It calls for cool heads and reasonableness on all sides. Unless rival interests can be reconciled, the prospect of getting congressional plus state OK of a final sovereignty arrangement is remote. Severe damage could be done to the state's fiscal health.
The crisis has been triggered by an unanticipated court decision that Gov. Ben Cayetano says could cost the state $300-$500 million. It could even be $750 million, says the governor's friend and 1980s legislative colleague, Clayton Hee, chairman of the Office of Hawaiian Affairs, which won the case against the state.
One factor in the cost run-up is a requirement for the state to pay 10 percent interest on its delinquencies, a rate that doubles them in under seven years. The present claims trace to 1990 and might be stretched to 1982.The $64 million mentioned in an OHA publication as the cost of the court decree is just the tip of the iceberg, even Hee agrees.
The state also faces 4,000 claims from individual Hawaiians made against the Hawaiian Home Lands Department for dealings after statehood. These are on top of $600 million already awarded Hawaiian Homes with Cayetano's approval as restitution for past state failures. The settlement commission's recommendations could total another $200 million, Cayetano fears.
All of the above benefits are restricted to persons with 50 per cent or more Hawaiian blood, classed as Native Hawaiians. The Hawaiian Homes Commission estimates them at 60,000, including children under 18. The governor thinks it may be just 35,000 adults.
People with from 1 to 49 percent Hawaiian blood, perhaps as many as 160,000, would be lumped with Hawaii's other 900,000 or so residents in being obliged to pay the bill without getting any direct benefits.
The state already has deferred sales of three bond issues to finance public works while it assesses the situation. Unless Hawaii can reassure the bond market, we will have higher interest rates on our bond borrowing. This will add tens of millions to our amortization costs.
Our 1978 Constitutional Convention revisions established OHA to administer and manage Hawaiian affairs under a board of trustees elected by people with Hawaiian blood. They also say OHA should get a pro rata share of income from ceded lands formerly belonging to the monarchy.
The 1980 Legislature set this at 20 percent but that law was voided by the courts as too vague. The Legislature tried again with Act 304 of 1990, the one Circuit Judge Daniel Heely has just given judicial interpretation.
Under the act the state paid $130 million in back revenue and interest to OHA but got no waiver of further claims. The act also granted OHA 20 percent of future ceded land revenues.
THIS has brought OHA around $20 million a year and helped increase its assets to over $200 million - almost all of it required to be held for persons of 50 percent Hawaiian blood or more, even though people with only 1 percent can vote for OHA trustees.
The OHA share now is interpreted to come from gross ceded land revenues rather than from net revenues after expenses and to include income from all improvements on the lands such as Honolulu International Airport, Hilo Hospital and state housing projects.
OHA made no contribution to these vast improvement expenses, the governor notes. Judge Heely decreed OHA even must share in duty-free sales in Waikiki because they clear through the airport, which is on ceded land.
The state will appeal to the Supreme Court, but faces a moment of truth no matter what the high court decides. Cayetano tried this year to cut back OHA's revenues. He got support from the House leadership but not even a hearing in the Senate. Our legislators have not been distinguished for political courage but the 1997 Legislature can hardly duck.