With 2/3 of the 2001 60-day State Legislature completed, lawmakers face the annual end of session crush to resolve the major and controversial issues. Heading the list this year from the start, have been union demands for substantial-and some argue "budget busting"- pay raises. Governor Ben Cayetano is holding firm against major hikes he views as "excessive." The Hawaii Government Employees Association (HGEA) demands funding of a previously won arbitration award, while the teachers union, HSTA, and University of Hawaii professors union, UHPA, voted overwhelmingly to strike the state April 5 if their salary demands are not met.

Democrat legislative money committee heads, Rep. Dwight Takamine in House Finance and Sen. Brian Taniguchi in Ways & Means, have put union demands-totalling nearly $400 million-on a fast track while proposing eliminating past tax cuts and suggesting new tax increases.

"This is not a tax increase," proclaimed Taniguchi, on March 8. The Senate then voted to end the reduction of previously enacted personal income tax rate reductions-in effect a tax increase-by a contentious 14-11 vote (same as the Margery Bronster vote!) It may not survive the rest of the Session, however, but House Speaker Calvin Say, in support , explained that taxpayers didn't even thank lawmakers for the tax cut (the only one in Hawaii's history) in 1998 which was spread over 4 years. Every Democrat lawmaker who ran for re-election last year trumpeted their support for the tax decrease. The Governor cited the reduction as one of the keys to his belief that the Hawaii economy had "turned around." He threatened to veto any bill that disturbs the promised tax cut.

The $14 billion biennial budget for the two fiscal years beginning July 1, 2001, represents an 11% spending hike. The budget is not balanced as required by the Hawaii Constitution, currently exceeds the state's spending ceiling, and does not include the massive amounts of taxpayer funds destined to the pockets of unionized public employees.

Money for capital improvements projects (CIP) add yet another $1 billion. Lawmakers must decide what to cut, priority items and if to raise taxes in Hawaii's over-taxed state. Economic slowing on Wall Street, in mid-America and Asia, coupled with soaring energy costs will also have a profoundly negative impact on the state's attempt to recover economically. A Special Session may be necessary to cover finances.

Republicans in the State House have successfully fought to make sure bills of importance to the people of Hawaii are discussed in public. Democrats enjoy a majority and have used their power to keep the public from learning how they stood on important issues like tax cuts, an elected attorney general, and the age of consent. This is the first time in more than 40 years that the people know how the majority stand on controversial issues. House Republicans, led by Reps. Charles Djou and Mark Moses, have challenged "secrecy" and lack of worksheets in the budgetary process. In the Senate, Minority Leader Sam Slom joined colleague Fred Hemmings on the Ways & Means Committee after a two month struggle based on the Senate's proportional committee representation. It is the first time in 11 years that two Republicans have been there. Djou has also spearheaded an effort to pass meaningful privatization and collective bargaining legislation. Senators Norman Sakamoto (D) and Bob Hogue (R) have been exploring alternatives to educational bureaucracy and the tremendous ongoing costs associated with the Felix v. Cayetano special education consent decree. Hogue seeks major educational decentralization.

Several small business leaders are distressed with voting patterns of past supportive lawmakers this session. "Yes" votes (with "reservations," but yes nonetheless) on critical business issues, such as the Employment Payroll & Training tax, a new bottle bill tax, minimum wage increase, and removal of previously enacted tax cuts, have been generally along party lines where in the past Democrats supported small business. But not this year. PAYCHECKS HAWAII ratings of all 76 lawmakers at the end of the session will critically analyze individual votes and are expected to be much lower than in previous years.

Small business has been seen on only a few occasions at the Capitol: lobbying for GET tax relief as related to Professional Employer Organizations (PEOs such as ALTRES, JS Services, etc.), against minimum wage hikes-particularly if no tip credit is retained-and split on the merits of the EPT tax; those businesses who have been subsidized by other businesses came to testify in support.

Democrat Rep. Lei Ahu Isa (an SBH member) did not like a quote attributed to her in last month's issue and her rebuttal commentary appears in full. State Rep. Nobu Yonamine (D), convicted of his second DUI, decided not to resign after this Session but to serve out his term until next year. SBH's "Lawmaker of the Year," Democrat Ed Case continues to be a maverick and vote independently on many issues. Former Councilwoman turned Senator, Donna Mercado Kim, got the attention of the Hawaii Tourism Authority (HTA) and the industry as a whole when she began to ask penetrating questions and suggested eliminating the HTA. Senate Labor Committee Chair, Bob Nakata (D), played fast and loose with Senate rules in mid-March-and the spirit of the law - by resurrecting a minimum wage bill for a new vote after it had been defeated in his committee three days earlier. The youngest member of the Legislature, 28 year old Rep. Brian Schatz, missed several days of key voting. He had the chicken pox.

Giuseppe Leone to Speak on
Mediation at April 26 Sunrise

The next regular monthly SBH member Sunrise Networking breakfast will be held Thursday, April 26, from 7 - 8:30 am in the Liberty House Pineapple Room, Ala Moana Center, 4th floor.

Speaking will be SBH member Giuseppe Leone, of Mediation Plus, a professional mediator and author, who will discuss mediation and conflict resolution strategies as an alternative to litigation. It is an important topic for small business owners.

The March 29 Sunrise speaker was Ken Schoolland, business educator (Hawaii Pacific University), small business owner (Schoolland International Partnership) and author, "Shogun's Ghost" and SBH's "Jonathan Gullible" economic books. He spoke on free market competitive business growth.

Emphasis at the SBH Sunrise forums is on networking. There are also surprise guests, and curent business information.

Sunrise Networking costs $15 for SBH members and their guests who pay in advance by April 23 (refunds until noon April 25); $20 for non-members and at the door, provided space is available.

U.S. SBA Honors Hawaii's
Best Small Business People

The announcement by the Hawaii District Office of nineteen winners of the prestigious SBA Small Business Awards for 2001 supports a growing confidence in both the local economy and the tenacity of small business owners in Hawaii. The SBA Awards highlight the annual celebration of National Small Business Week each year.

Hawaii's premier Small Business Person of the Year 2001 is SBH member Jeffrey Bloom of Computer Training Academy, JML Hawaii, and STS, Inc., a leader in technology training, support services, computer literacy and workforce development. Bloom has demonstrated the entrepreneurial savvy and drive to expand operations during the economic downturn and has emerged as a critical player in the "New Economy" of the state.

SBA selects the top small business owner based on demonstrated staying power, increase in annual revenues, job growth, innovation and response to adversity. Support to the community is also an important criteria.

Accountant Advocate of the Year is also a member of Small Business Hawaii, Peter A. Matsumoto of Century Small Business Solutions in Hawaii Kai. In addition to garnering the top state award, Matsumoto was the Region IX SBA awardee. The Region includes Hawaii, Nevada, Arizona and California.

Still another SBA member state awardee is Bank of Hawaii, whose Kelly Walsh was named Hawaii's Financial Services Advocate of the Year.

Accountant Advocate of the Year for the City & County of Honolulu is SBH member, Jeannie Hedberg, of Hedberg, Freitas, King & Tom, LLP.

The winners of the SBA Small Business Awards will be honored following National Small Business Week at the Statewide Awards Luncheon at the Sheraton Waikiki on Thursday, May 17.

For more information on the Statewide Luncheon and the small business winners, please contact SBA's Hawaii District Office at 541-2990.

Kaiser Medical Changes Take Effect July 1

by Tyne Cody
Kaiser Permanente Health Plan

A friendly reminder to all of you currently enrolled on a Small Business Hawaii Association group plan. In order to be eligible for a contract renewal effective July 1, 2001 you must provide an active Department of Labor Number (DOL#) to your Kaiser Permanente Account Representative if you intend to keep medical coverage through SBH. These new requirements were announced in the SBH newsletter in June 2000 and a reminder was printed in the March 2001 issue.

CONTACT KAISER PERMANENTE TODAY: Fax your active DOL#, Group #, Company Name, Address, Phone # and Fax # to the attention of your Account Representative in the Kaiser Permanente Business Development Department at (808) 597-5300 so we can renew your current contract on a timely basis. If you are a Sole Proprietor or have a Partnership you may be eligible for the (SEP) Self-Employed Plan. Call us at 597-5955 or fax a request for information on the SEP. We want to have the best plan to meet your needs.

SBH, Nick's Host After Hours Event Apr. 19

Small Business Hawaii and Nick's Fishmarket will host an afterhours networking gathering for SBH members and their guests on Thursday, April 19 from 6 to 9 pm at Nick's Fishmarket. Best news: the event is FREE but advance reservations are required and limited to first come first serve. Call Joey at the SBH office, 396-1724 for reservations. Mark your calendar for the biggest party of the month!

SMALL BUSINESS PROFILE

SBH Top Award Winner Opens
Business Newspaper To Fill A Need

By Malia Zimmerman
Managing Editor

Founder of Pacific Business News George Mason walked away the top awardee at the Small Business Hawaii's 25th Annual Conference. Winner of the SBH Silver Anniversary Leadership Award for 25 years of community service and leadership, more than 300 guests gave the surprised 76-year-old Mason a standing ovation.

"This is probably the last standing ovation I'll ever receive. Thank you." Mason founded Pacific Business News in 1963 armed with common sense and a knack for asking hard questions. Public record was the centerpiece of the paper - as Mason realized businesses could benefit from the information but did not have time to collect it. He discovered this when in 1962 he headed the state's Department of Business, Economic Development. Mason and former Honolulu Star-Bulletin Editor John Ramsey published the first weekly paper on March 18, 1963. They had a strict policy that no articles over 500 words would be published and letters to the editor were cut to be short and to the point.

"No one has time to read more than that," Mason says. His business concept was sound and the paper grew from a circulation of just a few hundred to more than 14,000 - all bought and paid for. "No one got a free newspaper from Pacific Business News. There were no comps. That strict policy really shocked some people in this town who thought they should get a free ride," Mason says proudly.

In 1983, Mason sold the paper to American City Business Journals, a mainland-based newspaper chain with then 27 sister papers. He stayed on to run the paper for 10 more years and became notorious for his record profitability in the chain as well as his extreme frugality. "We'd leave our desks to go to the bathroom and when we'd return, George would have turned off our computer and the lights in the room so as not to waste electricity," says former PBN researcher and writer of the PBN Book of Lists Jay McWilliams.

His mantra to readers was "Our bottom line is watching yours," and he lived by that, McWilliams says.

"Paper clips were collected and counted by a staff member at the end of each day. We used to joke with George that he would recycle staples if he could," she says.

Many aspects of the paper have changed since Mason left, including a smaller circulation, an editorial department that is now managed by people recently recruited from the mainland and fewer additional books and publications overall.

Though the retired publisher doesn't spend much of his time at the newspaper these days, he does submit a feisty column each week that typically points out problems with government or ways business managers and owners can improve profits.

Mason's words of wisdom have brought frequent nods from business owners and cringes from government officials who suffer severe lashings.

A living legend, Mason is a courageous man, a voice of reason for business and an incredible businessman. And in honor of him, this story is exactly 500 words.

Grassroot Effort Brings
Common Sense to Government

The ideal government is one that allows each person to obtain the best possible services and products at the lowest practical cost - an outcome that contributes to the individual pursuit of happiness.

That is one key philosophy of founders of SBH member, The Grassroot Institute of Hawaii, who in January 2001 began to establish the Hawaii-based think tank.

The Grassroot Institute, a first in Hawaii and one of more than 40 non-profit state-based think tanks in the United States under the umbrella organization State Policy Network, will focus on the impact Hawaii's government has on various segments of the community and economy. The Institute directors have mapped out and are in the process of conducting several studies, with the first study on Hawaii's transportation issues. Other studies will seek to determine the impact of the state and city governments on the voting system, the public education system, housing, entrepreneuralism and the business climate.

The Grassroot Institute is looking for volunteers to help grow the organization and for financial contributions. Basic membership in the Institute is $17.76. If you are interested in learning more about the Institute, please call either Dick Rowland at (808) 487-4959 or Malia Zimmerman at (808) 388-5088.