Just one month into his term, Gov. David Ige has already tamped down expectations for new initiatives and expansion of programs.

Last month, as he submitted his budget for the next two-year cycle, Ige noted that government spending would grow over the next two fiscal years due primarily to nondiscretionary spending requirements such as health benefits and raises negotiated by the previous administration.

To him, that means one thing: The state will have to live within its means.

"I think the reality is that we are spending more money than we are projected to take in, so that’s the fiscal reality that I have to live with," Ige said in an interview Friday. "We will be doing that in this current fiscal year and next fiscal year and fiscal year after that, regardless of what we do.

"So I think the challenge is that there will be limited funds."

That will translate into efforts to make the state government more efficient.

"We definitely will be looking at focusing on the things that we can do within existing funding levels," Ige said, "and looking at different things that we can do that don’t necessarily cost a whole lot of money, but can make and have significant impact on improving the operations and efficiency of state government."

Ige is still adjusting to life in the state’s top office. He sat down with the Hono­lulu Star-Advertiser on Friday, one month after making the transition from mild-mannered electrical engineer and low-key state senator to the state’s chief executive.

He addressed a wide variety of topics, from his budget and selection of Cabinet members to his plans for tax modernization.

So far, the biggest change for him is being the person who submits the budget proposal — the starting point for the session — rather than being the one who picks it apart with a fine-toothed comb as he did as Senate Ways and Means Committee chairman.

In the Legislature, Ige recalled, if the caucus wasn’t ready to make a decision on a funding item or proposal, lawmakers simply deleted the amount of funding and passed the bill to keep it alive for discussion.

"I can’t do that anymore as governor," he said. "It’s about decisions about where we start, and it’s about putting out the best recommendation that we can for the Legislature to consider. It’s a very different kind of position because it is the starting point for all discussions of proposals that will be taken up in the Legislature."

The budget submitted to the Legislature last month was largely crafted by his predecessor, former Gov. Neil Abercrombie, but Ige says he expects to have more of an imprint by the time he delivers his first State of the State speech at the end of this month.

Ige said he expects to have his specific proposals to lawmakers by the end of the month, to give them ample time to thoroughly vet his proposals.

Dan Boylan, a political analyst and retired University of Hawaii-West Oahu history professor, said he does not expect anything too far out of the box from Ige.

"David Ige is going to be fiscally responsible," Boylan, who writes a political column for MidWeek, said in an interview. "He is going to think things through in a very thorough fashion.

"I expect him to be fiscally responsible and yet at the same time concentrating, probably more than anyone to this point, on education."

Ige, who had served on an education committee at every step of his legislative career, said he would evaluate Board of Education members and the Education Department on whether they are doing enough to empower schools.

"I really believe that it begins and starts with empowerment," Ige said. "It really is about giving those closest to the children the authority and the resources to really implement programs that make the most sense in each and every community.

"I think my biggest concern over the last several years was the fact that even though the department and the board say the right things, the actions taken have been totally contrary to the notion of empowerment. So it’s really about trying to align the words with the actions. That’s kind of what I’m looking for."

So far, Ige has been meticulous and thorough in his decision-making process to the point that he has faced criticism from some inside the Capitol that he has taken too long to name his Cabinet.

Ige last week named three more department heads, but he has not yet named his attorney general. Ige says he is being guided by advice he received while attending a National Governors Association conference shortly after winning election.

"They really felt that the Cabinet is one of the very first, most important decisions that you have to make, and it really is worth it to take the time necessary to assemble the team that can help you be successful," he said.

Among his most high-profile Cabinet moves was keeping William Aila, former head of Department of Land and Natural Resources, as deputy director of the Department of Hawaiian Home Lands.

"I think that Bill Aila does bring a lot of quality to the administration," he said. "I did want to see change at the department, and I think that I was very fortunate in the sense that Bill Aila was willing to put public service ahead of status or position.

"For me, personally, that’s a very important department. I think I would like to see more progress on all fronts in that department."

Only the attorney general and labor director posts remain unfilled by Ige, who said he expects to complete the process before the Legislative session begins Jan. 21.

Ige also continues work on the package of proposals that will be presented to the Legislature when it begins.

To date, he has emphasized tax modernization and updating the state’s tax collection systems as a key change he expects to implement during his time in office. He described the current systems as "antiquated" and said having better information on who owes what will enable the state to collect money that may be falling through the cracks or going unreported.

"Part of it is people are willing to take more chances," Ige said. "People are more careful if they know that they are being audited or subject to audit or that somebody’s watching.

"We only have so much in resources in terms of tax auditors and those types (of workers), so the better information system we have, the more we’ll be able to examine — on a systemic basis — every single return, and the better we can do our job of ensuring that people are paying the taxes that are owed."

Ige has already said he does not expect to introduce any broad-based tax increases — although he also didn’t rule it out, should circumstances warrant — saying that modernization of the state’s tax system could result in a windfall of its own.

"I really do believe that we are losing hundreds of millions of dollars," he said, "because people are not fully claiming the income that they earn and therefore not paying the full tax take."

In his words…

In a wide-ranging interview with Honolulu Star-Advertiser reporter B.J. Reyes, Gov. David Ige touched on issues ranging from the qualities he expects in his attorney general to potential of sharing more of the hotel room tax with counties. Some of his answers:

QUESTION: What are the qualities you are looking for in a candidate for attorney general?

ANSWER: The attorney general has a special responsibility. Once I make that appointment, the attorney general is the people’s lawyer as well as the governor’s lawyer, and in 90 percent of the issues, that’s one and the same. But there are some issues that being the governor’s lawyer might be slightly different than being the people’s lawyer. It’s about trying to find someone who can provide sound and balanced legal advice.

I still — and I stick to the core principles for all the Cabinet members — want to find people who are collaborative by nature, that really are open to consider all options and then are about doing the right thing the right way, so process is important. The ends do not justify the means in all instances. It really is about recognizing and being willing to commit to good processes as well as good outcomes.

Q: Every year, the state hospitals come in and ask for an emergency appropriation, and we understand they’re readying that again this year. Is that any way to handle it, or can you do something differently?

A: I think it’s about trying to figure out what actions we can take to make the current situation better.

To that end, we have begun negotiations with (Hawaii Government Employees Association) Unit 9 (nurses) as well as with some of the other units where some of their membership is part of the hospital. So I do know that there needs to be some contract changes that are necessary to make the hospital system function better.

I think that that’s kind of the starting point. I think we will be having discussions with the unions and talking about the kinds of things that are essential to allow the hospital system, operating as a government entity, be successful.

Q: Would that be a modification of benefits?

A: I think it’s about just looking at the contract and trying to figure out what makes the most sense within the current collective bargaining law. So it means that maybe we would have provisions that are specific to employees at the hospital. It could be a master contract that applies to everyone and then specific requirements that are special to hospital facilities because there’s 24/7 function. I do know that we need to make the best effort in order for us to get to a point where the hospital system is sustainable.

Q: Are you open to sharing more of the transient accommodations tax with counties?

A: I’ve had good conversations with the mayors and talking about working together. I think it’s about talking roles and responsibilities and who’s responsible for doing what, and then we can talk about resources and how those resources are apportioned.

Like I said, I still believe that we don’t collect all the taxes that are owed. And clearly, as, I think, the state does a better job of collecting taxes owed, that would help with the taxes that end up at the county level. I just believe that we really should take a look at roles and responsibilities, and if there are functions and services that are better provided by the counties, we ought to do that and vice versa.

So, my commitment is to have the full discussion about roles and responsibilities, services that the county and state provide — looking at areas of overlap and trying to work to eliminate that, and the TAT and tax revenues are all part and parcel of that whole mix.

Q: Have discussions taken place on the Hawaii Health Connector and whether to add funding for it in the budget?

A: We do have the (funding) requests for the Connector. I think it’s about getting the new directors of health and human services together.

I’ve had a couple conversations with both U.S. Sen. (Brian) Schatz and U.S. Sen. (Mazie) Hirono about the Health Connector. I think we all agree that preservation and protection of Hawaii Prepaid (Health Act) is kind of the first and foremost consideration as we try and figure out how to proceed.

But I do know that both senators are working at trying to get more flexibility for the state of Hawaii because of Hawaii Prepaid Health. There is no other state that has what we have in Hawaii Prepaid Health, which assures that 90 percent of people already get health insurance coverage.

So I think the challenge for us is different. Some of the provisions in the Affordable Care Act might make sense when you look at where other states are, but it clearly doesn’t make any sense when you look at where Hawaii is. So it’s really about working and trying to preserve Prepaid Health and get to a point that we can administer those other provisions of the Affordable Care Act in a way that makes sense for Hawaii.

Q: Do you care if NextEra takes over Hawaiian Electric, or is it just a business deal?

A: I do care that the leadership at Hawaiian Electric really embraces the goal of getting off of fossil fuel 100 percent in the long term. I really do believe that everything that I’ve seen at this point talks about electric utilities having to change their business model from what it used to be, where essentially the utility was the generator and distributor of 100 percent of the energy needs, to something that separates the generation function from the distribution function so that the utility becomes responsible for distribution and some of the generation rather than 100 percent.

I think that my interest on behalf of the people of Hawaii is to make sure that the acquisition of HECO really does advance the broader desire of the community to get off of imported fossil fuel and really on to more renewable energy sources.