Friday, March 26, 2004


Legislators lack pluck
to begin gas caps


The state House has given preliminary approval to a one-year delay of price caps on gasoline.

OBVIOUSLY nervous about the reverberations from capping gasoline prices, state legislators are headed toward delaying the effect of the law that set the effective date for this July. The one-year delay could have the effect of aiming a gun at the oil companies -- a gun with the safety on. The lawmakers' excuse that further study is needed is specious.

The proposal to put a lid on gasoline prices arose from information gathered by attorneys who handled the state's price-fixing lawsuit against six major oil companies, resulting in the companies' $35 million payment to the state to settle the case. The lawsuit uncovered documents showing that oil companies have made obscene profits in Hawaii, due to what one oil company attorney described as an "oligopoly."

Then-Gov. Ben Cayetano supported the 2002 legislation, which contained the delayed start-up as a compromise. Cayetano pointed out that opponents of the gas caps "feel another year will give them some time to make some changes to the political scenery and get the bill eventually repealed, but I don't think they will be successful."

The Cayetano administration also commissioned Stillwater Associates, a California petroleum consulting company, to study the possible effect of gas caps. Stillwater reported last August that gasoline caps had failed wherever they had been tried, and predicted that they would distort the market in Hawaii. The consultant noted, however, that Hawaii's high gas prices are "indicative of the use of market power in an oligopoly."

The San Francisco lawyers who represented the state in the price-fixing lawsuit responded in January that the Stillwater outlook was "a report by former industry insiders that provides a largely industry viewpoint." The Stillwater report and the lawyers' response provided legislators with a full and balanced picture.

The state Senate has approved amendments that would improve the law by pegging the caps to the national average instead of West Coast prices, cap only wholesale prices instead of both wholesale and retail and apply the caps to all grades of gasoline, not just regular unleaded. Preliminary approval by the House this week to delay the beginning of price caps is a sign of cold feet, not a desire for more time to study the issue.


Honolulu Hale needs
to be a safe workplace


The City Council wants an increase of $2.6 million for its expenses.

Political sensitivity makes the City Council disinclined to increase its budget, especially since five of nine members are up for re-election come November. Taxpayers' perception that the Council is fattening its coffers while potholes abound and sewers leak because of the city's tight finances also fuel the reluctance.

The Council ought to trim expenses where possible, but some items in the budget proposal look worth keeping, particularly those that deal with health and safety. Others appear simply necessary, such as funding for the upcoming elections at a cost of $1.17 million, which makes up the bulk of the increase.

While the administration has proposed $9.4 million for the Council, Chairman Donovan Dela Cruz wants $2.6 million more.

Charles Djou, the Council's self-appointed fiscal watchdog, objected, saying members "should be holding the line on spending." He challenged the elections appropriation, noting that the city clerk's budget, which oversees the balloting, has already been augmented. If the elections can be conducted with less money, the amount should be reduced. However, Djou needs to do some homework and come up with the numbers to back his contention.

One project that should move forward is the refurbishing of work areas for Council staff and complying with the Americans with Disabilities Act. The $50,000 pegged for reconfiguring some offices in Honolulu Hale should be used to bring them up to standards since they are unsafe. Some areas are accessible solely through narrow stairways. Should there be a fire or other emergency, getting out quickly would be difficult.

The Council members, mindful of possible wage increases for public employees, want about $330,000 earmarked to pay their staff members. Unlike the administration, which has not included money for such raises in its budget, the Council is being reasonable in planning for them.

An $815,000 appropriation to organize a conference next year of the National Association of Counties also drew Djou's protest and should be carefully reviewed. The conference is expected to draw as many as 8,000 county officials and their families and bring prestige to Honolulu and tax revenues from participants' spending. Unfortunately, that money will go to the state general fund, not to the city's treasury. The Council should seek a grant from the state to subsidize the convention.



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