Crunch Time At The Capitol

Larry Price
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Wednesday - April 13, 2011
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Not a whole lot of surprises going on at the state Legislature with less than a month to go, although there are a few bills alive that are still raising eyebrows.

The biggest surprise was intense opposition to a bill that would allow increased privatization of Hawaii’s harbors. There is strong opposition from boat owners because they’re worried about a separate plan to develop Ala Wai Small Boat Harbor. Honey Bee USA Inc. wants to build a training center for the U.S. National Kayak Team and construct shops, restaurants and two wedding chapels to draw Japanese tourists.

The wedding chapels would offset the costs of running the fuel dock and boat-repair businesses.

It was refreshing to hear the word “privatization” surface after being absent from any discussions about improvements for so long.

But the action was in the many suggestions on how to balance the budget. The very powerful Ways and Means Committee voted 13-1 last week on its version of the state’s $11 billion annual budget, which is asking for labor savings equivalent to the continuation of two monthly furlough days. Most government employees took two monthly furlough days over the last two years amounting to about a 10 percent pay cut.

As the search for revenue saving reached a peak last week, state senators were not talking about cutting instructional school days, but school transportation. Senators allocated $60 million from the general fund to keep kids in the classroom. At the same time they took $22 million from school transportation.

State Sen. Jill Tokuda of Kaneohe dropped the biggest bomb on the hearing by pointing out that school bus costs go up 15 percent every year. Special needs student would still be picked up, but other students would need to find another way to and from school.

A lot of concern was expressed about how students would make it to school. The simplest solution and most talked about means to do that would be an increase to the state’s biggest tax generator - the general excise tax.

The Senate Ways and Means asked for input from the public on what they would prefer.

And apparently they got an earful. If you recall, this same question led to furloughs instead of layoffs. This was pretty much the same kind of offer, because raising the general excise tax 1 percentage point could raise up to $500 million a year.

The legislation that was being considered also proposed eliminating exemptions to the GET enjoyed by a wide variety of businesses, including airlines, subcontractors, nonprofit organizations and interisland shippers. That small change could generate another $162 million next fiscal year.

At the end of last week’s fiery debates, although a handful of powerful senators favored the increase in the GET, it was killed by the Senate with a 9-5 vote.

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