Small Business Hawaii | Volume 23 Number 6 | June 1998
Small Business Hawaii | Volume 23 Number 6 | June 1998
The 19th State Legislature scheduled to adjourn May 5, was extended until May 14. The extra time came from the Governor when 9 Senators refused to go past deadline (Legislative extentions require a 2/3 vote of each house), and was caused by wrangling over the supplemental operating budget, proposed increase in the State General Excise Tax (GET), and inaction on privatization, education and work comp. SBH's Legislative Committee rated the Session a "C," highest grade in a decade.
While House Speaker Joe Souki and a slim majority 28 of 51 House members pushed for imposition of a 34% increase in the GET to fund union pay increases and individual tax deductions, the Senate held firm all session in opposition to the increase, calling it "non-negotiable." In the end, the Senate, buoyed by public support and rallies, prevailed. Souki threw in his crying towel. In November, voters are expected to throw Souki and his towel out of office. Look for a new Speaker - maybe Ed Case? - in '99. The tax increase became the hallmark of the Economic Reviatlization Task Force (ERTF), the Governor's re-election hopes, and the reason no meaningful business climate changes occured. Emphasis on the divisive tax hike stalled or killed most good government-slimming, non-tax, ERTF proposals, and of other better economic options offered by SBH, the Small Business Congress, Bipartisan Legislative Caucus, the Senate's "Peoples' Majority," and community coalitions. No "bold" or "courageous" initiatives were adopted because there was no political will or leadership by the majority. A tax "decrease," estimated at $159 million for personal income taxpayers, with tax rates reduced from 10% to 8.25% (dubbed the "largest tax cut in Hawaii's history" by the Governor), (Hawaii never had a tax cut before), spread over a 4-year period beginning in 1999, was much smaller than proposed by plans offered by the other groups named above. It is offset by reduction in food tax credits, an increase in the Transient Accomodations (hotel) Tax (TAT) from 6% to 7.25%, a new Transient Occupancy Tax - unconstitutional - applied to private time share realty, higher fees for government services and records, and the spectre of higher property taxes because the counties lost more than $30 million in the transfer of TAT funds to market the visitor industry ($60 million up from $26 million a year ago. THE BUDGET The supplemental budget totalled $2.9 billion, a decrease of about 3% from a year earlier. While there was talk of massive layoffs, downsizing and streamlining, in fact, only 120 full time positions (0f an estimated 61,000) were cut; most of these were already vacant. When Capital Improvements are added, the costs and debt burden actually have increased for Hawaii's families. Most troubling, is that already negotiated public employees contracts, an estimated $69 million, are unfunded, and the deficit facing new lawmakers next year is projected at $400-$500 million. Since no meaningful cuts were made to state operations, a new tax battle looms in '99. REVITALIZATION? NO, A FEW POSITIVES There will be no "jumpstarting" of Hawaii's economy until the '98 election. No tax cuts for business, no reduction or elimination of pyramiding (tax-on-tax), no genuine privatization, no tort reform and little downsizing of the massive government bureaucracy passed. Still, there were some bright spots: a small business regulatory reform bill; allowable employee criminal checks by employers; some interim privatization; a more "time certain" permit process; reduction in selected work comp stress cases (only partially addressing the Supreme Court's Mitchell Case), greater IRS conformity (including capital gains reductions); job reference liability reform, and UofH flexibility. A Constitutional Convention vote was authorized for November. DOG SHELTERS, ORANGUTANS AND A "SON-OF-A-DITCH" But time - too much - was spent on bad bills such as one to penalize pet owners not providing proper housing for dogs and other pets, $1 million for an orangutan sanctuary, $ 3.3 million for the Miss Universe Pageant and $10.5 million for the state purchase of the AMFAC-JMB-owned Waiahole water ditch. More accountability and priortization is needed. VETOES TO COME? The Governor still has several weeks to act upon bills passed this Session. He can sign them, allow them to become law without his signature, or veto. Some will be rejected. Lobbying pro/con continues until the deadline.
PAYCHECKS HAWAII Looking for PAYCHECKS HAWAII was created in 1984 as a private, independent, non-partisan political action affiliate of Small Business Hawaii. It is dedicated to non-partisan direct political action for small business in order to improve Hawaii's business climate. (No SBH funds are used for political purposes). PAYCHECKS HAWAII is looking for business-experienced candidates, regardless of political affiliation, running for state office during 1998. PAYCHECKS HAWAII will again assist in the election of those candidates who offer the best opportunity for real economic and investment change. For more information contact Kenny Lum, Chair, PAYCHECKS HAWAII, 396-1724 or FAX 396-1726.
JUNE 24 SHARE N' TELL FORUM PROVIDES MID-YEAR STRATEGIES FOR YOUR BUSINESS The next quarterly Small Business Hawaii Share N' Tell Business Forum will provide you with mid-year strategies to help you do more business during the remainder of 1998. The SBH Share N' Tell will be Wednesday, June 24, at the Kahala Mandarin Oriental Hotel, from 11:00 a.m. to 1:30 p.m. Share N' Tell Member Forums combine networking, education and a social atmosphere to encourage you to do more business and help you cut existing business costs. Members, and their guests, may choose one of nine exciting and educational Table Topics, led by a knowledgeable member-Facilitator, prior to the luncheon program. You will gather and share information pertinent to your business success. Each table topic will last for about an hour and features interactive discussion by all participants.You "share and tell" experiences, questions and alternative business options. The $25 cost of the Share n' Tell Business Forum includes the entire program, luncheon and validated parking. Advance, paid reservations are required for this special rate and will be accepted as received on a first-come, first-serve basis. The cost is $30 at the door if space is available. Don't delaymail your reservation. Call SBH for a reservation form or clip it out of our printed issue.
"YES" Field Trip With Home Inspections, Inc. The SBH "Young Entrepreneurs" ("YES") extend a warm Aloha to Michele Harris, President of Home Inspections, Inc., and Vice President Robert Harris and a BIG MAHALO to Lei Furokawa for inviting the "YES" members to her home for a sample home inspection. Home Inspection is unregulated - no licensing is required by the state, "Make sure the Inspector is an experienced licensed contractor; have it done by someone you know is committed to the industry," advised Michele. A conventional home inspection costs $250 - $350. The inspection reports attempt to depict the home and property in its condition at the time of the inspection. The service can provide sellers real property disclosure statements, answer questions and give recommendations on building codes, contractor requirements and provide drawings and make arrangements to obtain building permits. Home Inspections, Inc. is also available as expert witness for attorneys, arbitration services and insurance surveys. Michele, a licensed General Building Contractor, has been with the company since its inception in 1987. She has built new homes and remodeled residences and commercial establishments on Oahu, Maui and the Big Island. She was named SBH's 1996 Success Story. Her advice, "It's important to work with people who are experts in your field." Special Note: The Annual "YES" picnic will be Sunday, July 19, at the Waimanalo residence of Eve Anderson. Fun, food and games! All welcome! Details next month - or call Helen Rapoza at 739-0400.
Year 2000 Workshop For Small Business On Friday, June 12, the US Small Business Administration (SBA), in cooperation with SBH member Hawaii National Bank and Coopers & Lybrand L.L.P., team up to present a "Year 2000" workshop to help Hawaii¹s small business and professional community prepare for the new millenium. Participants will learn how to conduct a simple risk assessment, what questions to ask business partners, and how to prepare computers and other equipment for the year 2000. The session will be 8:30-11 am at the Dole Cannery Ballrooms. The cost of the workshop is only $10 and includes a continetal breakfast and validated parking. Each participant receives a "Year 2000" toolkit with computer diskette and other support material. For information and reservations, contact Hawaii National Bank during usual business hours at 528-7885 or 528-7820. Advance registration by June 5 required; seating is limited.
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