoint the superintendent?  And the answer is so obvious and so clear.  It's because you don't want to just throw money at a problem when the system stays the same and we stay near the bottom nationally.

So many people who have looked at this issue, including all of the previous governors who are living have gone on record as saying this current system doesn't produce good results.  So I want people to focus on quality as well as quantity.

I'm not a betting person, but what do you think the chances are that by the deadline they've given now of the middle of April that you and the HSTA and the board of education will come to an agreement?

Well, I don't want to give it a percentage, but certainly we're going to keep trying.  I don't ever think it's over until it's over, and I think there's plenty of time to reach a good agreement that puts the children first.

Is there any bargaining room on your position? Can you go up any amount of money on the deal?

As you know, I have increasingly upped the offer to the union.  This goes back to November of last year, and then I had another offer in January and March, and each time the amount of money has gone up to a point where I believe it's extremely reasonable, and we've used the information that the Department of Education gave us when they said here's who has to be back in school in order for us to function.  It wasn't my list.  It was the department's list, and we're funding everything they said was required, and we're asking the teachers, of course, to give up some of those non-instructional days as well.

So, if the Legislature says they have the money, they will appropriate that extra $30 million, would you fund it?

No, I've been clear that I would not fund $92 million. It's not affordable.  It's not necessary, and it would almost bring us -- half of our hurricane relief fund would disappear just because of this one expenditure.

If you were a mediator trying to mediate this problem, what would you find as the way into the solution for it?

Well, I think I've done exactly that.  What a mediator does is try to bring the sides together, and I have increasingly upped the offer I have put forward.  So, I think from our side, I've been extremely reasonable. 

And I think that the HSTA president, you know, he came to this issue late in the process.  He was not the head of the union when these negotiations began, and I've heard him make the statement that it was the Governor who brought up furloughs, and that's just not true, and everyone involved with this knows it, who is in my office with me from the head of the HSTA, HGEA, UPW and UHPA.  And my proposal to all of them was a graduated pay reduction with no furloughs for anybody. We'll keep everyone working.  Depending on how much each person earns, they would have to have a pay cut.  So the person who earns the least had a 1% pay cut and it went up as high as almost 5 I think at the end.

It was the UPW president who brought up the issue of furloughs. That's how this got started, but the HSTA president now was simply not there at the time and yet he keeps repeating this.

So I think we've learned a good lesson from this that furloughs are really not the way to go, and in the future when they have to have labor savings, which they will have to do because the revenues of the state government will not get back to pre-recession levels for at least three years, in my opinion.

And during those three years our expenses will continue to rise, including our retirement expenses for government employees, as well as the health benefits for retirees.

So I don't think furloughs will work again in the future. I think that will have to be just a straight pay cut.

What was it when you and the union and the Board of Education and the DOE signed that initial agreement, that initial contract that called for the furloughs, what was it that you were thinking?  Why did you do that at that time?  Was there something -- it was the first contract, as I remember.

That's a very good question. It was the first contract, and we felt it was important to get it settled.  So when I met with the Board of Education members and the superintendent and they raised the issue of would I support furloughs, I said, as long as they are on non-instructional days and you can minimize the impact. In other words, bunch them up together.  So, if you have to end a week early, start a week later. Don't have them spread around throughout the year. 

And what they did instead -- and, again, I agreed to furloughs, not to any particular schedule at that time.

But when they went out to the teachers with the schedule, it was every other Friday. It was picking and choosing days as opposed to making it as convenient as possible for the parents and the students.  They picked the most impactful day, negative day, which was a Friday when there were a lot of extracurricular activities, and they scattered them throughout the year.  So I was as surprised as everyone else when that's how things ended up.

There's a lot of different subjects to talk about.  Before we leave education, when you started in office almost eight years ago, you had many specific goals, and one of them was to reform education and to change the Board of Education system and that you tried several different ways, and it never really came about. If you were to analyze it, how would you change your strategy on the whole education reform movement and splitting up the Board of Education?

Well, let me go back to those early days because this were some similarities. As you remember, and as you announced in your opening, when I first came into office, we did face a deficit at that time, and it was a tough and a challenging time, but our opportunities didn't look as bright as they do today, so where the fiscal challenge is so much greater today, no governor in Hawai‘i history has faced what I have faced, not even close, as far as the revenue decline that we have suffered over these past couple of years. 

But the opportunities today I feel are so much greater than they've ever been before, so, in that sense, it's the best of times and the worst of times.

The worst of times because of our fiscal situation and the drop in revenues but really the best of times because of the opportunities that exist in so many areas like renewable energy and STEM education, so I'm excited about the possibilities in the future.

Now, to your specific question about education, the reason we focus so much attention on it through the years and continue to do so with STEM education, robotics, charter schools, the university, because we know that a good education is a key to a healthy community, to a sound economy and to everyone reaching their full potential.

So that's why I've put so much energy into it.  And you remember back in those early days when the Legislature didn't see it the way I did when I felt we needed to decentralize the Department of Education, I thought it was too big a bureaucracy, too many decisions being made in downtown Honolulu when the neighbor islands are so very different as well as leeward and windward.

Well, they didn't see it that way, so they developed a huge piece of legislation that really they admit themselves now has done nothing to help, and the fact is they implemented it.  I think they called it reinventing government. It didn't reinvent anything because we're in the same situation we were in then as far as the results that are not being achieved for our children.

And, even though we can all point to great schools in the system, terrific principals, really qualified teachers, it's just not system-wide.  It's not helping all the children. 

Those are isolated incidents, isolated situations we can point to, and what I want, I want every child, regardless of where they happen to live in our state, to have that same chance for a great education.  And that's why I feel so strongly that the next governor has to have the ability to appoint the next superintendent.

Without that, the public doesn't know who to hold accountable, and I can tell you every gubernatorial candidate would want to have that ability.  And it's a perfect time -- excuse me, Richard. It's a perfect time for this change because I won't be the governor, so it's not me who would have that authority.

It's just saying that structurally for the good of the state, the good of the children, let's allow the next governor to make that choice.

A viewer, Linda from Kane‘ohe, asks a question similar.  If the new governor appoints new board of education members, will the responsibilities of the new members change such as decision-making or budget making?

Well, if it follows the model of the boards that the governor currently gets to appoint, for instance, the members of the Hawaiian Homes Commission or the Board of Land and Natural Resources, it will give the next governor more of an influence because you would pick people  who share your vision for the future.

But the most direct impact would be if you hire the next superintendent yourself because you would share values and direction.

Let me give you a couple of examples from my own departments.

When I brought in Micah Kane to head the department of Hawaiian Home Lands, he and I knew exactly what we wanted to achieve.

I had no way to know just how hugely successful he would be, but we shared a keen vision of where we thought the Department of Hawaiian Home Lands –

He had worked with you as executive director of the Republican Party?

That's correct.

So Micah and I had talked about this for many, many years.  He knew what could be achieved, and he went out and did it, and most objective people would say he really has achieved those things.

Another example, Richard, would be the Department of Human Services, Lillian Koller who I had worked with previously.  She came in and she cut the number of foster children in half in our state. She also cut the re-abuse rate of children in half.  Those were dramatic results.  It was something we had focused on.  We felt children were being removed from their homes at really higher rates than the national average, especially native Hawaiian children, and we were able to get that stopped, and yet also bring down the re-abuse rate.

We took the state housing agency -- remember when I came into office, the federal government had stepped in and they said you have to resign, the board had to resign.  We were designated a troubled agency.  We're no longer a troubled agency as far as the federal government is concerned. We also came in, we got the state hospital out of the consent decree with the federal government. We got the Felix Consent Decree ended.  These were things that were zapping the funding from our state and weren't sustainable. 

But, again, we brought in people who shared my view and were able to get great results. So I really think this is important. I think the public should be given a chance to make their own decision. If legislators want to put on the ballot the issue of the governor can appoint the school board, okay, but also put on there an alternative.  Give people a choice and find out do we want to have the next superintendent appointed by the governor or not.

Have you had any indication if both of these will be on the ballot?

I know at least one of them will likely be on the ballot. But I also know that the public really supports the next governor appointing the superintendent.

If that's not on the ballot, is that a non-starter for the furlough Friday plan?

Well, I don't want to take hard positions on that, Richard, because I really want to get a resolution to this issue.  But I also want people to focus at least as much as on the quality of education as much as they have concentrated on the quantity of education.  It surprised me that people were so upset about how many days you're in class but don't give that same emotion to the lack of good results from our school system. I want people to get really worked up and demand that we have better results, and one way to do it is to hold the next governor accountable for education by letting them appoint the superintendent.

We're always talking about where the money is going to come from, being the hurricane relief fund, and Joey in Hilo wonders, as this is an El Niño year, was that considered in depletion of the hurricane relief fund? Talk about using that hurricane relief fund. At one time that was a no-no. No one would touch it.

I think it's important to understand the nature of that fund, Richard.  That money is not to be used to repair buildings if we have a hurricane or anything like that. It's to help us to kick-start the insurance writing approach.  So, for instance, last time when there was a big hurricane - 1992 - people stopped writing insurance in Hawai‘i, and that's why the hurricane relief fund was brought about, so we could go into the insurance market, purchase, have reinsurance start, so people could get mortgages on their homes and businesses because, without hurricane insurance, the banks wouldn't loan money.

So, again, this money is not to be used to just make repairs to buildings or anything like that. If a hurricane occurred, one of the options would be for the state to sell bonds to get the initial money to get the insurance market going again and could then pay it back by having those insurance companies pay into the fund, just as it happened this time.

So you think that there are other alternatives besides the money that we have?

Using some of the hurricane relief fund would not diminish our chances to recover from a hurricane.  However, it does diminish our reputation with the bond rating agencies because they see that hurricane relief fund as a financial cushion for the state, which it is.  Because if you get into a real bad situation and tax revenues drop, you at least have that.  In their reports on our fiscal condition, they always point to the hurricane relief fund, so I do think everyone has to keep in mind to the extent that drops an amount, it is going to impact how those rating agencies view us.

You know, when you came into office, you came in as a former mayor of Maui, a successful mayor of Maui, and you talked a great deal about the relationship you wanted to develop with the county mayors. I saw reports from a speech you gave in Kona a week ago in which you really blasted the mayors saying that they essentially undercut your position regarding the negotiations for the state employees. Can you talk more about that? Am I being accurate in the scenario?

Most citizens don't realize that in order for me to settle labor contracts, I need to have at least one mayor to go along with me to make an offer. Even when the mayors don't have employees in their counties.  So, for instance, to make an offer to the teachers' union, I needed at least one mayor to go along, and because the mayors rely on the endorsement from the public employee unions, they were really representing the unions in those discussions. They weren't representing management.

And I've made it clear in public, and I've said it before, I don't think they served the citizens well during those negotiations because they were really closer to the union than they were to representing the taxpayers.  I do think it's tied to the need they have to have those endorsements when they run for reelection.

Why would it be that those endorsements would carry that much weight for them compared to the general populous?

If anyone wants to win a Democratic primary in Hawai‘i, it's almost impossible to live without the endorsement of the public employee unions.

Philip in Waipahu asked this question: Was the main cause of the large deficit really the state's unwise investments in the auction securities that came up with the auditor's report?

There's no relationship between the state deficit or our debt and the auction rate securities. They are completely separate and distinct issues.

A deficit is something that you have from one year to the next, and under our constitution, we can't run a deficit. So that means at the end of the year, if you spent more than you took in that year, you have a deficit. So, for instance, Richard, if I would have released all of the money that legislators appropriated and not restricted some of that money and saved it this year, we would have ended this year with a $570 million deficit ... and that would be on June 30^th of this year. So that shows you the wide - over $600 million - swing we would have had, had I not restricted the funding prior to this point in the fiscal year.  So that's a deficit.

The debt would be like what you owe as a homeowner. Your house and car, everything you borrowed money for.  For us, it's when we sell bonds. We have to pay it back.  That's our debt.

Auction rate securities that the caller calls about is an investment instrument. It's one of the allowable instruments under our state law that says when you have cash, you want to earn interest.  It lists about 15 or 20 different kinds of instruments you can invest in, and one of them is student auction rate securities.  That's because you want to earn interest on your money.

We're a multi-billion dollar operation. We have billions of dollars of cash at any given time. It's appropriated. It's not extra money. It's appropriated already for certain things, but we're allowed to put it into investments that are liquid. And what happened in 2008 is that the market froze up.  But the state has not lost $1 on auction rate securities.  They continue to pay a higher rate of interest than other kinds of investments. So we're trying to maximize the interest we can get a return on the taxpayers' money rather than having it sit. But the auction rate securities have no relationship to the state's deficit.

I know you're critical of the audit that Marion Higa prepared on the auction rate securities. But in her very extensive review of the budget and finance office, was there anything in the audit that you looked at and said, ‘Ah-ha, that's something I want to look at or maybe that's could be changed’... a new direction enactment?

I used to always enjoy getting the annual audit that the council would pay for.

I'm sorry to hear that.

Because I would sit and I'd go through, and each department would come in and we'd go through the audit. All right, here there were four findings in your department.  Now let's see how these are going to be remedied over this coming year, and they have a plan and we work to that plan. 

When I came to the state government, when I first got in, I actually took the legislative auditor -- and let's be clear -- she's not a state auditor.  She's a legislative auditor.  They hire her. I took her audits and passed them out to the departments. I said take a look at these, determine if there's some good ideas, things we really could improve upon and every department did that.  So in this most recent audit, there sure are things there that were good recommendations.

What's bothered me on the legislative auditor on these past couple of audits especially, they just overreach. There's too much opinion.  There's too much exaggeration.  For instance, in the audit they did on the Department of Business, Economic Development and Tourism, she came out and told me I should fire the director. That's not an auditor's responsibility to make a statement like that. You're supposed to find things to improve your operations.  That's one of our most outstanding directors. He's been in charge of our energy independence. 

And, with the Department of Budget and Finance, she again overreached and she made a statement that is just completely untrue.  She said that the state shouldn't have bought auction rate securities because it wasn't allowed under the law, and she had an opinion from the attorney general that told her she was wrong, that it wasn't true. The attorney general did an extensive opinion on auction rate securities and why it's clear they are permitted to be purchased under state law.  Now, you can question whether you should have purchased so much or when you purchase them, but you can't just make up facts and say it's illegal.  And even when the attorney general told her, ‘Legislative auditor, you're wrong,’ she came out and said, well, his opinion was unsound. She's not a lawyer. She's not even an accountant. She has no legal background whatsoever to make that statement, but she did.  So that's why I've asked the Legislature to investigate her office because she's not upholding good auditing standards. 

But, sure, there are things in every audit I've ever seen come out if her office that would be good to implement. And I think that's the purpose of an audit is to help a department to be better, to get better. So I don't have any argument with them making recommendations. But when they make ridiculous statements that are just simply not true, not based on the facts, then I really am going to have to call them on it, and that's what I did in this case.

Is there some amount of irony in all of this? Because I remember Linda Lingle campaigning saying, Marion Higa was one of the people who you were going to listen to when you ran both in '98 and 2002.

Well, as I mentioned to you, that's precisely what I did.  But she has changed over the years, and especially with these past two audits. I didn't see anything like this previously.  I also told my departments if there are things here that make sense to implement that after you learn your operation, you think is a good recommendation, let's implement them.  She has no operational experience whatsoever. So sometimes she can make recommendations that simply don't make sense from an operational point of view. It's simply her opinion. 

But again she has no background in law.  She's not an accountant.  She's not operated anything of size that I'm aware of.  That doesn't take away that she can make some good recommendations, and I want to take what's good and what's recommended in good spirit, but these things that have become so personalized and so political and are just beyond unfair. I think she's just not doing her job, and that's why I've asked the Legislature to look into her department.

Let's switch subjects and talk about another big issue for you which has been the native Hawaiian affairs and the native Hawaiian sovereignty bill. We have a question on that, and it is -- oh, I don't know who it's from.  But explain your position or the reversal of your position on the Akaka bill or the native Hawaiian sovereignty bill.

I think native Hawaiian recognition is very important to achieve. There are three native groups in America, there are Alaska natives, there are American Indians and there are native Hawaiians, and I believe native Hawaiians deserve to have recognition. I lobbied for seven years to try to achieve that, and I got Republican Senators in the United States Senate to become co-sponsors because I believed so strongly this was a right and fair thing to do.

For seven years I lobbied along with our Congressional delegation, and then last December, without telling me – without even calling, giving me a heads-up, we heard it from a third-party – the Congressional delegation changed the language of the bill in a very substantial way. In fact, it turned things around completely. And when we asked them why, there really was no explanation for it. 

I think they didn't tell me because they knew I wouldn't be able to support it because the bill that I had supported so strongly said that we'll create an entity for native Hawaiian recognition, and then there will be discussions and negotiations between this new entity and the state government and the federal government. 

But when the change was made in December of last year, it was the opposite. It said there's not going to be negotiations and discussion. This entity is going to be an Indian tribe and have sovereignty from the very beginning, and that's a problem because this entity has no land base.  Whereas an American Indian tribe, they have a reservation and they can have their sovereignty within their borders, but this creates a big problem because, of course, native Hawaiians live everywhere in the state of Hawai‘i, and this would allow the officers and employees of this new entity to not follow criminal laws, the zoning laws, public health laws.

There's also a question on  whether we could keep legalized gambling from coming into the state because if you already have sovereignty over the state – separate from the state government, how could we possibly enforce anti-gambling position on this new entity?

So it just completely reversed itself, and I felt so sad that I was going to have to take that position, but it's in the interest of all the people of the state that this version not be adopted. 

You're a prominent national Republican, besides being leader of the state you're well known among Republicans in the U.S. Senate.  How important will your opposition to this bill be? Do you think that your opposition will kill it?

Well, it depends how many votes the Congressional delegation has.

I think at least one Republican, Senator Murkowski of Alaska, may be willing to support even this version.

I'm not sure of that yet. But there are relationships among United States Senators that sometimes go beyond them taking a position that maybe, they might believe it but they have got to deal with each other through the years, so sometimes they will go along even though it's not what they think is exactly right, and that may be the case for others as well. I really don't know.

But I did feel it was important for me to let all the Senators know because I had lobbied before them so many times. I wanted them so know that even though I continue to support recognition for native Hawaiians and I continue to hope we can get language that I can support, I just can't support this current language.  It will cause a lot of litigation in the state, I believe, and I don't think it's in the interest of all the people in Hawaii. Although I have a very deep love for the native Hawaiian people, I just can't go along with this.

The Lieutenant Governor has come out with a statement saying that -- well, he thinks the bill can be improved, but if it comes down to it, he would be in favor of the existing -- of the new proposal for the native Hawaiian bill. Did you all talk about that before, and what do you think of his thoughts on it?

Well, he has the same opinion as many other people do.  Not everyone sees it the way I do.  Duke and I are very close, but we don't always see issues the same way, and this has been true throughout my time in office. I think now that he's a candidate for governor, it's obviously more important for him to speak publicly when he sees things differently. But this certainly isn't the first time he's done that.

You can remember about a year or so ago on the high technology tax credits, he took a different position than I did and that's because he viewed it differently. There have been actually some cases where he and I don't see it the same way and he's convinced me to see it his way.  One that comes to my mind is you remember the bill about leaving infant children, you could drop – I think it was called “Baby Moses bill,” is how people referred to it. You drop a child off at a fire station or hospital, and I was going to go along with that, and he convinced me through a lot of discussion that it wasn't in the best interest of the state.  So he and I haven't always agreed. Generally we share a lot of the same values, but I wasn't too surprised because he is native Hawaiian. He has very strong views about native Hawaiians, as I do, and he's just willing to wait and see what happens. He says, if it goes into effect, maybe we can change it, maybe we can make it better. I hope we can advance, but, if not, he would still go along with it because he feels, as I do, so strongly about native Hawaiian recognition.

Okay.  We've got more questions back on the budget. Ray from McCully is asking, can the Governor explain how the elimination of the 228 positions of the eligibility workers in the department of human services will streamline the welfare application process?

This is a great question.  When people need public assistance, they have it available to them in many different ways. They can perhaps be eligible for food stamps, for health insurance which we call the Medicaid program, perhaps a housing vouchers and cash assistance. Right now you have to go from department to division to division to get that. So, if a person walks in and already they are having a tough time, and they say, ‘Well, I have a child, can I get food stamps to help? They say, ‘Okay, fill this out and we'll see if you're eligible,’ and then at some point they make a determination.  And then the mother says, ‘Well, could I get health insurance for my child?’ ‘Oh, you have to go somewhere else for that.’ So you go from office to office as opposed to having one place you go and have your eligibility determined for a whole range of services that are available from the government at one time, and it would make it so much easier for the person getting service. 

Also, the federal government has encouraged the states to go to an online system because it's easier, it's faster, it gets benefits to people, and it does not increase fraud even though that would be your intuition to make it easier to scam the government. But nobody checks on you now.  So even though you come in person, no one goes to your house to see do you really have someone else living there who is contributing income and putting you over the limit. No one does that now

Are they supposed to be? Is someone supposed to be checking?

No, it's just too many people. You could never hire enough workers to do that. Usually it's because someone reports on someone. They say, ‘Hey, I know this person and here's their real income,’ and then you go out and investigate. But that can happen whether you're on-line or you go in person.

So this reduction in our work force which will save $8 million a year in our labor costs.  The real reason to do this though is to become much more efficient, to help people when they need it as quickly as we can rather than making them run around to these different offices.  This approach has now been done in several other states very successfully.

Isn't it, though, off-putting to have just, have this done by the telephone? What do you do with people who have a difficult time with the telephone, people who may be deaf or can't speak or may have had a stroke or something like that? How do those people get assistance?

It's interesting because no one has asked the question, ‘How do these people get transportation to go in person to the office?’ That's a very difficult thing to do for many, many people who don't have access to a car, but we have the ability through our public library systems, our community health clinics, through other non-government agencies but non-profit agencies to give persons assistance.  So, if you need to use a computer, for instance, you can go to a public library and use one. If you're at a community health center and you believe you should be eligible for Medicaid, they are certainly able to provide that kind of assistance to you.

So this is really helping the person getting the benefits. It's getting the benefits to them much quicker and it's reducing them having to come to the office every time there's a change and having to talk to their caseworker.  What if their caseworker is on a vacation?  What if they are sick that day that you came down?  Right now what happens, you have a long wait.  Hours go by, as opposed to going on-line. 

Almost everyone today does have a computer, access to a computer, or an ability to get help through one of these other kinds of agencies.  I think to treat people as if they are wards of the state, they can't even for themselves get to a telephone, it is really creating a dependency on the government and the government employee as opposed to respecting people as dignified individuals who simply need help at this point and getting them that help as quickly as you can, as efficiently as you can and as compassionately as you can, and that's what this new system will do.

The unions are already saying that in the process of eliminating these jobs you had not bargained the job action itself.  What's your response to that? What's going to happen on this?

Every time we have made an attempt to reduce the expenses of the government and to improve the service delivery, both the labor unions in coordination with state legislators have had public hearings.  They've filed complaints with the Labor Relations Board, so this is a pattern.  But it's not going to stop progress. It's not going to stop us from getting our expenses under control because we have no choice. So the sooner that legislators face the fiscal reality – I think many of them are still in denial – the sooner they face the reality, the quicker we can get through this difficult period.

Again, our revenues are not going to come back to pre-recession levels for the next two to three years in a best-case scenario. So that means our expenses have to get under control and we have to get better at what we do.

You know, I said over a year ago that when we get out of this difficult period – which we will, we will get out of this - we will not be the same government. We won't look the same. We won't deliver services in the same way, but we can be better, more efficient and we can decrease the public's dependency on the government and really have the private economy start to grow more rather than an over-reliance on government and that would benefit everyone.

When you talk about growing the economy, we have a question, Michael from Kahului asks, how can the governor say she wants to create jobs when she didn't step in to save jobs as in Aloha Airlines and the Superferry cases? Also, does she feel if jobs like those had been saved, would our economy be better?

Well, every time there's a potential loss of jobs in the private sector, we do get involved as early as we can. We try to do the best we can. And, in the Aloha Airlines case, Richard, it's an interesting one because I was involved long before Aloha Airlines was forced to declare bankruptcy.  I went to the federal government on behalf of the Aloha Airlines employees to the PBGC, the Public Benefit Guaranty Corporation, which steps in and takes over the pensions. They come in and start to pay the pensions of people, and they were not going to do that, and the president of Aloha Airlines at the time, David Banmiller, asked me to go in person and I did and we were successful. So whenever there's an opportunity for me to save jobs or have our employees treated fairly in the state, I'm going to take that opportunity.

The other case that was mentioned of the Superferry.  As you know, no one worked harder than I did to keep the Superferry afloat for the employees but really for the people of Hawai‘i. It was a great service. It was the Supreme Court decision which was so unfortunate that put them out of business.  It was just really too bad that that occurred. I think it was unnecessary.

Another question: How do you think that the federal health insurance reform act will impact us here in Hawai‘i? Will it impact the Hawai‘i pre-paid health care act? 

We don't know the answer to that question yet. This piece of legislation is 2,500 pages long. We're just discovering now what's in it. I have been meeting with our state insurance commissioner, attorney general, health director and others, and at this point we just don't know. There is a state law that says once there is national health care, that the pre-paid health care act will no longer exist, and we are trying to look into that situation right now.

Isn't there an exemption written in?

There is no exemption that we reviewed. Again, it just says when there is a national health care system in America, then the pre-paid health care act will cease. So what does that mean exactly? We're trying to make that determination now. 

I don't think people really understand what the impact of this bill will be. We know one thing for certain, it will add to the national debt. It will make the cost of doing business in America more expensive, and remember, because we're a tourism-based economy, it's not just what's the direct impact of this bill on our businesses here, but what's the impact on the nation.  Because unless the economy is strong across the country, people don't have the money to come and to travel into our state. So I am focused on job creation.

I don't yet know what the overall impact of this health care bill will be, but I think it's going to be more expensive for all of us as Americans. I think that's clear.  You simply can't add another trillion dollar program and not have it have a negative impact.  In addition, and finally on the health care plan, the fact that they had to make special deals with the different states I think shows that people weren't convinced it was a very good idea.

Do you think that the state of Hawai‘i will wind up suing or joining one of the other lawsuits regarding the health care act?

Well, we're still taking a look at that.  But we're looking at a different issue than the one that has been talked about nationally.

Nationally they've talked about suing over whether the federal government could force you to purchase health insurance.

I've been looking at another issue that bothers me a lot, and that is the special deals that were given to certain states.

So, for instance, in the state of Florida, Medicare advantage will -- which is a supplemental Medicare plan -- will continue to be funded but not for our seniors here in Hawai‘i.

Also there are states under this bill that are called frontier states.  Now, it just means they are somehow in the west, it's not California, it's not Washington but Montana and Wyoming and North Dakota. They are called frontier states.  They are going to have higher reimbursements for their doctors under Medicare, higher reimbursements for their hospitals than the rest of us and that's just not right. And I think it's treating different Americans differently.

Our hospitals, we have a higher cost of living here.   Our doctors face higher costs here than in those frontier states, and yet those states are going to get more under this national health bill.

So I think that is questionable whether you can treat Americans differently from state to state, and we're looking at the legality of that.

Okay. We have another question. Rose Marie from Liliha asks, this is back on the human services question. It says I'm elderly and not computer literate and will never be able to do what all this on-line stuff, and I think she's asking, so how is she going to be able to file for some sort of food stamps or other medical assistance.

Well, let me make something clear first. If a person just can't have access to a computer, they are able to call in on a phone. They are able to fax in.  But I've been thinking a lot about this, especially for older people, and, again, AARP which is a service organization for the elderly can take a laptop to someone's home.

They can have a day when you can all come to the same place, they can help you on-line.  There are many ways to get to the heart of this issue which is access to benefits as efficiently and quickly and fairly as possible.  And this plan that we have is going to help this person in Liliha who needs to get benefits. Again, have someone come with a laptop and in ten minutes you'll go on-line and you'll get your benefits as opposed to that  woman having to get on a bus, down to an office somewhere for one kind of help, and then somehow find her way to another office for another kind of help.

The new plan that we have is going to be so much easier for someone like this.

This is the one I've been waiting for.  Bernard from Hawai‘i Kai asks, regarding the Governor's stand on the rail project, if she does not sign off on it, what alternative, tangible solutions does she have to combat the worsening vehicle congestion?  You're nine months away from finding out exactly what it's like to be driving by yourself around Honolulu in rush hour.

Well, it's eight months left, Richard. I heard nine in the introduction, but I'm going to be working hard every single one of these days for the next eight months, and this rail issue is a huge issue for the people of the island of O‘ahu and for the entire state, for that matter.

It's the most expensive project ever undertaken in the state. It will create an amount of debt that will be very difficult for the people, I think, to with stand. And I think it's a fair question to say, okay, but if not the rail, then what?

And there have been good suggestions made about making the rail system instead of all above ground, make it halfway at street level and half above ground and that would reduce the cost by $2 billion, and that would reduce the debt on people. So there's a huge difference between what's been proposed and what could be implemented.  So I think that's one response. 

But we're not going to wait for rail because rail is -- regardless of which system, it's years down the road.  And we need to do things now, and we have, as you know, by getting the North-South Road open. We're now going to move forward with the p.m. contraflow lane and also, of course, to create jobs out in the region so you don't have as many people making this long commute across the island.  And we've been so supportive of the Ko Olina resort, of the programs out there.  And of course Disney will be opening there in 2011.  It will be at least 1,000 jobs there.  So perhaps people who were commuting will be taken off the road in that way, they won't have to come into town to work. 

We've also been big supporters of UH West O‘ahu which will be another way instead of people driving to Manoa, another way to keep people more in the region.

If you could, would you stop the rail project now?

That's a decision that the city is going to have to make.  But what I am going to do is a financial analysis, and if I feel it's something the people simply could not afford, if it's something that doesn't make financial sense, I won't sign off on it and neither will the federal government.

As you know, they have raised an issue about the city's financial plan and they've said it simply doesn't work now as it's been presented, and one of the things that the federal government looks at very closely and they made this point to me when I was with them in Washington, if the city or any city is going to take a lot of money away from the existing bus system, they don't like that as a financial plan.  And this plan has $300 million being taken away from the bus system to make the financial plan work for rail.  So that's something that's going to have to be looked at as well.  You might be able to say rail can work, but would you degrade our existing bus system so much that it would just have a poor quality of service, so that also has to be looked at.

We have two questions from viewers who want to know how you would rate yourself as the governor.

Well, I rate myself as a very hard working person who cares very deeply about the state, who does my very best every single day. I'll leave it up to others to put a letter grade on it, if they like.

But I think as with most leaders, certainly in politics, history is really the best judge.  Because as everyone knows, often times when people are actually in office having to make some very tough decisions sometimes and some controversial decisions at other times, at the moment perhaps people don't see the big picture, but over time those very same leaders turn out to be among the very best. And I'm thinking of another politician who -- I was born in the state of Missouri, as you know, and another politician from my home state of Missouri, Harry Truman, when he left office, he had approval ratings in the 20s.

Thankfully I'm not at this  point.

In fact, I'd like to thank the people, if I could, just for all the support they give me, whether I'm working out at Nu‘uanu Y or at the movies or making a speech.  They really have been very understanding.

But as with President Truman, at time he was in office, he had some very tough decisions, and while I'm not comparing my decision to see his, history has rated him much, much higher than they did at the time. 

So I'll let history be the judge, but I can promise the people I'll work hard every day, give it my very best and that I love my state and I love the people of Hawai‘i.

Mike from Kane‘ohe asks, does Governor Lingle see herself as a future senator of Hawai‘i?

Well, I think it's a little premature, but I certainly want to do something that continues to contribute to our state.  I don't think there's another place like Hawai'i on Earth, and I certainly want to continue to be a part of our future.

So it's something I would consider, but not something on my mind right now.

What would cause you to run in 2012?

You know, politics is a matter of issues at the time, how people are viewing things at the time. I was a mayor, I was a council member and sometimes it just -- it depends on the issues you bring to them.

I do believe it's critically important that Hawai'i have a more balanced political representation in their Congressional delegation and in our State Legislature. I think the people of Hawai‘i would get much better results, better decisions out of the Legislature if you had a more diverse mix.

Right now you tend to have an overwhelming number of Democrats, and so the public is really kind of shut out a lot of what's going on.

Have you seen more Republicans in the fall elections in office?

I do.  I think this is going to be a very good year to run for the State Legislature as a Republican, and I think it's because legislators have really ignored the major issue of the day, which is job creation, and we've given them a whole series of great proposals on how to stimulate the economy through job creation, and instead they have spent much too much time on things like cock fighting and marijuana stores and other issues that might be important to a small number of people.   It's not to say they are not important but a leader has to say, you know what, we're going through the worst fiscal crisis in state history, our economy needs to be rebuilt, we just can't take up cock fighting right now.

You're talking about time for the Legislature, time for the show is over.

Thank you, Governor.  We thank you for your time here tonight and hope to see you on Insights again soon.

I'm Richard Borrecca sitting in for Dan Boylan.

Aloha.