Sunday, November 10, 2002

With the election of Linda Lingle and Duke Aiona, businesses face lobbying a Republican executive branch -- something many local lobbyists have never done.

Lobbyists look
at a new world

For the first time in decades,
they must deal with split power

Gov's power is more than vetoes

By Tim Ruel

With a Republican in the governor's seat and Democrats still in control of the Legislature, lobbyists face a whole new ball game at the Capitol next year.

Several business lobbyists stressed their alliances with the new administration, which is widely viewed to be more pro-business than the Cayetano administration. When lobbyists go to legislative hearings, it would be a boon to be singing the same tune as the state's own administrators, they reasoned.

"If the message doesn't get across, that's our fault," said Carol Pregill, executive director of the Retail Merchants of Hawaii trade association.

As a Republican, Lingle is more free to use her office as a bully pulpit and take a stand than previous Democratic administrations, observers said.

But several lobbyists cautioned against expecting too much progress from the 2003 Legislative session. On a practical level, Lingle has little time to cement her immediate agenda. "Some real picking and choosing has to go on as to what's possible to accomplish," said Dan Davidson, executive director of the pro-development Land Use Research Foundation.

On a more political level, players on all sides -- Democrats, Republicans, businesses, and environmental and consumer groups -- will be feeling out a new power structure, said Tim Lyons, executive vice president of the Hawaii Business League.

"I think it's going to be a learning curve for everybody in terms of what can fly and what can't," Lyons said. "I think that perhaps the optimism you're getting is a result of the fact that businesspeople wanted to see this kind of outcome and didn't think they were going to get it. I still think the proof is going to be in the pudding."

Dick Botti, a lobbyist whose clients include associations of liquor dealers, doctors and the food industry, said he plans to stick with positions that are pro-business as well as pro-consumer.

"It's going to be a new experience," Botti said. "The major difference will be we will have a total change in agencies, department heads and basically they're the lobbyists for the governor. So when I will go down and testify on a bill that relates to Department of Health I'll either be with them, against them or compromised with them.

"If what we're asking for is reasonable, I expect the administration will have an ear that will be far more open than it was."

Botti had butted heads with the Cayetano administration over the amount of medical fees that doctors receive for workers' compensation cases. The administration argued raising the fees leads to higher workers' compensation insurance rates, which hurts a broad spectrum of businesses.


Davidson said he is excited about his foundation's long-term prospects under the Lingle administration.

"I think that certain principles of our organization, particularly a reduction in unneeded regulations and also the promotion of county home rule, fit tremendously with the governor-elect Lingle's stated position on these issues," said Davidson.

The key will be how comfortable Democrats are with the land-use foundation's agenda, Davidson said. It's hard to speculate on what will happen in the first year, he added.

"This is going to be a long-term effort to try to create a more business-friendly regulatory environment. It's not going to happen overnight."

In recent years, cutting regulations has been hard at the Legislature. "We were concerned last session, frankly, that there seemed to be an increased propensity to pass what we viewed as adverse land-use and environmental regulation," Davidson said. For example, the House had backed agriculture bills that were more regulatory in nature, as opposed to promoting agriculture, he said.


As it did in this year's Legislative session, Retail Merchants of Hawaii will seek a tax credit for construction and renovation of commercial buildings, as well as funds to improve Hawaii's cruise ship ports, both of which will help retailers, Pregill said.

"I think before there was more reluctance. (Legislators were) very cautious spending money," Pregill said. "I think we have to look at how we spend in the state ... but business is what brings revenue into the state."

It remains to be seen how much help retailers will get from the administration. Lingle has sided with more targeted tax credits for high-wage industries such as technology. "Creating a job at a convenience store is fine ... but that's not the government's focus," Lingle said in a recent interview.

Pregill said the problem with tax credits for one particular industry is that other industries and taxpayers have to shoulder the burden. "I think we need to make our case to (Lingle)," Pregill said. Waikiki is badly in need of a new look, and retailers are facing tough times, she said.


As before, lobbyists for legalized gambling in Hawaii will make their pitch at the Legislature next year, focusing on Hawaii's need for jobs and new sources of government revenue. "It's obvious we need to do something," said Jim Boersema, who this year represented a developer seeking to build a resort and casino in West Oahu.

"I think we have to talk to Gov. Lingle ... and point out there are positive aspects and they're greater than the negative aspects, and hope that she has an open mind," Boersema said.

Lingle has previously spoken out against all forms of gambling.

"I think we'll continue to present the case for limited gambling. Let's try it out and see what happens," Boersema said. "Any revenue-generating issue should be discussed by the Legislature."


Lyons, of the Hawaii Business League, said he expects to see more progress in the Legislature in the 2004 session than next year, since nearly half the Senate and all of the House will be up for re-election in 2004. "There will likely be a coming together," he said.

The amount of fighting between Lingle and Democrats will depend on the individual issue, observers said. Lingle plans to suspend a law passed by this year's Legislature that would regulate Hawaii's high gas prices, giving lawmakers a chance to press the matter next year.

The gas price cap, touted by the Democratic Party in the election, does not take effect until 2004.

On most issues, Democrats will want to work with Lingle, some lobbyists said.

"I think that will be political suicide if the Legislature gridlocks and ignores whatever the governor brings out," said Bette Tatum, state director of the National Federation of Independent Business.

Lingle, meanwhile, will have more leeway than the Cayetano administration to oppose the Democrat-controlled Legislature, said Lowell Kalapa, president of the Tax Foundation of Hawaii. Quite simply, it'll be expected of her, Kalapa said.

Said Tatum: "I do think that everybody elected ... wants to do what's right for the state and if they want to do what's right for the state, then they have to put aside any petty politics."


Governor’s power
is more than vetoes

By Tim Ruel

Hawaii's governors, though checked by the Legislature and Judiciary, wield some powerful tools.

While it's up to lawmakers to introduce and pass laws, as governor, Linda Lingle can trim the state budget by wielding a line-item veto. Legislators can override vetoes, but they have rarely done so.

Most recently, outgoing Gov. Ben Cayetano used a line-item veto to slice $5 million from the $61 million 2003 budget of the state Hawaii Tourism Authority.

The governor's veto is arguably more powerful than the ability to appoint people to the hundreds of boards and commissions that make up the state government, said Lowell Kalapa, president of the Tax Foundation of Hawaii.

Lingle also has the ability to refuse to raid special funds, such as the $200 million hurricane relief fund, as a means of balancing the state budget.

And then there is the leadership power of the office, some said.

"I think one of the things she can do is change the mood," said Bette Tatum, state director of National Federation of Independent Business. "Look at your own family when you have optimistic high-hope people in your family. Isn't it happier? Linda to me is a symbol of hope for our state. I think, when the small business owners see hope, that it's going to make a big difference."

But is hope enough for businesses, hurting from a decade of economic stagnation? "It's a start," said Tatum. "It's something we haven't had. So hope is a start but we want to see action too."

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