Cuts likely as
tax hikes fail

Legislators' effort to
avoid higher taxes could force
more cuts in programs

Power line bills spark debate
Bills stalled on deadline

By Mike Yuen
Star-Bulletin

Legislators must cut Gov. Ben Cayetano's proposed $12 billion operating budget for the fiscal biennium or come up with ways to raise money, after rejecting automobile-related tax increases proposed by the governor.

State Tax Director Ray Kamikawa remained optimistic as lawmakers moved to meet yesterday's midnight deadline to advance legislation. "We still have a lot of time left in this legislative session to work matters out with both the House and the Senate," he said.

But House Finance Chairman Dwight Takamine (D, Hilo) cautioned the rejection reflects feelings among lawmakers that "there is not going to be any broad-based tax increases or revenue generators."

"Given the economic climate, given struggling families, tax increases may not be appropriate at this time," he said. "That could lead to cuts."

What might be on the chopping block will become clearer after his panel holds a public hearing Monday on Cayetano's budget proposal for the biennium that starts July 1, Takamine said.

Takamine added that he wants to avoid public worker layoffs, and it would be premature to say that retroactive pay raises for some government employees are in jeopardy.

Takamine and his counterparts on the Senate's money panel -- Senate Ways and Means Co-Chairmen Carol Fukunaga (D, Makiki) and Andrew Levin (D, Volcano) -- said they want to shield programs at the community and school levels from budget cuts.

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That means high school junior varsity and varsity sports programs would not be eliminated, although officials of the statewide public school system offered up the sports programs if the Department of Education had to be cut further.

"They're sure not our target," Levin said, referring to prep sports.

Fukunaga said shaping a balanced budget appears to be less daunting since the Senate is getting a better handle on the price tag for complying with the federal Felix consent decree, which requires health and educational services for disabled children. It appeared in January that the state would have to make an emergency appropriation of more than $100 million to be in compliance. Now it appears to be half that amount, Fukunaga said.

"If we can get our arms around Felix, then everything else is a lot more manageable," she said.

Officials of some departments, such as Human Services, have said their agencies already have been cut to the bone. And Cayetano has said he would rather see entire programs eliminated rather than have the Legislature impose across-the-board cuts.

Yesterday, Cayetano's three auto-related tax increase proposals that were to raise an estimated $119 million annually to fund economy-boosting initiatives were rejected by the Senate.

In the House, two of the tax bills are limping to a floor vote Tuesday, but not as Cayetano envisioned. Revenues from a proposed 1 percent value tax on cars would now go entirely to the counties -- and not be divided between the state's cash-strapped general fund and the counties, which are now getting less from the state's hotel room tax.

The Finance Committee also advanced to the House floor Cayetano's measure to raise the auto rental surcharge from $2 to $3 a day. But the panel rejected Cayetano's proposal that the revenues -- which would amount to $33 million annually with the increase -- go to the general fund. Instead, the money would remain dedicated to the special fund for highway projects, which is projected to be $70 million in the red in 2003.

Both chambers let yesterday's midnight deadline pass without even hearing Cayetano's proposal to impose the 4 percent general excise tax on sales of used cars between people who are not licensed dealers. Used-car sales by licensed dealers are already subject to the excise tax.

"Adding more taxes, adding more burdens to the taxpayers of this community is not the way to go," said Sen. Sam Slom (R, Kalama Valley), a member of the Senate Transportation and Intergovernmental Affairs Committee that buried Cayetano's proposals.

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Senate passes
bills to put high-voltage
lines underground

By Bruce Dunford
Associated Press

Two controversial bills approved by the state Senate last night would prohibit, for all practical purposes, the construction in Hawaii of any more aboveground high-voltage power transmission lines.

Lines carrying 64 kilovolts or more of power would instead have to be placed underground and insulated against electromagnetic field emissions.

Supporters say the measures are to protect the community from potential health risks associated with electromagnetic fields and to improve Hawaii's scenic views for tourists.

The bills, backed by the Democratic Party and environmentalists and opposed by the electric companies, sparked some floor debate before being approved.

One measure, approved on a 20-5 vote, would ban overhead lines in residential areas, within 300 feet of any school grounds or licensed child-care facility.

The other measure, approved on a 16-9 vote, would also ban them in "an area viewed by tourists, or an area important to the film industry."

"This is a ridiculous bill," said Sen. Norman Sakamoto (D, Monalua-Salt Lake) referring to the measure to ban lines in areas viewed by tourists. He said not enough is known about the cost.

Sen. Randy Iwase (D, Waipahu-Crestview-Mililani) said there is no area in Hawaii that isn't in the view of tourists.

"In short, this bill would prohibit the installation of overhead KV lines anywhere in the state of Hawaii walked upon or viewed by any tourist," said Iwase.

"Mind you, the cost of these KV lines won't be born by the tourists who are viewing these KV lines from any place in the state of Hawaii, but by the residents who live in these areas who need the electricity," he said.

Several neighbor island senators said placing the lines underground there would have a greater impact there because there are fewer customers to bear the higher cost through higher electric rates.

Burying two high-voltage transmission lines planned for Kauai could add $20 million to the cost and that cost would be born by only 29,000 residents, said Sen. Jonathan Chun (D, South Kauai-Niihau). On Oahu, he said, that higher cost would be spread out over a much greater population.

"We cannot afford that," he said.

Sen. Jan Yagi Buen (D, West Maui-Molokai-Lanai), an employee of Maui Electric Co., echoed Chun's concern and also said the studies into links between electromagnetic fields and health problems are inconclusive.

Senate President Norman Mizuguchi (D, Moanalua Valley-Aiea-Pearlridge) ruled Buen had no conflict in discussing or voting on the bill, despite her employment.

Sen. Colleen Hanabusa, D-Nanakuli-Waianae-Makaha, said the added costs to the electric companies in putting the lines underground would be spread over 30 years and would cause only minimal increases in rates.

While sympathizing with the neighbor island senators, "I ask you that you not make the same mistakes that we have made on Oahu," she said. "When you want to move forward and you want tourism, believe me, what they do not want to see is the mass of lines that we have in Pearl City and Aiea."

Sen. Sam Slom (R, Hawaii Kai-Aina Haina) said the decisions on putting the lines underground should be left with the Public Utilities Commission, not the Legislature. Otherwise, "we might as well abolish the PUC because we don't need any decision-making from them."

Slom and Iwase questioned a provision in the bill to apply the restriction retroactively to high voltage lines already approved by the PUC, but not yet completed.

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Bills stalled on deadline Here are a few major bills that have stalled as the House and Senate approach Thursday's deadline to swap measures: Pay raises: A bill to give an unspecified pay raise to Public Utilities commissioners, the legislative auditor, stadium manager and other state officials did not get a hearing in the Ways and Means Committee. Minimum wage: Bills that would have raised the state minimum wage by $1.25 to $6.50 per hour on Oct. 1, as well as set a future "livable wage" standard, were held in the House and Senate labor committees. Euthanasia: Despite backing from Gov. Ben Cayetano and his Blue Ribbon Panel on Living and Dying with Dignity, both the House and Senate heard but then held bills dealing with physician-assisted death and physician-assisted suicide. Domestic partnerships: Bills that give same-sex couples more financial rights were not heard in either chamber. Voluntary separation incentives: Bills to give public employers voluntary separation pay incentives or buy-outs to leave state government during downsizing were not heard in the Senate. The House Labor Committee held the measure. Medical use of marijuana: Measures that ensure severely and terminally ill patients are not penalized for obtaining and using marijuana strictly for medical purposes passed one committee in the House but not in the Senate. Gambling: There were no hearings held on any gambling bills. Measures to allow gambling at a theme park, shipboard gambling, and to hold a referendum on gambling have stalled. Charitable trusts: Bills that would limit the salaries of trustees of charitable trusts like the Bishop Estate and also would impose term limits on trustees did not advance out of the Senate Judiciary Committee. Election recount: Bills to provide a procedure to recount election results did not advance out of the House and Senate Judiciary Committees.