Wednesday, May 5, 1999

State of Hawaii

By George F. Lee, Star-Bulletin
The state House of Representatives closed the 1999
Legislative session last night with the traditional
singing of Hawaii Aloha.

The last regularly scheduled legislative session of the century ended the same way as others in recent years: with lawmakers unable or unwilling to act on issues that many of them had listed as priorities. They did cut pyramiding of the general excise tax and raise the pay of public workers and judges. But they did not take bold steps to jump-start the economy, reform civil service or impose a fireworks ban. Last November, Gov. Ben Cayetano said, "We have to get back into touch with what the people are really concerned about: education and the economy." But yesterday, defending lawmakers' performance, Senate President Norman Mizuguchi said, "I think the people have to realize government can only do so much."
Cayetano refuses
call for veto session

A flaw in an economic revitalization
measure led lawmakers to seek his veto

By Pat Omandam
and Craig Gima


Legislature '99 Athough legislative leaders asked the governor to veto a flawed economic revitalization measure, the governor said today he won't do it.

Senate President Norman Mizuguchi (D, Aiea) and House Speaker Calvin Say (D, Palolo) wanted Cayetano to veto the bill, which gives tax credits for hotel renovations, so they could convene a one-day regular session in July to save the measure.

By law, the Legislature can come back into session to discuss reasons why a bill was vetoed by the governor and possibly override the rejection.

Say said the problem in the renovation tax credit bill is that lawmakers must decide the percentage of the tax credit given and the threshold of what the dollar amount would be to qualify for the tax reduction -- which were not discussed in conference committees.

But Gov. Benjamin Cayetano said there's no need for a one-day session. "I'm not going to veto this bill," Cayetano said. "I cannot understand why they did what they did."

When he was asked to grade the legislative session, the governor said, "I'll leave it to the public to grade them." He said people "expected a sea of change, and what they did was the water rippled a little bit."

"You can't lead a revolution if there are people who don't believe there's a need for a revolution," he said.

As the Senate wrapped up its last day yesterday, an attempt to pass some sort of fireworks restriction fizzled in the Senate.

The Senate also did not reconsider its votes rejecting Attorney General Margery Bronster and Budget Director Earl Anzai, so their terms ended when the Legislature adjourned, and they cannot be reappointed to the posts.

Hitting singles

Mizuguchi said senators who voted no on Bronster will be able to justify their votes with constituents and will be able to point to several accomplishments this session, including high-technology tax credits and crime bills to increase penalties for child abuse and to help victims of domestic violence.

And senators revived and passed House versions of bills that phased out the pyramiding of the general excise tax and eliminated the tax on services local companies provide out of state.

"I think we would be classified as a do-nothing Legislature if we did not pass the de-pyramiding bill," Mizuguchi said.

"We promised the people, the business community, that we would provide for tax relief, and de-pyramiding was one and export service was another, so that was a major piece that we had to save."

Stanley Hong of the Chamber of Commerce said the tax bills were important first steps.

But because the effect is spread out over seven years, they won't immediately help the sluggish economy.

Likening the bills to baseball, Hong said the measures passed are like getting to first base -- but they're a long way from scoring a run.

"It's not going to be significant, but it's better than what we have now," he said. "This is the first time in 40 years they have actually affected the GET."

Mizuguchi said lawmakers did not hit any home runs this session.

"We're hitting singles, and people may not be happy or satisfied with singles, but I think the people have to realize government can only do so much," he said.

Public workers get raises

The Legislature yesterday passed a $12 billion, two-year budget that includes promised retroactive raises for Hawaii Government Employees Association and United Public Workers members. The budget represents "the best of what the House and the Senate have to offer," said House Finance Chairman Dwight Takamine (D, Hilo).

Takamine said the budget is focused on improving public education.

As part of the effort, it funds 167 positions for special-education teachers, $1.5 million for the Hawaii Content and Performance Standards and $168 million in construction projects at the Department of Education.

Also, it appropriates $159 million next year and $172 million the year after to help educate Hawaii special-needs children under the Felix consent decree.

Do-something Legislature

Takamine bristled at comments by House Republicans that the state budget is status quo in a do-nothing Legislature.

"Nothing is farther from the truth," he said.

He said lawmakers this year had to restructure the budget after the Legislature last year passed a $759 million personal income tax cut.

'Robbing Peter to pay Peter'

The House ended the 1999 session at 9:35 p.m. yesterday, about five hours after the Senate completed its final day of work on this session.

Among the issues debated at length in the House was a bill that decreases state payments to the Employees' Retirement System by $198 million next year so the state can help the counties fund pay raises for civil servants.

The 12-member House Minority unanimously voted against the plan, saying they are not willing to sacrifice benefits of state retirees to pay the wages of current workers.

"I believe this bill is a last-minute diversion that reflects the lack of respect on the state retirement fund," said House Minority Leader Barbara Marumoto (R, Waialae Iki).

Although the ERS fund has a balance of more than $9 billion and the stock market is going strong, Republicans accused House Democrats of making what amounts to a "midnight raid" on the fund to balance the budget.

"This is really a new twist to robbing Peter to pay Paul," said Rep. Jim Rath (R, Kailua-Kona). "This is robbing Peter to pay Peter."

Takamine and others countered that the plan is fiscally responsible and will not harm the ERS fund, which will be self-sustaining in the year 2007. Rep. Kenny Goodenow (D, Waimanalo) said no retiree is going to lose any benefits because they are guaranteed by the state.

"We're not talking about a big crisis here," Goodenow said. "The real intention here is to help the counties."

Tough choices next year

Even so, a few in the House majority warned that lawmakers will have to make tough decisions next year. State Rep. Joseph Souki (D, Wailuku) reiterated his concern that cutting taxes without balancing it through budget cuts or tax increases means something has to give.

And by not making payments to the ERS, Souki said lawmakers have delayed the time needed to make the retirement fund self-sufficient.

"The decision only defers the hard decisions we need to make in the future," Souki said.

Haste again leads to error

Meanwhile, both chambers passed a bill that increases the pay of state judges by 11 percent a year for the next two years.

House Judiciary Chairman Paul Oshiro (D, Ewa Beach) said this is the first pay raise for judges in nine years and is needed to attract and retain those on the judicial bench.

But the bill housing the judicial salaries -- like the measure on the hotel renovation tax credits -- contained mistakes due to Friday's frenzy to ready the bill. Oshiro said the pay raises were mistakenly calculated at 27 percent over the next two years rather than at 22 percent.

Oshiro said lawmakers will stick to the intent of the measure and fund an 11 percent-per-year pay raise and will correct the problem in the 2000 Legislature.

'I feel proud'

That prompted Souki to vote with reservations on the plan, saying the Legislature is better off extending the session to fix these problematic bills.

Quality should be the top priority, he said.

"If it's a question between ending the session on time or coming out with a quality product, I would say choose the quality product," Souki said.

Say praised his colleagues for working as a team and creating an open atmosphere that nurtures younger members of the House. He disagreed that this was a do-nothing session.

"I feel proud of what we accomplished," Say said.

In his closing message to senators, Mizuguchi promised to work on education and civil service reform for next year's session.

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