Editorials
Saturday, April 28, 2001
Legislators
take their time to
decide fate of
Hurricane Fund
The issue: The state Legislature has
decided to preserve the Hawaii Hurricane
Relief Fund but is undecided on how
to use the interest it generates.
NO HURRICANE has attacked Hawaii since Iniki devastated Kauai and parts of Oahu eight years ago, which means that a sizable fund created by the state as hurricane insurance for homeowners remains intact. Resisting temptation and Governor Cayetano's desires, state legislators seem to have decided not to touch it, or at least its principal, for now. They understand how important it could become after the next hurricane -- which is a virtual certainty.This issue is not one of great urgency; the money is not going anywhere. The Legislature should consider inviting other proposals and decide in next year's session whether to earmark the interest for specific purposes or return it to the homeowners.
Most private insurance companies stopped offering hurricane coverage in Hawaii in the aftermath of Iniki, which caused $1.3 billion in damages in 1993. In recent years, the insurance companies began offering hurricane coverage again and the state fund was phased out because it was perceived to be unnecessary. The Hawaii Hurricane Relief Fund stopped issuing policies on Nov. 30, and the fund was turned over to the state, in accordance with the law that created it.
Cayetano at first proposed returning the fund, which now totals $195 million, to the homeowners. That would have created the possibility of insurance companies and the state having to go through the same agonizing exercise after the next hurricane. He later suggested using the interest from the hurricane fund and from the state's Rainy Day Fund, which totals $40 million, to provide full-tuition scholarships to high school graduates with "B" grade averages. That proposal appears to have been rejected by legislators.
Interest from the fund could be used for other purposes. A House proposal would use it to help consumers buy safety equipment such as hurricane clips for houses. However, that raises the question about whether owners of new or renovated homes that were required after Iniki to be equipped with such devices should be similarly compensated. That would be fair, but the interest might end up paying only for the bureaucracy needed to figure it out.
Sen. Brian Taniguchi, chairman of the Senate Ways and Means Committee, says the Senate wants to revert most of the interest to the general fund to be spent on Civil Defense and other hurricane-related services. If it would merely replace moneys that then could be used elsewhere, that could amount to the kind of shell game too often seen in government.
Published by Oahu Publications Inc., a subsidiary of Black Press.Don Kendall, President
John Flanagan, publisher and editor in chief 529-4748; jflanagan@starbulletin.com
Frank Bridgewater, managing editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, assistant managing editor 529-4768; mrovner@starbulletin.com
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