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Small Business News June 2005 | Online Edition
The 2005 State Legislature adjourned as scheduled on Thursday, May 5, after giving away the store to public unions, meeting private union demands, eroding the power of the Governor - the first Republican in 40 years - while doing nothing for business or Hawaii's business climate.
Lawmakers passed a belt-busting $8.9 billion two-year state budget. Only 3 votes of 76 were against: Senators Sam Slom and Gordon Trimble and Rep. Chris Halford. Nothing positively affecting business passed but measures that did pass will harm business by increasing the General Excise Tax (HB1309) another 12 1/2%, increasing the Conveyance Tax, increasing the minimum wage (without any adjustment in the "tip credit"), no business tax credits, no support for Unemployment Compensation tax reductions or long term health care provided by employers. Even the "Small Business Bill of Rights" developed by the Small Business Regulatory Relief Board was trashed by the majority Democrats who control 41 of 51 seats in the House and 20 of 25 seats in the state Senate. The Chamber of Commerce of Hawaii did not represent business with its support of the GET tax increase. Every other business association opposed the tax. Even several House Republicans, led by Minority Leader Galen Fox, disappointed businesses by voting for higher taxes and fees, higher minimum wage and other union-backed special interest bills. The only positive business measure was the small business procurement bill which should give more preferences to small business in obtaining government bidsãwithout the overly burdensome paperwork and regulations in effect now. Workers' compensation reform ãthe number one business preferenceãwas trashed again this year with only SB 1808 passing. This "weasel" bill strips power from the DLIR Director and gives more power to unions and workers at business' expense. Another bill, SB1352, strips management powers from state and county managers who need to reassign public workers. Legislators did take care of another important groupãthemselves. Lawmakers received a pay increase in January, then voted to increase their travel allowances (HB1235) and annual office allowance, from the current $5,000 to $7,500 (HB1236). SELECT THIS LINK TO VIEW THE 2005 LEGISLATIVE RATINGS
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The Session is graded "F" by Small Business Hawaii. That is based on the fact that there was no tax relief, no relief for employers burdened with high costing mandates (work comp, prepaid health, TDI, etc.) and no meaningful regulatory relief. 