Thursday, March 25, 1999

Hawaii State Seal

civil service idea
still alive

The House Labor Committee
is set to approve a bill that would
kill civil service June 30, 2000

Bullet Bill would limit bounced-check fee
Bullet Two senators use 'education' to urge tax hike

By Craig Gima


The governor's "drop dead" provision to end civil service laws next year has new life in the state Legislature.

The proposal to do away with the laws that govern hiring, firing and other aspects of government work is supposed to be an incentive to bring public worker unions to the table to begin reforming outdated work rules for state and county employees.

The House Labor Committee, which earlier was against the "drop dead" provision, was expected to pass out a bill (Senate Bill 1046, SD3) today that will include Senate language to eliminate civil service on June 30, 2000.

House Labor Chairwoman Terry Yoshinaga (D, Moiliili) said she changed her mind after discussions with her committee and in caucus with other Democrats.

"After we passed out our measure, there were some concerns that it was not specific, but I think that at this point to be specific, the Senate draft has a number of issues that should be considered," she said.

Yoshinaga had not decided yesterday whether collective-bargaining laws should also be reviewed.

But Mike McCartney, state Human Resources Development director, said whether or not it is in the bill, changes in collective bargaining will be discussed.

"You cannot have a discussion about civil service modernization without talking about collective bargaining and looking at the overlap," he said.

The House proposal was expected to set up a task force to work on reviewing civil service and other laws and report back to the Legislature next year to pass laws to replace civil service.

The Senate would have McCartney work with unions, counties and others to work on proposals for next year's Legislature.

McCartney said he is "uncomfortable" with the idea of a task force.

"We don't have a very good track record with task forces," he said, noting that other task forces have failed to bring about changes.

The effort to reform civil service was a centerpiece of the governor's State-of-the-State speech at the beginning of the session.

Initially, the proposal got a cool reception in the legislature. Public worker unions are opposed to the bill.

But McCartney said he is now "pleased with the progress" of the bill.

Two senators use
‘education’ to
urge tax hike

By Mike Yuen


The Democratic-controlled Senate, which last year derailed Gov. Ben Cayetano's and the House's efforts to raise the state's general excise tax by 34 percent, is now allowing two of its members to pitch a similar proposal.

Under what Sens. Brian Taniguchi (D, Manoa) and Sen. Bob Nakata (D, Kaneohe) envision, the 4 percent excise tax would climb to 5.35 percent, to provide more funds for education.

The tax increase, said Taniguchi, would spare the public schools and the University of Hawaii from budget cuts, which are looming.

Since the Council on Revenues has lowered its revenue forecast for the state, the Senate must cut at least $45 million more from the two-year, $12 billion operating budget that the House has proposed.

"Education can help in the long term for economic development," Taniguchi said yesterday.

The proposal also includes provisions for eliminating the excise tax on store-bought food and for reducing the "pyramiding," or the continuous imposition of the excise tax at every stage of production, distribution and sale, to 0.5 percent after seven years.

The tax increase, however, would begin much sooner -- on Jan. 1, 2000.

Taniguchi and Nakata say that not only would education benefit under their plan, but also the poor and the elderly and small businesses, which have long complained about the excise tax's pyramiding effect.

In the end, after the revenue loss due to the drastic reduction of pyramiding and the exemption of groceries from the tax, an additional $150 million would be left for lower and higher education.

Still, Taniguchi conceded that the proposal, which will be the subject of a public hearing Saturday, doesn't have overwhelming support among his Senate colleagues.

And even if the proposal advances to the House, it would likely be greeted unenthusiastically, said House Speaker Calvin Say (D, Palolo).

"I don't think most members of the (majority) caucus will be in favor of this, particularly since it is coming so late in the game," Say said, noting that the Legislature is scheduled to complete its work in six weeks.

Senate Education Chairman David Ige (D, Newtown), who learned of the proposal from the Star-Bulletin, expressed doubts about the measure.

"We've got to downsize before we spend. I just have a problem with expanding government," he said.

Sen. Sam Slom (R, Kalama Valley) branded the proposal "a scam on the public."

He added: "You don't jump-start the economy or improve education by burdening the taxpayers of this state further. I thought we learned that lesson last year."

Last year, Gov. Cayetano and the House pushed for raising the excise tax from 4 percent to 5.35 percent as a way to pay for tax cuts proposed by the Cayetano's blue-ribbon economic revitalization task force.

But most of the key elements of the task force plan failed to win legislative support, and it was only at the last-minute that Cayetano was able to salvage nearly $750 million in cuts to personal income taxes that are being spread out over four years.

Senate President Norman Mizuguchi (D, Aiea) said the surfacing of the Taniguchi-Nakata initiative doesn't signal a Senate reversal on increasing the excise tax. Rather, it is a reflection of the chamber's partnering and collaborative style of operation.

"My role is, 'OK. We'll hear it. We're not going to shut you down,'" Mizuguchi said.

Senate Ways and Means Co-Chairman Andrew Levin (D, Volcano) said Taniguchi and Nakata cited polls which showed the public saying it is willing to pay more if the money goes to education.

But, he added, "If the public doesn't come out or if the public comes out in a negative way, then I would not expect the issue to go any further," Levin said. 

Noting that she has yet to see the proposal, Bette Tatum, state director of the National Federation of Independent Business, said: "If it is just a general excise tax increase, then my reaction is, "No! No! No!' We showed last year that's a killer for small business and we won."

Told that the proposed tax increase would go into effect in a little more than nine months, when the next year starts, while the reduction in the tax's pyramiding would take seven years, Tatum said: "We can't wait for a seven-year phase-in."

Have your say

The Senate Ways and Means Committee will take public comment on a proposal to raise the general excise tax from 4 percent to 5.35 percent:

Bullet When: 3:30 p.m. Saturday

Bullet Where: Conference Room 211 at the state Capitol

Bill would limit
bounced-check fee

Retailers would be able to charge up to a $20 fee for bounced checks but would not have to put up signs warning consumers of the charge under a bill that passed the Senate Consumer Protection Committee.

There is no limit on returned check fees in current law, but the Retail Merchants of Hawaii told senators yesterday that fees normally range from $15 to $35.

Retailers and collection agencies support the bill, but the state Department of Commerce and Consumer Affairs opposes it because of the lack of notice.

Jo Ann Uchida, executive director of the office of consumer protection, said most retailers already provide signs that warn of the bad check fee."The notice will serve both the retailer and the consumer."

But retail merchants argued that there is no need for the signs because the law will set a limit on charges. They also argued that the cost of signs, especially for large retailers, could be expensive.

The bill now moves to the Senate Judiciary Committee.

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