The governor said 'a very vocal
minority' in business is hampering the
Economic Revitalization Task Force

By Bruce Dunford
Associated Press

Gov. Ben Cayetano's suggestion that small-business leaders and Republicans are to blame for stalling implementation of his economic reform measures unleashed strong rebuttal from the targets of his remarks.

During a talk with reporters on Tuesday, Cayetano lamented that Republicans and small-business leaders were opposing the Economic Revitalization Task Force's tax package, which includes increasing the general excise tax while lowering income tax rates.

"This has been a historic opportunity for business to come out and get some of the reforms it has been seeking for so long," Cayetano said. "Unfortunately a very vocal minority in the business community has managed to confuse things so much I think there's a great deal of uncertainty."

"In the squabble over details and things like that, the big picture of moving forward and getting something done that is going to put more money into the pockets of our people is getting lost," he said.

Sen. Sam Slom, (R, Hawaii Kai) and the head of Small Business Hawaii, responded yesterday, "This is something we predicted last October would happen. We thought they would turn on the victims and blame the victims."

It's not an issue of Republicans versus Democrats because leaders of the Democratic Party have opposed hiking the GET, as have business owners who are Democrats, Slom said.

"The question is whether to take a common sense approach and cut the size of government or is it to protect the public service unions at all costs, asking everyone else -- the families, the counties, small businesses -- to downsize and make sacrifices in order to preserve the status quo," Slom said.

Rep. Quentin Kawananakoa, (R, Punchbowl) the House minority leader, said, "This is typical Democrat politics -- assess the blame on someone else instead of being man enough to step up and say, 'Hey look, we've been making mistakes in the past and we want to make some real changes.' "

Bette Tatum, state director of National Federation of Independent Businesses, said, "Small business was not against the whole thing, ever. The only thing our organization opposes is the general excise tax increase. We've supported all the other things."

Pressing forward with an increase in the GET as part of the reform package ignores the experts, Tatum said, noting this week's announcements by tax lawyers and accountants that they oppose such an increase.

"These are the experts in our state. The problem is that the task force didn't go to the experts in our state," Tatum said.

Raising the GET will drive more small businesses, which create the vast majority of jobs in Hawaii, either out of the state or out of existence, she said.

Cayetano said Tuesday, "It's unfortunate that this opportunity for business and even for the Republicans is slipping by them and it's up to the Democrats in the Legislature to come through with something for the people."