Was the Senate heroic or peevish on unfinished business?

State senators acted like there was something noble in their decision to rigidly enforce a procedural deadline, resulting in the Legislature adjourning with major business left unfinished.

According to news reports, Senate President Shan Tsutsui choked up as he thanked senators for backing a leadership decision to cut off conference committees at exactly the 6 p.m. deadline on their final day instead of letting them go on until midnight, as is customary.

As a result, the Legislature didn’t fund legal settlements the state agreed to, bringing a stern lecture from a federal judge, or pony up for security for the APEC conference we avidly courted. The UH medical school was cut off from tobacco funds and the pay bill for legislators, administrators and judges was botched.

There seems a growing certainly that a special session will be needed to clean up the mess, which makes you wonder about all the self-congratulation among senators.

Tsutsui described the sudden procedural fussiness as a blow for “greater transparency, openness, accessibility for the public,” while Majority Leader Brickwood Galuteria called it a “sea change.”

I’m as much a supporter of transparency and openness as anybody, but I don’t get it. How is the considerable expense of a special session better than spending six more hours taking care of necessary business while they were already in session?

Some who follow the Legislature more closely than I do say it was mostly a display of senatorial pique at the House and Gov. Neil Abercrombie over some budget decisions senators didn’t like.

If there’s any validity to that, we should send Shan and Brickwood the tab for the special session and give them something to really get choked up about.

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31 Comments on “Was the Senate heroic or peevish on unfinished business?”

  1. Cute Lunatic Says:

    I say kick the Senators who were responsible for this idiocy out at the next election. How shame!

  2. Richard Gozinya Says:

    The measure of success as well as the justification for pay comes down to an assessment of activity vs. accomplishment.

    We get a lot of activity from our folks but actual accomplishment…maybe not so much.

    But I’ve flogged that deceased equine enough.

  3. OahuSophist Says:

    As I understand it, the decision was, at least in part, a response to the House’s insistance that the Senate agree to its version of the pension tax. Instead of working toward a compromise, the House decided not “move” on any other bill until the pension tax was agreed to.

    It’s true a number of good and important bills failed to move forward this session and while I don’t disagree with your assessment of the Senate and the role it played, I think it’s important that the House receive its fair share of the blame.

    All in all, it’s my opinion that this session was a huge disappointment as the Legislature failed to fully address budget issues. More big cuts to services were passed without taking a serious crack at revenue generating proposals. Senator Brickwood, during a floor speech on the last day, hailed the session as a success and couldn’t help but wonder by what metric he was measuring.

  4. Michael Says:

    One being Naive.

    Meetings pay the same regardless of 6 hours or 12 hours. Only shows that by shortening the meetings that it seems that they are saving Tax Payers money by not paying “overtime”.

    Comes back to haunt them as stalling a Bill.
    We,the Tax Payers are paying their bill. I call that a paycheck. They should give us a Tax refund.

  5. Teddy Freddy Says:

    I think OahuSophist pretty much nailed it. While certain Chairs on both sides may have been holding some Bills hostage trying to leverage the other side – it was the House who utlized the Finance Committee to freeze the release of a large number of unrelated Bills hoping to leverage the Senate on the pension and other measures. This is SOP for the House and other “old timers”. The Senate simply said, “We don’t want to play your games any more.” The Senate, while fumbling the ball somewhat, should be commended for trying to end the practise of these last minute leverage games. There is no reason to go to midnight and it is ludicrous to do so. 100’s of Bills were “ready to go”, had no or minimal fiscal impact and yet the House failed to release them. The Senate could have extended the deadline and played the “mid-night game” but the House would have used its leverage over and over all the way up until the stroke of the final clock. As to “claims against the State, Apec and the other money Bills” – if these were funded would not that have meant that more revenue Bills would have to be passed and more taxes raised in order to keep the budget balanced? I don’t think you can have one without the other. The gov can restrict funding and move the money around to make the stuff happen that needs to happen. There is no need for a special session. IMHO

  6. Kolea Says:

    I share OahuSophist’s assessment, though would not have been able to express it as well.

    The Democrats now control both chambers and the fifth floor. The timeline for a new, incoming administration –even in the bestof times– conspires against having a well-coordinated approach the first session.

    Seriously, Neil was sworn in in December, spent much of the next couple of months interviewing people for the administration, visiting stateagencies to get a sense of the how crippled they are by years of cutbacks, assessing the personalities and listening to state employees’s ideas on how to improve delivery of core services, etc.

    It would be useful if some reporter were to document how many employees have worked in the Governor’s Office during the past couple of decades. I know Cayetano significantly cut his staff during his term, lLongle started with MANY more employees than Neil is currently allowed. And Neil’s office is facing the greatest challenges of any recent administration. With far fewer staffers and far less money.

    An objective reportercould write an illuminating article along those lines. Also, Lingle’s staff erased the hard drives of government agencies when they left office, essentially crippling the incoming administration even more. I am not talking about “personal” records. I am talking about government records. And software!

    That would also be a good topic for a reporter to investigate. Did Cayetano’s people sabotage the incoming Lingle administration in the same way?I don’t think so, but let the reporterfind out. Such sabotage isnotsimply petty and vicious. It was probably also criminal.

    The Dems had better work out their differences between now and next year’s session. Or the voters will hold them accountable, beyond the dreams of the Tea Party nuts.

  7. Teddy Freddy Says:

    I admit, I do not know exactly how many Bills were “ready to go” and how many had no or minimal fiscal impact. I strongly suspect it was in fact 100 or more. Actually I think Capitolist whatever her name is, posted in this or another blog that she had documented 350 Bills which wound up stuck in and dying in conference. It would be very interesting and useful if Capitol Beat or someone could do the research and find out “How many Bills had reached conference, and the only obstacle remaining was a House Finance release/approval (either did not require or had already obtained WAM approval.” This would show who really was playing games with the Bills.

  8. Capitol -ist/WassupDoc Says:

    AS REPORTED IN OUR ORGANIZATION’S MOST RECENT E-NEWSLETTER.

    I did an analysis of all 368 bills that finished the cross-over process and were expected to go into conference. Of that figure, 336 bills were discussed at least one time during the conference period.

    (By the start of the conference period) Over a dozen bills had already gone through the voting process and had either been signed into law – Civil Unions and the appointment process for the state Board of Education were the most prominent ones – or were being examined by the Attorney General and assorted department heads.

    There are four reasons why the 32 bills were not discussed in conference: House conferees not named (3); Senate conferees not named (5); no conferees named (2); no initial meeting held after conferees named (22). NOTE: Some in the last category were being discussed in another version of the same topic.

    By April 29, the last day of negotiations, 84 bills had died along the way – most of them on that day..

    The GOOD NEWS is that HB 1405 HD1 SB1 CD1 which requires the Office of Planning to establish a state-wide system of greenways and trails passed and has been sent up to the Fifth Floor.

    I first came to the Legislature in 1999 with that concept and later used it for creating the organization in 2002 – see above. However, we finally had to put it on hold – albeit reluctantly – after the 2005 Session when it became apparent that very few legislators gave a flying fagaga about greenways & trails – even on a state-wide basis. ..

    Mahalo to newbie State Representative Jo Jordan (D-45) for submitting the legislation.

    Unfortunately, (our) signature bill, HB 1019 HD1 SD2 – RELATING TO SUSTAINBILITY was the ONLY House bill not assigned House conferees – the Senate did name conferees – so the bill died. The other four bills in which House conferees were not named all originated in the Senate.

    HB 1019 HD1 SD2 would have authorized the revision of allocation from the Environmental Response, Energy, and Food Security Tax (“barrel tax”) passed last year to reflect the original intent of the legislation to fund the three programs as well as to extend the existence of the Climate Change Task Force. It simply makes sense that a fossil fuels tax underwrites these programs.

    The original Climate Change legislation was passed in 2009 but vetoed by former Governor Linda Lingle. That veto was over-ridden in July, 2009, but the former Governor never released its funding so that its purpose was never carried out.

    The original “barrel tax” bill focusing on food and fuel security issues that passed out in 2010 – ACT 73 – HB 2421 CD1 – drastically revised the distribution of the $1.05 tax by allocating over half of it – 60 cents – to the General Fund to help reduce the projected deficit. The remaining 45 cents was split amongst food, fuel and environmental response funds.

    Until this year’s bill got to its last stop – the Senate Ways & Means Committee – it would have returned the “barrel tax” distribution to its original allocation plus it would have re-established the Climate Change Task Force for two more years.

    WAM removed the specific amounts to be distributed, but without House conferees, HB 1019 HB1SD2
    was left in limbo. Not only will 60 cents of the $1.05 “barrel tax” continue to be sent to the General Fund but also the new Climate Change Task Force will not be set up.

    We will not give up. Other local environmental organizations which have taken on the challenge of getting the legislation passed are: The Nature Conservancy, the Sierra Club, and the Surfrider Foundation. Mahalo to them all for being there when it has counted.

    In case you’re interested: All totaled, 252 bills from the 2011 Session were sent to Governor Abercrombie to sign, veto or let pass into law without his signature. As of Monday, May 8,, he’s signed 49 and vetoed 2 – leaving 201 on his desk.

    ADDITIONAL INFORMATION: Although HB 1019 was part of the Governor’s package, I was told that Speaker Say told Abercrombie’s Policy Office that he would not consider any re-allocation which is why Say refused to name House conferees – even though no one with whom I spoke in both Chambers – objected to the amendment suggested by one of the enviro lobbyists – meo/myo – to allocate the “barrel tax”: 29.5 cents apiece to the food & fuel security funds, 1 cent to the Climate Change Tax Force, 30 cents to the General Fund, and 15 cents to the Environmental Response Fund. There was also serious discussion about adding the tax to airplane fuel as well as energy, shipping & ground transportation.

    BTW – Jay Fidell’s Think Tech Hawaii organization is holding a 2011 legislative wrapup on Thursday, May 26. I am sure that he will post additional information on his Star-Advertiser blog.

    Join us for this important luncheon event where we will hear from: Andrew Aoki, Governor Abercrombie’s Deputy Chief of Staff, Senator Sam Slom, Senate Minority Leader and President of Small Business Hawaii, Professor Neal Milner, savvy political analyst and Chad Blair, reporter-host on Civil Beat.

    They will tell us what was accomplished at this year’s legislative session and how it will impact our community. Fresh from battling a $1.3 billion dollar hole in the State budget, find out what measures were taken to stem the tide of red ink. What programs were thrown under the bus? What taxes were raised? What monies were diverted? What tax cuts were eliminated? Will there be a special session?

  9. hipoli Says:

    Oh, good grief, Im about to defend the Senate.

    Cant you all see it? It’s a simple equation, really.

    The Gov saddled up way way way too cozy with the House. Pension-yes. GET-no. Raids-yes. I’m sure other ballplayers can offer other Gov-House-aligned examples. Meanwhile, the Senate was recognized the jockeying that could result in them getting the collective shaft. Meaning, the programs, the services, the populations they hold near and dear were about to be thrown under the bus, and they knew it.

    So, the Senate, like the dysfunctional family they are, stuck together and flipped them both the bird. Who can’t imagine the explicative coming out of Senator Hee as he probably told caucus members what he thought the House and the Gov could go do? 🙂

    We might all not like or agree with the results, namely the dead bills after all that work, but again, we aren’t the elected officials.

  10. WooWoo Says:

    Kolea-

    the wiping of the hard drives is a serious accusation. Can you give any specifics of what kind of files were erased?

    Also, at what point will the Democrats here acknowledge the obvious- that the blame for whatever shortcomings you find in our government must lie at the feet of the Democratic party?

    When Lingle was governor, it was convenient if inaccurate to blame her for perceived failings in government, despite the fact that it only took 3/4 of D’s in the House to override a veto.

    Can’t we agree that the Republicans are irrelevant? If they are, who is to blame?

  11. Kolea Says:

    WooWoo,

    I agree the accusation about the wiping of hard drives is serious. It does not originate with me. I have heard it from high-level administration sources, but also found they were reluctant to publicize the accusation. I heard an echo of Obama’s attitude: “we are determined to look forward, not backwards.”

    I first heard the reports soon after the new administration took over, I continue to hear mention of problems this is causing. And I continue to wonder why Neil’s people have not raised a loud, public stink about it.

    If an objective reporter were to look into the matter and determine the stories are exaggerated or that similar sabotage occurred when the Cayetano administration left, so this is just “payback,” let that story emerge. But I regard the allegations as credible.

    As I wrote, the Dems are in control of both chambers and the fifth floor. The Dems ARE responsible for coming up with a straegy for dealing with the budget crisis. They are not responsible for creating the crisis. Unlike the Republican mantra that this has been caused by “excessive big government” and “lucrative public employee contracts,” I will continue to point out all states are suffering from a similar crisis, whether they are controlled by Democrats or Republicans. The collapse of the financial services precipitated a recession which has resulted in a significant drop in state revenues. That crisis will go away as the economy recovers. The biggest longterm problem facing the state budget is the burden of ever-rising healthcare costs for employees, retirees and public assistance clients. That problem must be faced and so far, neither the national Republicans nor the Obama administration, has done a good job of solving that problem.

    But most immediately, in dealing with the state’s budget crisis, the Democratic elected officials have “stumbled and fumbled” their way through the session, unable to come up with a common approach which is either good social policy or good economics. And, yes, the local Republicans have been irrelevant, not simply because there are so few of them, but because they have nothing to offer, except cheap Tea Party campaign slogans as they seek partisan advantage.

    (Actually, to their credit, local Republican elected officials seem to recognize that Tea Party slogans don’t have much traction here, so they have remained relatively quiet).

  12. Michael Says:

    Last night on PBS Insight many questions were asked and very few answered.

  13. Capitol -ist/WassupDoc Says:

    Kolea:

    Walk across Punchbowl Street and attend some Honolulu City Council committee meetings as well as full Council meetings to hear the teaparty mantra spewing out of the mouth of the newest Councilmember elected with 18% of the vote in a special election to replace Todd Apo.

    Meanwhile, the focus at the Capitol continues to be cut services and inch up some small tax increases instead of raising major revenue generators such as “sin taxes” on sodas, liquor & ciggybutts, legalized gambling – in 2009 an estimated ONE BILLION DOLLARS in illegal gambling flew out of the state after circulating maybe one time on a very limited basis throughout our local economy, primarily for hotel room rentals and hiring cocktail waitresses and dealers – and expanding employment opportunities in fields as diverse as agriculture, renewable energy and high technology.

    FYI: At least $500,000,000 was spent by local residents on trips to Las Vegas/Reno and other locations with legal gambling. Yes, people do want to go on vacations, but even if we could keep a quarter of that money here in the state, that would go a long, long way toward adding to our economic recovery.

    I also strongly object to letting certain people not pay taxes for community services that they use. Why should I have to pay for them and not get other bennies just because we’re renters. For example, it’s not just paying higher county property taxes but also not being allowed to install state tax-subsidized solar water hearters. We offered to pay our landlord the cost of installing the system, but he said that the subsidies are only available for homeowners. Furthermore, even if we were willing to pay for that, his property taxes would be increased as well because he doesn’t live on the property and so he’d have to pass it on to us.

    These old people who get cheap medical care & tax-free retirement income probably live in mortgage-free houses and get double discounts for being old homeowners.

    I’m still looking for a bridge to live under. Any suggestions?

  14. WooWoo Says:

    Kolea-

    The recession is certainly something that originated far from our shores, but it is too easy to let our state legislature off the hook. The housing bubble juiced the economy by letting people use their homes as ATM machines; some of this money made it’s way to Hawaii in the form of vacations. The booming economy of the mid 2000s in Hawaii didn’t happen because there was some sort of local miracle. Just more people took more vacations, and cheap credit drove major construction projects.

    In this time of plenty, what did our legislature do? Spend it all. Gov Lingle introduced a bill a few years back to increase the standard deduction, which effectively means a tax cut for lower income workers. The bill was never heard.

    Democrats love to preach Keynesian economic theory. But the problem is that elected officials only practice half of it. Yes, Keynes said that govt had to step in and make up for lack of private sector demand during recessions. But he also said that on the other end of the cycle, govt should raise taxes, cut spending, and save for a rainy day during boom times. You cannot argue, as some have done here, for both the federal stimulus and an increase in the state GET. Well, you can argue that if you want, but it sure the heck ain’t Keynesian.
    The erastz Keynesian cycle practiced by our politicians (of both major parties) is increase spending during booms because the money is there and increase spending during troughs because you need the stimulus. Ladies and gentlemen, I put forth my humble opinion that this is not sustainable.

  15. shaftalley Says:

    the less laws passed by our state legislators,the more freedom and individual liberties we have.

  16. Kolea Says:

    WooWoo,

    I will agre with large parts of what you have said. I’ll just leave you guessing which parts.

    I disagree a Keynesian could not support both the federal stimulus bill and an increase in the GET. I thought Obama’s stimulus bill was too small, but then I generally follow Paul Krugman (on most things).

    Tax cuts can stimulate the economy, to some extent, but as you know, the marginal propensity to spend declines as income rises. So tax cuts aimed at middle and low income folks tend to be more stimulative.

    The specific, short-lived Senate bill for raising
    the Hawaii’s GET was part of a larger bundle of tax changes. But it included enough increased tax credits for low and middle income people, including a DOUBLING of the personal deduction, which you correctly (in my view) speak approvingly of. The net effect of raisingvthe GET, combined withe the increased credits/deductions, would have amounted to a net tax cut for about half of Hawaii’s people. It started to be a net increase at about $60k for a family of four.

    Would Keynes have approved? The point if the GET hike was to allow continued spending on education, social programs and other important state functions. The alternative, slashing state spending, would accellerate downward dynamics, leading to a decline in consumption, more lay-offs in the private sector and more demand for public assistance, unemployment pay-outs etc. Keynes would definitely oppose the cuts during a recession. (Yeah, I know the “recession” is technically over. But not really. Not yet.)

    How does a state, whose constitution requires a balanced budget, follow a Kwynesian path? CIP projects are exempt from the balanced budget requirement. So there has been an effort to pump money into construction projects. Some of
    it (Mufi’s Train) misguided in my opinion. But it is not just the building trades which need employment and allowing other government agencies to collapse while waiting for the CIP funds to “multiply through the economy” is not a very prudent option.

    To get Keynesian on you, if the marginal propensity of (relatively) affluent people provides for a lower multiplier than outright government spending, then increasing the taxes on upper income folks is more stimulative than cutting taxes on them. And raising taxes on them in order to keep public sector going is likewise more stimulative.

    I have objected to the use of the word “conservative” when applied to many of today’s rightwingers. I truly believe I am being conservative when I argue against destroying public sector programs which serve important social needs. Just as it is foolish to defer maintenance on a car in order to “save money,” the same is true for education, prenatal care, mental health programs, environmental programs, vector control, etc,

    thanks for your thoughtful comments. I just typed this out on my phone with my fingertip because I value the exchange.

  17. Kolea Says:

    WooWoo,

    One last response to one of your points. I agree we should set aside money during “good times.” It is not totally accurate to say the state has not done that. As you are aware, one BILLION dollars of “rainy day” funds were unwisely, perhaps “illegally” invested in non-liquid investments by the Lingle administration. You know the traditional wisdom contained on the saying, “Don’t put all your eggs in one basket”? That conservative advice was ignored. And they ignored oversight mechanism in place which would have required explicit authorization for those investments to be made.

    The state auditor’s report is available online. That BILLION dollars was needed for our current budget crisis, but is not available because conservative investment safeguards were ignored, not by punk Democrats, but by the Republican governor.

  18. WooWoo Says:

    Kolea-

    I’m thumbin’ it too, ’cause you’re worth it. I said way back when ARRA was being debated that the best way to do it was to pick the number, say 800B, and cut checks directly to the states on a per-capita basis to stimulate with as they see fit. This would have mitigated the anti-Keynesian effects of state balanced budget amendments. But there was NO way that Congress would have let that happen. They needed to show how important they are.

    As far as the auction rate securities went, I am under the impression (not researched) that the 1B is a cash flow issue, not a ssolvency issue. Did WAM actually deduct 1B from the budget from this?

  19. charles Says:

    shaftalley Says:

    May 13, 2011 at 4:10 pm
    the less laws passed by our state legislators,the more freedom and individual liberties we have.

    Hmmm. . . so the civil unions bill restricted freedom and individual liberties, eh?

    Interesting.

  20. OahuSophist Says:

    WooWoo,

    I think it’s important to make a distinction between the Democratic elected officials and the Democratic Party of Hawaii. In my estimation, the Party is controlled, at least to some extent, by its “activist left-wing.” Add to that the fact that the those elected officials who are members of the Party don’t seem to pay much attention, or lend much weight, to the Party’s body of resolutions or its Platform.

    So, to lay the problems in the legislature at the feet of the Party is, in my humble opinion, to misplace the majority of the blame. Many of the bills supported by the Party’s Legislation Committee, which advocates for and supports legislation that is related to subject matter resolutions, were either amended such as to weaken them, or simply weren’t passed. Given this, I think it’s fair to say that the elected officials pay far less attention to the Party than they do, say, to the Chamber of Commerce, or HECO.

    Now, that’s not to say the Party is blameless. It’s true the Party could be more engaged, better organized, and more vocal in support of its positions. It could certainly do a much better job of getting organized and active its members to hold the Democratic legislators more accountable to the Party’s position.

    I understand most people think that the Party holds a leash on Democratic politicians, but it is, for better or worse, in fact not the case.

  21. WooWoo Says:

    Sophist-

    Yes, I’m not so concerned with the party apparatus itself as I am with the legislators. I believe a significant part of the problem is the lack of a 2 party system here. Unscrupulous people who aspire merely to power cloak themselves as democrats because that is the only game in town. Put a D after your name, talk anout supporting unions, and put a few signs up on an open district and you’ve got a fair shot.

  22. Kolea Says:

    WooWoo,

    I strongly recommend anyone interested in understanding our current budget crisis read the Auditor’s Report. Not as part of a partisan blame game, but so we can learn from experience. The Executive Summary provides a good overview and is only 4 pages long. Here’s the Report:

    http://www.state.hi.us/auditor/Reports/2010/10-03.pdf

    I am pretty sure you (WooWoo) understand the problem, but for those whose eyes glazed over in earlier accounts, let me try to explain it briefly.

    The State had about $3.8 billion dollars in its treasury. Some of that money needs to be liquid, quickly available to meet expenses. Some of it can be committed to longer term investments in order to generate income. The state has rules on balancing risk, liquidity and return. These rules are to ensure the funds are available when needed, explicitly including when there is an economic down turn and a resulting budget short fall. These are the “rainy day” funds you said the State should set aside during economic “good times” to allow for counter-cyclical spending during recessions.

    The funds are overseen (or not) by the Department of Budget and Finance and invested by its Treasury Management Branch in accordance with law and administrative rules designed to balance risk with return.

    Of the State’s $3.8 Billion treasury, over $1 billion was invested in “auction rate securities,” backed up by student loans. ARS offer high rates of return, which can be attractive. But rules limit investments to no more than 20% of our entire investment portfolio. The State’s investment in ARS rose to 37.88% of our entire portfolio.(!)

    To ensure state funds are not tied up for too long, state law requires that investments have maturity dates of five years or less from the date purchased. The student loan backed ARS have maturity dates from 2016 to 2045(!). Meaning our money can be tied up for the next 35 years!

    The Lingle administration claimed the maturation dates requirement should not apply here, because the bonds can be sold at auction. Er, not when the auction market has collapsed, which forces the State back to relying upon the maturation of the bonds to get our money back. (Duh!)

    When the State invests our funds, they are required to do a risk assessment specific to the particular investment. No such risk assessment was done for these student loan backed ARS.

    And lest people think this was just a bad investment, which also caught other states and municipalities, no other state or municipality invested in these ARS anywhere near as much as the State of Hawaii. And wwhen other investors started bailing on the ARS, Hawaii went in deeper: “Look, the prices are falling! We can buy more of them, cheaper! Yayyy!.” (Not an actual quote).

    This discussion is important because it strikes at a core government responsibility for softening the effect of an economic downturn on our ability to deliver services. Look at WooWoo’s statement above:

    “govt should raise taxes, cut spending, and save for a rainy day during boom times.”

    YES! YES! YES!

    And that was done! And that money would have been available to us except those responsible for investing our money violated Hawaii statute and rules set up to ensure the safety of our funds. The defect was not in the Keynesian assumptions, but in a foolhardy administration which FORGOT there are economic cycles and ignored statutory investment requirements.

    A refusal to examine this episode because it makes the Lingle administration look bad or embarrasses specific B&F employees, or Smith Barney or First Hawaiian Bank means we will not learn from the experience. And God knows we have PAID for the lesson.

    I think to say this has resulted in a “cash flow problem” is incorrect. We have a billion dollars which we cannot touch, cannot use to pay employees, fund programs, fix our schools, etc. The value of those funds is actually hard to calculate, as there is no one willing to buy those bonds in the hope the auctions will resume or willing to sit on hem until hey mature and the students pay us their face value. What was once a billion dollars is now worth considerably less.

  23. Kolea Says:

    A small addendum/correction.

    I was wrong to say the state “cut spending … during boom times.” We did not. But the fundamental point is still valid. During boom times we DID set aside a significant amount of money to help us during anticipated lean times.

    We should also note how some “conservatives” have argued AGAINST rainy day funds, saying that any budget surplus should be returned to the taxpayers as a rebate. An overly simplistic adherence to that principle would have prevented the creation of rainy day funds.

  24. Capitol -ist/WassupDoc Says:

    In personal discussions with various legislators over the past three months, many of them have been quite open in their personal/political analyses about Hawai`i’s future.

    However, what often drives most of them politicaly is their unwillingness to take on the challenge of educating & informing their constituents about the role(s) of state government and the challenges that it faces.

    Even at relatively smnall community meetings, it seems that the call from the audience is both simple and simplistic – DON’T CUT MY BENEFITS and DON’T RAISE MY TAXES!!

    A signficant number of people also insist that legislators cut other people’s benefits in order to make sure that theirs are protected in these trying economic times.

    When I asked if there were some racial/ethnic factors in their constituents’ position, the legislators uniformly said no – except that many people resent both Mainlanders and Micronesians who reduce access to social, human and health services from local folks.

    However, these folks insist that the major reason for their opposition to helping these newbies out is that they are newbies.

    A number of legislators also said that there is a huge information gap about taxation policies – including why the state cannot just run deficits like the federal government does.

    Raising taxes & generating new types of economic activities are important but so is reaching out to average citizens about understanding how the political system works in the real world is extremely important.

    Kolea – re your comments about mass transit. The construction industry will not just be focused on building The Train but also on Transit-Oriented Development including both new businesses and workforce as well as specialized multi-family housing.

  25. Capitol -ist/WassupDoc Says:

    Whoops!! smnall community meetings = small

    Delete “is extremely important” in the next-to-last paragraph. It’s redundant.

  26. zzzzzz Says:

    @Cap– You might want to look into solar installers that install with no up-front cost to the landowner, which your landlord may find amenable, since it will increase the attractiveness of his property as a rental.

    I’d also be really surprised if a solar water heater affected the property tax. I’ve looked at a bunch of property appraisals in the past, and never saw a solar water heater even considered in the comparative analyses. But even if it did, the electricity cost savings should more than offset the increased property taxes.

  27. zzzzzz Says:

    @Cap 11:39– I’ve seen the narrow self-interest you describe too.

    IMO, what’s missing is leadership. There’s no one I can think of with the political capital, charisma, commitment, perspective, and guts to put together a comprehensive plan that involves truly shared sacrifice and sell it, in large part by education.

  28. WooWoo Says:

    CWD-

    Legislators must walk a fine line when “educating” their constituents. I agree wholeheartedly that the electorate needs educating, but most of the time they don’t want to be educated. I think that it is very important to remember that Americans do not elect leaders, we elect representatives. This is not just a conservative slogan. It must be the truth.

    Along the lines of the very accurate statement about everybody wants lower taxes and more benefits, there was a great article/podcast in the Economist a few weeks back that discussed that in the light of direct democracy. They talked a lot about voter initiatives in California. Give voters a strong voice and all you get are low taxes and a lot of prisons.

  29. WooWoo Says:

    Kolea-

    I do not dispute your summary of the errors regarding the auction rate securities. But I remain unsure about the impact on the budget. Excuse my blatant laziness; did the budget consist of the COR top lone figure minus the 1B stuck in ARS?

    Also, I’d recommend checking out the economist podcast I mentioned in the post to CWD. It was
    called “democracy in California”

  30. Kolea Says:

    The legislature can only appropriate money over which it has control. It can specifically authorize the “raiding” of special funds for specific amounts, it can make appropriations based upon reasonable estimates of incoming revenue based upon the projections of the Council of Revenues. And, for some purposes, it can authorize the raising of funds through the sale of state bonds.

    But it cannot appropriate money which is does not have available to it, like the funds invested in the ARS. Were the auctions still occurring, those funds could become liquid and available for appropriation. With the auctions halted, the funds are encumbered and “illiquid,” not available for spending. That definitely affects the budget.

  31. zzzzzz Says:

    Woowoo– I beg to differ somewhat on your example of CA. I lived there for awhile, and I saw that voters were willing to tax themselves for specific purposes, e.g., some counties added to the sales tax to pay for rail, some jurisdictions taxed themselves to buy green spaces.

    My perception was that the electorate did not trust their representatives to spend their money wisely, and was (were?) strongly opposed to taxes that went into a general fund.


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