First Sunday
BY MARK COLEMAN
Bette Tatum:
The Lingle endorsement
Taking care
of businessHave a conversation with Bette Tatum and you'll understand why she has been one of Hawaii's most effective business lobbyists for more than 20 years. Brimming with friendliness and charm, she is well-known and well-liked by legislators at the Capitol, where she has long lobbied for a better business environment on behalf of Hawaii's approximately 5,000 members of the National Federation of Independent Business.
Moreover, with the recent election of Republican Linda Lingle as governor, it appears her years of hard work may have finally helped achieve a breakthrough, since Lingle campaigned on a reform platform. Tatum, a self-described strong fiscal conservative, said she shuns party labels, though she did run as a Democrat for the state House in 1980, in the Aiea-Pearl City district. She placed third in a crowded primary, but it was still a win for her, since her campaign caught the eye of the NFIB and she became its Hawaii state director in 1981.
Originally from Iowa, Tatum moved to Hawaii in 1965 with her husband, Lon, then serving in the U.S. Air Force, and their two sons. She initially taught business courses at Hickam Air Force Base before going into business for herself.
She also is a former neighborhood board chairwoman, state tax review commissioner, KITV-4 show host and producer, and member of numerous state committees. She said she learned the value of a good business climate and keeping the faith from her mother, a Methodist lay minister who owned a small business.
As president of Tatum Enterprises, her major client is NFIB. She also lobbies for the Hawaii Society of CPAs and several mainland clients. Making a point about Hawaii's difficult business climate, Tatum noted she is the only NFIB state director in the nation who has to pay a general excise tax on her NFIB fees.
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Reaction to the election
Mark Coleman: I wanted to talk to you because of the recent "regime change" in Hawaii that so many in the business community seem to be applauding, including you. You said something like ...Bette Tatum: I think I used the word "ecstatic." (Laughter)
MC: Ecstatic, that's right. You said you thought you'd never see the day. And, of course, soon after Linda Lingle got elected governor, she proclaimed that Hawaii now is "open for business."
BT: "Open for business." I love it.
MC: Is that really true, though, just yet anyway?
BT: It's early. But what I see and what I hear (from small-business owners) is the difference in their attitude. They think there's hope. And when you're running a business and you think there's hope out there, you're not going to throw in the towel. That is the biggest change I've seen so far.
Defining the problem
MC: Exactly what is so bad about the economy here?
RICHARD WALKER / RWALKER@STARBULLETIN.COM
"I don't know anybody who works longer hours, gets paid less, than the small-business owner -- that is, the working person, man and woman." Bette Tatum, Hawaii state director of the National Federation of Independent Business.
BT: Taxes. I mean, the last administration can say they had the biggest tax cut in history, but that was the only one they ever had.
MC: What else?
BT: We're the only state in the nation that has a general excise tax. Tourists coming here say, "Gee, that's a low sales tax," but that's not a sales tax. It's a tax that pyramids at every level. For years, tax experts have said that Hawaii's 4 percent general excise tax really pyramids to between 12 and 16 percent. If you were to put a sales tax out there at 12 to 16 percent, the people in this state would be marching! This, to me, is a way to hide the taxes.
MC: What about other taxes?
BT: Reducing or eliminating the corporate tax would send a message to the world that Hawaii cares about business. I'm told the corporate tax doesn't bring in that much money anyway.
MC: What else is bad about Hawaii's economy?
BT: Regulation overkill. In 1995, there was a White House Conference on Small Business. Each state delegation was to bring up what it felt was one of the worst things in trying to do business, and our 16-member delegation chose regulations. We talked about the issue at the conference and the 2,000 or so delegates at the national conference voted that a top priority. After we came back, we organized the Hawaii Congress on Small Business. To make a long story short, we worked very hard for several years with the Legislature to get what we call the Hawaii Small Business Regulatory Flexibility Act, the first in the nation, I believe, modeled after the federal law.
MC: What does it provide for?
BT: It gives small business a big voice in what rules are coming out. It has a review board, made up of small-business people statewide, who get to look at all the proposed rules and regulations that will affect small business.
MC: When you talk about regulations, like what?
BT: Probably the most onerous, and the ones we get the most complaints about, have to do with the Department of Labor -- the Occupational Safety and Health Division, in particular. Small businesses want their people to be safe, there's no question about that. But when they violate a rule -- often inadvertently -- they need to be able to fix the violation without being hit with huge fines.
MC: Overly zealous enforcement?
BT: Yes. I've said to regulators for years: Be a facilitator, not a penalizer. You are there to help the economy, to help businesses succeed, not drive them away, because when they succeed, revenues come in! Then the state can carry out the programs it wants. But our state seems to do things backwards. We get all these programs, but then they continue to make it tough to do business. It makes no sense.
MC: What else is wrong?
BT: Skyrocketing health-care costs, ever-increasing government mandates, rising workers' compensation costs, tort reform. For example, did you know a business that is only a small percentage at fault may end up having to pay 100 percent of the damages if others named in the lawsuit cannot pay their share? But the state exempted itself from what it calls joint and several liability, and I didn't think that was fair. Then a couple of years ago it exempted a few industries, but to be fair, all businesses should be exempt.
Previous regimes
MC: Did Governor Cayetano ever do anything to help improve the business climate?BT: The latest national rankings show Hawaii still has a reputation of being hostile toward business. That hasn't changed. But on the positive side, when I heard through the grapevine that the governor might veto the bill making permanent our nationally acclaimed Small Business Regulatory Flexibility Act (due to sunset in June 2002), I met with him personally to discuss the issue. I asked him to please sign the bill, and he did. So that is something that we can be proud of in our state, although what passed does need some fine-tuning since it was modified from what we initially wanted.
MC: What about Gov. George Ariyoshi?
BT: Ariyoshi really was a fiscal conservative. Not everybody liked everything he did. But he kept his hand on the money, and he didn't let the state go phfffiittt. Then John Waihee came in. John was as charming as he could be. I mean, you can't help but like him personally. But you know, when a small state increases its employees from around 47,000 to about 64,000, that's a real cause for concern.
MC: Didn't he have a budget surplus that disappeared?
BT: Oh, it was huge. I forget the exact figures, but it was huge. And then it was just gone by the time Cayetano came in. It was very sad.
MC: I thought Cayetano did a fairly decent job of trying to reduce the size of the state government.
BT: He tried, but he had the misfortune of governing during one of the roughest financial periods in state history. Ben and his wife, Vicky, were guests on my TV show shortly after they were married and we discussed a lot of the things we're talking about here. He opposed taxes for a train and he supported privatization. So I give Ben credit in many ways. He tried, but the Legislature knocked him down.
Privatization's prospects
MC: What are the prospects for privatization in Hawaii?BT: Act 90 passed last year, so the mayors and the governor can privatize things. It's up to them now. That's another reason I wanted Linda in there: She's a strong proponent of privatization or contracting out.
MC: What should be privatized?
BT: A lot of things should be considered: park maintenance, garbage collection, prison building and operations. Of course, there are things that shouldn't be privatized, too.
MC: I'm intrigued that some private-sector unions supported you on that. Why is that?
BT: I can't speak for them, but it's probably because they want the state to prosper and see jobs grow, as we all do. I think the public-sector unions oppose privatization because they're afraid of losing their jobs, and that's understandable. But that's not the way it works. The workers could still have jobs, just different bosses.
NFIB's purpose
MC: What is the purpose of the National Federation of Independent Business?BT: To fight for small and independent businesses at the Legislature and in Congress, to get rid of proposals that would hurt small business and get bills passed that would help.
MC: When some people hear you're in favor of a pro-business climate, they think therefore that you are against the working man.
BT: I am so glad you brought that up. I am so tired of hearing those words: the working man. There isn't a person in this state who works harder than a small-business owner, yet I hear this in testimony time after time, from everybody representing whom they think is "the working man." There are no employees without employers. And I don't know anybody who works longer hours, gets paid less, than the small-business owner -- that is, the working person, man and woman.
MC: To what extent do you consult with allies or form coalitions?
BT: Sam Slom (of Small Business Hawaii and a Republican state senator) and I are good friends. We work very well together. The same goes for Tim Lyons (of the Hawaii Business League). For a lot of years, especially during the '80s, Tim, Sam, the late Tookie Evans (of the Chamber of Commerce of Hawaii) and I lunched weekly during the legislative sessions to coordinate our efforts.
MC: So you're not a shill for the Republicans or anything?
BT: Heavens, no. And everybody knows that.
MC: So you work with Democrats?
BT: Absolutely. NFIB is nonpartisan.
MC: What have been NFIB's greatest achievements while you've been with it?
BT: One of the greatest achievements is to keep the general excise tax from being increased. Damage control -- it's the truth. Small businesses cannot afford more taxes. The privatization bill is also one of our greatest victories. The fact is, we achieve at least one victory for small business every year. But we really need major surgery in this state. I'd love to just knock out everything and start over again, because we're still in the plantation era, and this is not a plantation state. This is a small-business state and major reforms are needed.
Personal prospects
MC: Will you retire soon?BT: Well, it's not like I would retire from life, but Lon and I have a motor home on the other side of the ocean that would like to see more action.
MC: Really?
BT: Oh, yeah. Our son Lon Jr. is an RV (recreational vehicle) dealer in Washington state, so we got a great deal on our motor home. (Son Chris is general manager of the Renaissance Wailea Beach Resort on Maui.)
MC: So you would spend time driving around the mainland?
BT: Yeah, traveling and writing. Lon enjoys photography and I have all these writing ideas. Four years ago I told NFIB this is what we want to do, but they talked me into staying awhile longer. Even our good friend Sen. Norman Sakamoto said, "Bette, who would represent small business if you weren't up here?"
MC: That's a good question. And it would be nice for you to hang in there for another year, to kind of midwife the baby.
BT: Isn't that true? I said to Lon, "If Linda wins, I would like to stay on another year just to kind of watch things evolve."
MC: She'll need allies.
BT: Yeah, I think so, but you know, I really do think Bobby and Calvin (Senate President Robert Bunda and House Speaker Calvin Say) are going to work with her.
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Victory at last:
The NFIB’s decision
to endorse Linda Lingle
Mark Coleman: Why did the National Federation of Independent Business endorse Linda Lingle?Bette Tatum: Four years ago, Linda called from Maui and asked to meet with me over dinner. I had never met her and was impressed that she had personally called me, saying, "This is Linda Lingle, could we meet for dinner?" I said, "Well, of course." So she flew over, met me at the curb of the Hilton Hawaiian Village, and we dined, the two of us, for about three hours. She said she wanted to learn more about small business. That impressed me. I'd never had anybody running for governor call and say, "Could we talk and see what needs to be done for small business?"
NFIB had never endorsed a governor in this state, but having watched her the last four years, and having listened to her, we thought, you know, maybe we could get some major changes here. My Maui members have known her for a long time -- 10 years on the Maui County Council, eight years as Maui mayor -- so they know her very well, and they said she is really good. Since she has owned and operated a business, she knows what it means to meet a payroll. So we went to a lot of trouble to survey our members about whom they wanted for governor, and you know it came back 96 percent Linda Lingle, 4 percent Mazie? Then I had to write an in-depth paper to send to the national organization as to why NFIB should endorse Linda Lingle.
MC: Are groups like yours allowed to endorse candidates?
BT: Well, one of the things that sets NFIB apart from other organizations is that we don't work for anything, for or against, that our members haven't voted on. That is why we had to survey the members. It's a lot of hard work, and it was a gamble, to be frank about it.
MC: Yeah, because then if she lost ...
BT: Yes, but we kind of felt this way: If we lost, we haven't really lost that much because we don't get that much help anyway, right? (Laughter) But if we win, then we hope we have a good friend.
Mark Coleman's conversations with people who have had an impact on our community appear on the first Sunday of every month. If you have a comment or suggestion, please send it to mcoleman@starbulletin.com.
