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Small Business News April 2004
The 22nd State Legislature whiuch convened its 60-day working session Wednesday, January 21, has turned into a highly partisan, non-reform-minded body controlled by majority status quo Democrats in both the House and Senate who seem more concernedf about the upcoming November elections than they do about the welfare of hawaii’s people and the invigoration of Hawaii’s business climate. The Session is scheduled to adjourn May 6.
The first “crossover” of bills from each house took place on March 9. Hundreds of bills were passed with minimal debate or objections. this date also signalled the death knell for many bills that were either not heard in committee or were not passed out of committee for a floor vote. Many of these bills would have reformed education, lowered taxes, eliminated business fees, improved procurement. Instead, the majority measures that did progress raised taxes, fees, spending, thwarted meaningful reform and were more partrisan than in anyone’s recent memory. It was extremely frustrating for several key business organization representatives who witnessed attempt to punish employers, reward unions and retain the imbalance between business and labor.
Workers compensation reform stopped by the unions—again. Even though premiums are on the increase, fraud takes more employer dollars and hundreds of small emploers find their policies cancelled even though there is no reportable accidents, the unions and their elected representatives have barred change.
Taxes, fees, mandates going up—again. If the current bills hold till the end of Session, your Conveyance tax will increase as will your motor vehicle registration and several other fees. There will also be increases to your various employer mandates.There are still attempts to raise your General Excise Tax but with this being an election year, SBH feels confident that won’t happen.
Treatment—not punishment—for criminals. the majority party of the Legislature continues to overstress “treatment” for criminals instead of punishment and incarceration. The majority also continues to pile more restrictions on business and make business responsible for the ills the government won’t address.
Here are a few selected examples of Senate “bad” bills still alive at press time. All Senate bills that passed have gone to the House with the House bills coming over to the Senate.
SB 1491 SD1: Raids various special and revolving funds for a grand total of $55.8 million. The funds will be transferred to the general fund. Funding for all state programs should come out of the general fund.
SB 2125 SD1 increases the conveyance tax. Whether you buy, rent or have a commercial lease that must be recorded, you will be subjected to a graduated scale of increases to this tax based on the real property’s value.
SB 2226 SD1 will earmark up to $1 million annually in excess funds from the unclaimed property trust fund for homeless services. Why not earmark the money for education?
SB 2428 SD2 will establish a special fund within the Department of Education to administer the Hawaii Administrator Standards Board.
SB 2690 SD2 will establish a new tax in disguise to pay for emergency medical services. A new $10 tax will be tacked on to motor vehicle registrations and deposited into a new special fund.
SB 2711 SD2 authorizes the Hawaii Tourism Authority to employ its own attorneys. The Attorney General’s office is very capable to provide legal services for not only the HTA, but also all other state departments. The Governor vetoed a bill like this last year.
SB 3019 SD1 will allow the members of the Police union to take a tax credit of up to $960 for single coverage and $2,400 for family coverage for annual health insurance premiums. This bill sets a bad precedent since all the other public sector unions will ask for the same thing. Items like this should be part of the collective bargaining process.
SB 3036 SD2 will require the Department of Human Services to adopt child welfare social worker caseload standards. It would also require child welfare social workers to be reclassified to achieve a 2-salary range upgrade. This legislation will put a huge burden on the DHS and eventually result in a liability problem similar to the Felix case.
SB 3069 SD2 will transfer the management of the state capitol to the joint legislative management committee. This bill will create all kinds of problems for the executive branch in so far as usage of the capitol goes. It is one of several bills that try to strip powers away from the executive branch.
SB 3189 SD2 will impose a surcharge (tax) on every cell phone user to subsidize 911-locator service. The fee will be used to enable cell phone calls made to 911 to automatically provide information on the cell phone caller’s location. A special fund will be created to administer this program.
SB 3193 SD2 “Gas Caps” was amended to untie Hawaii from the California gasoline price average and instead to a national average. Drivers in California are already paying $2.16 per gallon for regular gas. Prices continue to rise. The amended bill if passed will take effect on July 1.
SB 3237 SD1: Hawaii Rx bill may offer relief to a select group of people who earn $36,155 of annual income or less, the legislation remains flawed even though it was improved over similar legislation passed in the State of Maine. The Hawaii Rx bills will not be entirely problem-free as they contain many requirements that consumers as well as the pharmaceutical industry must follow. The bill also creates a special fund in which monies will be deposited, only to be raided later for something else. It fixes prices and forces businesses to sign an agreement. A similar bill also passed out of the house (HB 2005).
SB 3238 SD2 / HB 2002 HD1 the majority bills in opposition to the Lingle education reform, will transfer funding mechanisms out of the executive branch and to the Department of Education for the purpose of running the education system. This is a bad bill as it is a large power and money play set-up by the majority party for the purpose of taking complete control of the department and education system. It does not reform or decentralize the DOE.
SBH continues to monitor the Session. If you have a question or are following a specific bill or issue, check the SBH website at smallbusinesshawaii@yahoo.com or call our office at (808) 396-1724. Bills can also be researched at the legislature’s website: www.capitol.hawaii.gov.
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