This commentary is part of a series of articles prepared by Voices of Educators, a nonprofit coalition designed to foster debate and public policy change within Hawai'i's public education system, in partnership with The Honolulu Advertiser. It appears in Focus on the first Sunday of the month.

Voices of Educators is comprised of some of Hawai'i's top education experts, including: Liz Chun, executive director of Good Beginnings Alliance; Patricia Hamamoto, superintendent of the Department of Education; Donald B. Young, of the College of Education, University of Hawai'i; Joan Lee Husted and Roger Takabayashi from the Hawai'i State Teachers Association; Sharon Mahoe of the Hawai'i Teacher Standards Board; Alvin Nagasako of the Hawai'i Government Employees Association; and Robert Witt of the Hawai'i Association of Independent Schools. Visit their Web site at www.hawaii.edu/voice.

If there was only one thing we could do to create a prosperous future for everyone in Hawai'i, it would be to make a massive investment in public education. New evidence from regional economic models shows that, dollar for dollar, investment in public education creates greater economic growth than economic development subsidies and tax cuts. This is not only because education is highly labor-intensive and a local industry, but also because we live in a new economic age in which human capacity is more important than other means of production, such as land and capital.

In the new economy, we must redefine education policy beyond its narrow focus on student test scores. We need to understand how our policies around tax structures (T), economic development (E) and funding for public education (F) are interconnected and how they are the pillars of creating an economic future that is second to none. We cannot succeed in the new economy by dealing with T, E or F policies in isolation because the sum of the three policies is bigger and more profound than its parts.

We must redefine education policy in terms of the overarching purpose of public education — creating a prosperous and civilized society — and in the context of TEF policies.

An analysis of 30 years of TEF trends in all 50 states shows that state and local tax structures have become increasingly unfair and inequitable, shifting the responsibility of financing public services to those who are least able to pay. States have given away the store in the name of economic development. Funding for public schools continues to be inadequate.

Hawai'i is no different. With respect to Hawai'i's tax structure, it has not changed much for the last 30 years. Taxes as a percent of personal income have remained more or less the same as they were in 1975 — approximately 11 percent. However, they have become increasingly unfair. For example, when you add up all the taxes people in Hawai'i pay (property, excise, income, gasoline, cigarette, etc.), the poorest 20 percent of Hawai'i residents pay approximately $12.60 for every $100 of their income. In comparison, the richest 1 percent of Hawai'i residents pay less than half of that amount — about $5.80 for every $100 of their income.

However, just changing the tax structure would be only half the job; public education must also be fully funded. A recent Grant Thornton study shows that it will take an additional $278 million to fund schools adequately. This does not take into account a backlog of more than $500 million in needed school repairs and construction. Neither does it take into account stagnation and inequities in teacher salaries.

We applaud Governor Lingle's vision for Hawai'i: "We all want a higher standard of living for ourselves and our children ..." To realize this vision, we must address the underlying causes that stand in the way. We can no longer afford to address tax and economic development policies separately from education policies. We must make our tax structure fair and equitable; we must level the playing field for business, large and small. Finally, we must fund public education adequately.

To prepare our children for the new knowledge economy, we need to ask ourselves what is preventing us from doing this. Here are a few facts:

Teacher salaries, when adjusted for inflation, are approximately the same now as they were in 1970. Today, when adjusted for cost of living, Hawai'i is dead last in the nation in terms of average teacher salaries (51st out of 50 states and District of Columbia). The gap between teacher salaries and the salaries of other college graduates has increased from $1,800 in 1960 to $8,600 in 2000 (according to the latest U.S. Census data). Approximately 50 percent of all new hires leave teaching because of poor working conditions and low salaries. This costs the state more than $23 million per year in teacher turnover costs, according to the Alliance for Excellent Education.

To succeed in the new knowledge economy, we must have a fair tax policy that supports and sustains an adequate level of funding to address the underlying challenges that face public education today. We must have an economic development policy that places investment in public education at the top of our economic growth policy.

A recent study by the Alliance for Excellent Education shows that Hawai'i's economy would grow by $1.5 billion if all high school students graduate. An analysis conducted by Henry Levin of Columbia University shows that each new high school graduate would contribute an additional $137,932 in income tax revenues, reduce healthcare costs by $37,388, and reduce crime costs by $167,990 over his or her lifetime.

An analysis using regional economic models shows that whereas an investment of $100 million invested in public education would create approximately 5,200 new jobs, the same amount given in economic development subsidies or tax cuts would create only half as many new jobs. These are just some of the many economic and civic benefits we would receive as citizens by making adequate investment in public education.

Hawai'i has a budget surplus of $732 million. Let's take this opportunity to put Hawai'i on a path to prosperity for good. We may have a seasonal budget surplus now, but we have built in inequities in our tax system. Remember the last downturn in Hawai'i's economy? Let's address the underlying problems with our tax structure. Let's address the underlying challenges public education in Hawai'i faces: stagnation and inequities in teacher salaries, teacher turnover, and working conditions. Let's redefine education policy in the broader context of a comprehensive TEF policy. Let's create an independent commission to drive that policy.

A TEF commission will consist of stakeholders —policy-makers, business leaders, educators, community leaders and parents. It will chart a course and monitor progress. It will integrate TEF policies to create an economic tide that lifts all boats.