Editorials
Friday, December 11, 1998

Property tax increase
needed for shortfall

A lot of hand-wringing is going on at Honolulu Hale over a prospective $130 million budget shortfall and the need to find more revenue. Particularly abhorrent to some City Council members is the idea of raising property taxes, one of the main options the city is considering.

No politician likes to raise taxes, of course, but a little realism is in order. Hawaii's economic slump has caused property values to fall. Because the property tax is based on assessed valuation, tax collections have consequently fallen as well -- from $433 million in 1994 to a projected $366 million next year. What this means, of course, is that Oahu property owners have been paying less in taxes.

Adding to the city's problems was the Legislature's decision to reduce the counties' share of the hotel room tax in order to beef up funding for tourism promotion -- over the protests of the mayors, who were left to find ways to make up for the loss.

Faced with the budget shortfall, the city can't afford to continue to give the property owners a break by maintaining the same tax rates. It desperately needs more revenue. In all probability, the city will be forced to raise property tax rates, but this will only mean that owners will no longer be paying less than in the past. The higher rates might restore the property tax collections to their 1994 levels. Owners would go back to paying what they formerly paid.

This will be a hardship for some owners but an increase appears to be inevitable to maintain essential services. It may also be necessary to raise some charges such as bus fares, golf fees and vehicle registration fees.

On the expenditure side, purchases of new equipment may be deferred and staff reduced through attrition. Raises for city workers may not be funded. Mayor Harris says the city already has done about all it can to economize. City departments, he says, have been stretched "absolutely to the bone."

Harris has appointed a citizens advisory committee on the budget, which is charged with making recommendations on dealing with the shortfall. But there are no easy, magical solutions. Whatever the committee comes up with will be a combination of revenue-raising and cost-cutting measures. One project that is too important to be shelved: restoring the Waikiki Natatorium.

The bottom line is that city taxes and fees will have to go up.

Child support

HAWAII has made impressive progress over the past decade in enforcing court-ordered child-support payments. Stronger laws have been helpful in extracting payments from "deadbeat" parents, but the task of assuring compliance with such court orders remains formidable. Now an extra effort is needed for Hawaii's agency to overcome problems with a new computer system and an upcoming move to offices at Kapolei.

Much of the state Child Support Enforcement Agency's progress can be attributed to use of computers. By 1995, every staffer had a computer, although a more sophisticated system required by Congress did not come online until five months ago. During one two-year period, the agency achieved a 400 percent increase in income withheld from paychecks for child support.

Still, problems persist, leading to frustration among the agency's clients. The Star-Bulletin's Craig Gima reported this week that the transition to the new Keiki computer system has resulted in delays and missing checks. Michael Meaney, the agency's administrator, acknowledges that the general confusion of the move from leased space in central Honolulu to state offices in Kapolei in mid-January probably will create more problems with lost or misplaced files.

A sophisticated computer system is important partly because of federal welfare legislation two years ago establishing a tracking system that successfully located a million delinquent parents. That resulted in a nationwide collection rate up 62 percent from 1992. A new federal law makes it a felony to cross state lines to avoid child-support obligations.

The Hawaii agency's problems need to be viewed in context. While the agency lags behind most other states in staff-caseload ratio, it has been able to collect a greater amount of child support due -- 24 percent -- than the national average of 22.4 percent. As the agency gets settled in its new offices and adjusts to the computer system, its efficiency should further improve.

Candidates’ rights

THE First Amendment prohibits the government from abridging the rights of free speech and free press. A ruling by a state commission appears to be in conflict with that prohibition. The state Campaign Spending Commission has censured Melodie Aduja, an unsuccessful candidate for the City Council in the last election, for violating the state fair campaign practices code. The commission acted on a complaint by Aduja's opponent, Councilman Steve Holmes.

The complaint involved paid messages in the Sun Press that blamed Holmes for the poor condition of projects in Holmes' Windward Oahu district. Holmes said he was not responsible for the condition of the projects and called the advertisements misleading and false. The commission ruled in Holmes' favor.

The law requires the commission to formulate a fair practices code and censure candidates who violate it. But government should not be involved in attempting to determine the truth or falsity of statements made by political candidates.

If candidates claim they have been libeled, they can go to court to seek damages. Any statement by a candidate that is neither libelous nor obscene is protected by the Constitution.

The Legislature should amend the law to make it clear that the Campaign Spending Commission should not deal with complaints with First Amendment implications.

---

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor