Archive for March 2014

Hawaii Legislative Watch: People vs. government

March 25, 2014

2014 Hawaii Legislature

The 2014 Hawaii Legislative Session started on January 15. As of January 23, the bill introduction cut-off date, there were 1,240 bills introduced in the House of Representatives and 1,189 bills introduced in the Senate.

The legislative session is more than half-way through, but I wanted to provide an overview of the proposed bills that could have a big impact on our state.

In the last few weeks, I highlighted proposals about taxes and education that could affect us all. This week, I’m highlighting those bills that champion taxpayers and residents; and bills that affect our rights and freedoms. If I’ve missed any important bills, please let me know! And if you have updates about any of the measures, please feel free to post an update.

Top 4 bills that would empower Hawaii citizens:
* Recall, Initiative, and Referendum: SB2141 and SB2359 would provide for recall; SB2142 and SB2631 would provide for initiative; and SB2143 would provide for referendum. HB1816, SB2360, and SB2361 would provide for initiative and referendum. SB2355 would provide for the recall of the governor, lieutenant governor, state senator, and state representative. As citizens and voters, we should have the right to propose bills, discard laws, and replace public officials.
* Unicameral legislature: SB2154 would create a unicameral legislature, which should consist of 51 members serving 4-year terms. This would not reduce the number of elected legislatures but it could limit the number of proposed bills and eliminate duplicate committees, giving lawmakers more time for discussion and debate. I would add that the legislature should be nonpartisan, which would allow voters to focus on the issues and candidates’ character, not party affiliation.
* Term limits for legislators: HB2417 would limit state representatives to five consecutive full terms. SB2144 would limit state senators to three consecutive 4-year terms and state representatives to six consecutive 2-year terms. This would encourage citizen-lawmakers, and discourage career politicians.
* No fundraisers during legislative sessions: HB1825 would prohibit fundraisers during a regular legislative session or special session. With so many proposed bills, debates, and testimony, lawmakers need to focus on legislation, not elections.

What’s missing from the proposed bills:
* Price tags (fiscal notes): We need a bill that would require legislatures to estimate the costs of each bill, including start-up costs, on-going costs, staffing, financial reporting, and auditing. I would like to see a separate column for “estimated cost” in the summary list of legislative bills.

Look out – the most ill-advised proposed bill:
* Driver’s licenses for undocumented immigrants: HB1673 would allow undocumented immigrants to obtain a motor vehicle driver’s license. The driver’s license is a legal form of identification. This law would take away power from both the people and government to know who is in our state, could encourage fraud, could raise auto insurance costs for everyone, and could make us all a little less safe.

If you want to read more, here are the rest of the significant proposals I found that give more power to the people – or that take power away. It’s a long post. How can we balance our rights and freedoms with the demand for public security and protection?

13 bills that give more power to the people, try to keep us safer, and spend our money more wisely:
1. Photographic privacy: HB1668 would make it a misdemeanor to distribute private, intimate images of another person with the intent to cause serious emotional distress or recklessly creating a risk thereof. Similarly, HB1642, HB2373, and SB2096 would make it a first degree offense to distribute images of the intimate body parts of another, with intent to cause serious emotional distress. HB1750 would make it a criminal offense to distribute without permission a sexual recording made or obtained with the consent of the person represented in the recording. SB2319 would make it an offense to publish partially nude or nude photographs or recordings with the intent to cause emotional distress. Both deliberate and thoughtless actions have consequences.
2. Electronic privacy: SB2630 would prohibit businesses from acquiring or using location data from electronic devices without the owner’s consent. Informed consent is important.
3. More civil protection for victims: HB1839 would establish the Hawaii Hope Card Program to issue Hope Cards to people who have a long-term protective order, with specified relevant information about the protective order and all covered parties. This could help law enforcement deal with stalkers and prevent violence, and give victims more legitimacy when asking for help.
4. Investigating welfare fraud: HB1891 would fund welfare overpayment investigators and recovery workers. HB2262 would authorize the Department of Health to report deaths to state agencies. Recurring verifications should already be in place, especially for long-term recipients.
5. Home care and adult foster care licensing: SB2004 and SB2005 would require home care agencies to be licensed by the Department of Health. SB2006 would require adult foster homes to have a certified caregiver. HB1734 would require the Department of Health to post information and ratings of certain state-licensed care facilities. This would give more protection to the elderly and greater peace of mind for families.
6. Monitoring repeat criminals: SB2387 would require repeat criminals to be electronically monitored if they are not sent to jail. This makes sense; repeat criminals have already proven that they will break the law.
7. Remote live oral testimony: Residents of Hawaii county (HB2125) and Maui county (HB2130 and SB2946) would be allowed to present live oral testimony through audio or audiovisual technology. It is often hard to go to public hearings (either because of work or distance), and this would allow more residents to testify.
8. Websites, email, and text options for meeting notices: HB2382 and SB2289 would require a website to be including on public meeting notices for instructions on meeting testimony; and would allow meeting notices to be provided by email and text messaging, as well as postal mail. SB2638 would allow meeting notices via email. This could save us money in postage costs, as well as get information to the public faster.
9. Vote for a constitutional convention: HB2397 and SB2766 would put the question of a constitutional convention on the 2014 ballot. I don’t know if we need a constitutional convention, but all voters should make that decision.
10. Protections for religious freedom: HB1822 would establish the Hawaii Religious Freedom Restoration Act to prohibit laws that substantially burden a person’s free exercise of religion. SB2328 would allow teaching about religion in public schools are part of the curriculum and allows students to engage in voluntary, student-initiated religious activities. Religious freedom is about not forcing religious participation; it is not about removing all religion from public life.
11. Yes to the cottage food industry: HB1992 and SB2561 would permit the cottage food industry. HB2153 would exempt certain cottage food products from regulations. This is great for home businesses and start-ups, who would sell their food goods at farmer’s markets and bazaars; but it could be a hassle for volunteers who donate to bake sales and fundraisers. SB2381 would exempt food prepared for charitable, noncommercial purposes. Our bake sales and potlucks would be safe from the government.
12. Safer highways: HB2512 would increase the penalties for unregistered vehicles and drivers with suspended or revoked licenses. Instead of letting unregistered vehicles or people with expired drivers licenses drive away, we should be able to impound the car, take away the license, or at least fine the driver.
13. No bathroom breaks on sidewalks: HB1498 and SB2503 would prohibit urination and defecation on paved roads or sidewalks. It’s sad that we need a law for this.

10 bills that give more power to the government:
1. More limits on smoking: HB325 would prohibit smoking on all public beaches. HB2077 and SB2498 would prohibit smoking on University of Hawaii premises. HB2133 would raise the smoking age to 21 years. HB2321 and SB2871 would prohibit electronic smoking devices where smoking is prohibited. HB2577 would prohibit smoking anywhere in a public housing project. I don’t smoke, but I find it hard to tell (not ask) an adult that they can’t smoke.
2. More hurdles to fireworks: HB1628 and SB2087 would raise the fireworks display permit fee from $110 to $300. HB1631, HB1800, and SB2090 would limit the use of consumer fireworks to cultural or religious events. Maybe we can teach people to handle fireworks safely instead of banning them completely.
3. More barriers to food entrepreneurs and food choices: SB2010 would require that food and beverages sold in concessions on public property meet minimum nutritional requirements. HB2202 and SB3015 would require restaurants to offer compostable or reusable disposable food service containers. Consumers and businesses should decide about food choices and food service containers.
4. Wider ban on plastic bags: SB2508 would prohibit businesses from using non-biodegradable single-use checkout bags. SB3111 would prohibit the sale of bulk “biodegradable” plastic bags without approval from the Department of Health. Consumers and businesses should decide whether to use plastic bags.
5. More secrecy in the Department of Hawaiian Home Lands: HB2287 and SB2837 would prohibit certain applicant and lessee records from being disclosed. This is unnecessary; state law already protects personal information from public disclosure.
6. Less power to landlords: HB676 HD1 would prohibit discrimination in the rental of real property based on lawful source of income. In theory, we shouldn’t discriminate against lower-income people. But landlords have the right and financial duty to evaluate possible tenants based on their ability to pay rent and whether they will be a responsible tenant.
7. No super-sized drinks and no fruit punch for kids: SB2693 would set a maximum serving size of 16 fluid ounces for sugar-sweetened beverages at food establishments, and would prohibit sugar-sweetened beverages as part of children’s meals. This is petty. Restaurants and adults should be able to choose their beverage size (I know that I often share a drink with my spouse). And parents should be able to choose their children’s drinks.
8. Government-mandated body mass index: SB2351 would require doctors to provide an annual body mass index measurement to children ages 2-18 and the Department of Health. Not only is this an invasion of privacy, it could negatively affect children’s body image. I may be paranoid, but I am concerned about how the Department of Health could use this information. Could children’s records be tracked? Could it be used to determine how much lunch students are served in school?
9. Fees for all fishermen: HB1911 would require nonresidents to buy a permit in order to fish in saltwater or freshwater. Most nonresidents would charter a boat; the charter company already pays for a fishing license. HB1912 would require everyone to get a license to catch saltwater fish for noncommercial purposes. This is basically a tax on subsistence fishing and recreational fishing, since commercial fishermen already pay a license fee. HB2379 would limit the number of aquarium fish permits issued statewide to 100. Is this necessary? The limit of 100 permits, with no more than 25 permits in any one county, seems arbitrary.
10. Petty restrictions on dog owners: HB2599 would require notification if a dog license is transferred. I don’t think the government needs to get involved in pet licensing.

6 bills that need further debate:
1. Bank of the State of Hawaii: HB2112 would require a study to establish a bank of the State of Hawaii, which would buy distressed residential properties. I am not convinced that we need a state bank.
2. Voting age of 16: HB1779, HB1781, SB2015, and SB2016 would lower the voting age from 18 to 16 years. While I encourage everyone to vote, I think that we should be informed voters who consider candidates and issues carefully, and have real-world experience.
3. Protection against unmanned aircraft surveillance: HB1561 would prohibit unmanned aircraft systems by law enforcement to gather evidence. HB1657 would make it a criminal offense to use unmanned aircraft to violate privacy. SB2608 would prohibit unmanned aircrafts to gather information, except by law enforcement agencies. HB1691 is less stringent; it would prohibit unmanned aircraft from collecting data except under a search warrant or by certain law enforcement, counter-terrorist, and military operations. HB1775 would restrict the use of remotely operated vehicles, including the gathering of evidence by law enforcement. HB1827 would restrict the operations of unmanned aircraft systems. SB2152 would allow the police to use unmanned aircraft systems, but provides penalties if it is used to cause a nuisance, fitted with firearms, or invades privacy. SB2582 would require individual consent or a search warrant to track an individual using an unmanned aircraft system, and prohibits them from carrying weapons. This sounds like it is protecting our privacy, but it could also limit legitimate business practices – videographers who record sports events, real estate agents who photograph real estate, researchers who survey remote locations, even kids who play with remote-controlled cameras.
3. Concealed guns: SB2168 and SB2353 would permit the issue of licenses to carry a concealed pistol or revolver. I think that law-abiding citizens with guns can keep us safer, but I’m not confident that the government can keep guns away from criminals or the mentally ill.
4. Marijuana – legal, illegal, or medical: HB1587 and SB2942 would create registered medical marijuana dispensaries, while HB1710 and SB2734 would authorize compassion centers for medical marijuana dispensing. HB1708 and SB2733 would legalize the personal use of marijuana. SB2418 and SB2574 would legalize medical marijuana, and SB2593 would create a medical marijuana registration card. On the other hand, HB1709, SB2358, and SB2735 would make it a civil penalty to possess one ounce or less of marijuana. HB2124 would legalize marijuana for export only. SB2316 would create a task force on medical marijuana. HB2358, HB2660, SB2175, and SB2645 would authorize the growing of industrial hemp. Personally, I think that marijuana can be regulated safely and is no more dangerous than alcohol, and it could bring in a lot of tax revenue; but I don’t know enough about it..
5. Fertility rights for women and cancer patients: HB2355 and SB2909 would provide insurance coverage equality for women diagnosed with infertility. HB2061 and SB2694 would require insurance coverage for embryo, oocyte, and sperm cryopreservation for adults diagnosed with cancer who have not started cancer treatment. I am conflicted. Everyone has a right to have children, but fertility treatments are a privilege, not a right. Maybe this should be an insurance policy option?
6. Bills of rights for special interests: HB1889 and HB2661 would establish a homeless person’s bill of rights. HB1910 would establish a bill of rights for disabled persons. The bill of rights covers everyone. Should some people get special protections or privileges?

The 2014 Hawaii Legislature adjourns on May 1. Please think about these tax issues and how they may affect you and everyone around you. If you feel strongly about an issue, speak out! Talk to your family and friends, let your Hawaii legislators know about it, and write letters to the local newspapers.

Hawaii Legislative Watch: Education

March 18, 2014

2014 Hawaii Legislature

The 2014 Hawaii Legislative Session started on January 15. As of January 23, the bill introduction cut-off date, there were 1,240 bills introduced in the House of Representatives and 1,189 bills introduced in the Senate.

The legislative session is more than half-way through, but I wanted to provide an overview of the proposed bills that could have a big impact on our state.

Earlier this month, I highlighted tax proposals that could affect us all. This week, I’m highlighting education proposals, spending, and reforms. If I’ve missed any important bills, please let me know! And if you have updates about any of the measures, please feel free to post an update.

Top 3 educational reforms to maintain our schools and encourage college graduates:
* Crowdfunding for education: HB2631 would establish a civic crowdfunding pilot program to fund specific repair and maintenance projects at Hawaii public schools. This would help us decide exactly how our money is used, and let us help the schools and projects that we support. It seems modeled on, which lets teachers ask for help in funding a project or classroom supplies.
* Pay college tuition after you graduate and get a job: HB1516, HB1524, HB1566, HB1874, SB2209, SB2379 would propose a “pay forward, pay back” pilot tuition program. This is a great idea to encourage higher education and possibly encourage college graduates to stay in Hawaii. Ideally, the program would be self-sustaining, with tuition pay-backs supporting current students; but I don’t know how much it would cost to set up.
* Department of Education audit: HB1530 would require a financial and management audit of the DOE. Hawaii spends around 26% of the state budget on education, according to But many of us don’t trust that the money is being spent efficiently. An audit could help us find more ways to cut back on waste and inefficiency, and create more trust in the DOE.

4 more positive education reforms:
1. High school tuition for foreign students: HB1696 would allow charter high schools to charge tuition to foreign students who study online with the school and attend the school for at least one semester to earn a diploma. This makes sense. Public education is paid for by Hawaii taxpayers, to benefit Hawaii and US military schoolchildren.
2. Emergency response for anaphylactic shock and sudden cardiac arrest: SB2017 would require that schools maintain a supply of epinephrine for anaphylactic emergencies, to be administered with the written authorization of the student’s parent or guardian, as well as medical certification. HB1777 and SB2422 would allow trained volunteers to administer epinephrine for anaphylactic emergencies, with parental permission and supplies. HB1747 and SB2610 would require schools to have automated external defibrillators (AED) and athletic trainers to be certified in their use. This sounds reasonable, as long as there is parental permission, and teachers and school administrators can volunteer for certification.
3. Equal participation for home-schooled students: SB2165 would allow home-schooled students to participate in extracurricular activities offered at their local public school. I thought this was already the law?
4. Seat belts in school buses: SB2271 would require school buses to be equipped with seat belts by 2017. Not only would it keep kids safer in an accident and make bus driving more orderly, it would also show children that they must obey the seatbelt law.

7 education reforms we can’t afford:
1. Mandatory kindergarten: HB1487, HB1818, HB2025, HB2419, and SB2768 would make kindergarten mandatory. I think that parents should make the decision to enroll children in preschool and kindergarten, not the government. Some children might benefit from spending more time with parents and family members, before being sent to a classroom.
2. More restrictions in the cafeteria: SB2019 would require that school meal menus include certain nutritional information. SB2190 would require school menus with options for low-fat, plant-based, and high fiber entrees. We already strive to offer healthy meals. I would rather put this effort into the classroom and extracurricular activities, or sponsor nutrition workshops for parents.
3. Another statewide literacy program: HB1596 would establish a statewide literacy program utilizing local programs and nonprofits to provide direct services. This seems redundant; we already have multiple literacy programs.
4. More school surveys: HB1925 and SB2210 would require students in grades 6-12 to take a Youth Risk Behavior Survey in odd-numbered years. Why is this necessary? I am uncertain about how honestly students would answer these questions and whether it is worth the cost of the survey.
5. New Instructional Office of Hawaiian Studies: HB1551, HB1552, SB481, and SB2740 would establish the Instructional Office of Hawaiian Studies to provide instruction to public school students in Hawaiian history, culture, arts, and language. Is this necessary? Most schools already offer Hawaiian culture and history classes, and there are many museums, celebrations, and non-school opportunities to learn about Hawaiian culture.
6. Tax credit for homeschoolers: HB2603 would establish an income tax credit for parents or guardians who home-school their children. It sounds nice, but then everyone without school-age children or who send their children to a private school would ask for a credit.
7. More school and community gardens: HB1571 and SB2226 would authorize programs to encourage school and community gardens. This sounds reasonable, but there are already nonprofits and community groups that help create public gardens. Can we work with existing groups, before using taxpayer money?

9 education bills that are up for debate:
1. Longer school day and longer school year: HB1675 and SB2139 would require all public secondary schools to offer 990 student instructional hours, repeal the requirement that all public schools implement a school year of 180 days, and repeal the requirement that all public schools require 1,080 student instructional hours for elementary and secondary school grades. SB2922 would lengthen the school year from 180 days to 190 days. It sounds reasonable that more time in school would mean a better education, but there is also a lot to learn outside of the classroom. Maybe the school day and school year should be based on what children need to learn, rather than teaching to fill up instruction hours.
2. Back to junior kindergarten: HB1578 would delete the repeal of junior kindergarten. HB1665 and HB2632 would delay the change in the cut-off date for kindergarten by one year. HB2389 would change the kindergarten cut-off date back to December 31 (instead of July 31 as set in Act 178). These bills just delay the decision-making. Make a decision and stick with it. Not all children are ready for kindergarten.
3. Junior kindergarten for some: SB2189 would allow the Early Learning Advisory Board to determine whether a “late-born” child (born between August 1 and December 31) who is ineligible for kindergarten, should be allowed to attend kindergarten. SB2299 would allow the principal to allow 4-year olds into kindergarten. These bills have some conflicts – junior kindergarten may be reinstated; 30 will public schools will offer preschool. If younger children are ready for kindergarten, what about age-eligible children who are not ready?
4. Public preschool classrooms: HB1676 and SB2236 would allow the Executive Office on Early Learning to use vacant or underutilized classrooms as public preschool classrooms. This may be premature –junior kindergarten may be reinstated and 30 public schools will offer preschool.
5. Physical and dental exams: HB1776 and SB2235 would require children to have physical exams prior to attending kindergarten, sixth grade, and ninth grade. HB2456 would require a child to have a dental exam prior to entering an elementary, middle, intermediate, or high school for the first time. SB2298 would fund hearing and vision tests in schools. This sounds reasonable, but this should be the responsibility of parents and pediatricians. If the DOE begins keeping student health records, what will they use the information for and how will they protect students’ privacy?
6. Restraint and seclusion: HB1796 and SB2371 would allow schools to restrain and seclude students who pose an imminent danger to others. HB2302 and SB2852 would allow schools to restrain and seclude individuals with developmental or intellectual disabilities to reduce the risk of harm. I appreciate that we need to keep students and staff safe, but I am concerned about restraining children.
7. School “scholarships” (vouchers): SB2231 would create scholarships to eligible students for enrollment in nonpublic schools based upon financial need. I like the idea of offering children more choices of schools, but taxpayer money already pays for public schools. How much more money will be spent on education? Shouldn’t this be handled through private scholarships and grants?
8. Sex education: HB1778 would regulate sex education programs and the definition of genitalia. HB1794 and SB2213 would specify elements of sex education and allows parents to opt-out students. HB2374, HB2480 would allow parents to opt-out students from certain health lessons. HB1884 would regulate sex education and make curricula information public. As a parent, I would want to preview the sex education curriculum and opt-in, rather than opt-out.
9. $25 million for air conditioners: HB2596 would appropriate $25 million for air conditioning in classrooms. HB1690, SB2320, SB2424, and SB2559 would appropriate an unspecified amount for air conditioners. Not all classrooms need or can afford air conditioners, which have continuing costs in maintenance and electricity. Can we try less expensive solutions first, like fans, portable air conditioning units, rooftop cooling systems, or canopies so that classes can be moved outdoors?

The 2014 Hawaii Legislature adjourns on May 1. Please think about these tax issues and how they may affect you and everyone around you. If you feel strongly about an issue, speak out! Talk to your family and friends, let your Hawaii legislators know about it, and write letters to the local newspapers.

11 key principles of government information

March 11, 2014

Freedom of Information Day

President James Madison wrote, “Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.”

Governing ourselves means making hard choices, and the most powerful tool we have to make good decisions is information. That’s why we celebrate Freedom of Information (FOI) Day on March 16, the birthday of James Madison, who is widely regarded as the Father of the Constitution and as the foremost advocate for openness in government.

According to the American Library Association (ALA), there are 11 key principles of government information:

1. Access to government information is a public right that must not be restricted by administrative barriers, geography, ability to pay, or format. Informed citizens help ensure government accountability and help balance the power of government.

2. The government has a responsibility to collect, maintain, and disseminate information to the public.

3. Government information regardless of form or format should be disseminated in a manner that promotes its usefulness to the public.

4. Depository library programs must be preserved to provide equitable, no-fee access to government information for the public.

5. The cost of collecting, collating, storing, disseminating, and providing for permanent public access to government information should be supported by appropriation of public funds. I understand that some documents are sensitive, but forms can be designed to automatically block out personal information.

6. The role of private publishers should complement government responsibilities in the collection, storage, and dissemination of public information. Private sector involvement does not relieve the government of its information responsibilities.

7. Government information policy must ensure the integrity of public information.

8. It is essential to safeguard the right of the government information user to privacy and confidentiality.

9. Government has an obligation to preserve public information from all eras of the country’s history, regardless of form or format.

10. Government has a responsibility to provide a comprehensive cumulative catalog of government information regardless of form or format.

11. Copyright or copyright-like restrictions should not be applied to government information.

In Hawaii, we are empowered by the Hawaii Uniform Information Practices Act, which governs access to public records; and the Hawaii Sunshine Law, which sets requirements for public meeting notices, meetings, and minutes. These laws help us watchdog the government and encourage citizen participation. However, Hawaii voters are denied the rights of initiative (the power to vote on citizen-generated new legislation), referendum (the power to vote on existing legislation), and recall (the power to remove and replace public officials) – though all three rights have been proposed in the 2014 legislative session.

There is also the separate but related issue of journalistic protection against revealing confidential sources. Currently, Hawaii doesn’t have a “shield” law for investigative journalists, reporters, and bloggers. There are carryover measures in the House and Senate, as well as two proposed bills in the 2014 Hawaii legislature: SB2974 would re-enact the existing but expired law and “make permanent the limited news media privilege against the compelled disclosure of sources and unpublished sources.” SB3096 would establish “the limited news media privilege against the compelled disclosure of sources and unpublished sources.”

Do we have the knowledge and tools we need to govern ourselves? How would you rate government transparency and government record-keeping in Hawaii? Have you ever requested public records under the Freedom of Information Act? If you have, was the information available, affordable, and received in a reasonable amount of time? 

Hawaii Legislative Watch: Taxes

March 4, 2014

2014 Hawaii Legislature

The 2014 Hawaii Legislative Session started on January 15. We’re in the middle of a 60 day session filled with speeches, paperwork, arguments, and revisions.

When I first checked the measure summaries on January 16, there were 242 bills introduced in the House of Representatives and 270 bills introduced in the Senate, as well as 1,362 House carryover measures and 1,218 Senate carryover measures. By January 23, the bill introduction cut-off date, there were 1,240 bills introduced in the House of Representatives and 1,189 bills introduced in the Senate.

Honestly, I don’t know how our legislators can be expected to read and understand every proposed bill, figure out how much they would cost, and debate about any unintended consequences. I worry that they don’t understand all the costs and effects of their law-making. I don’t understand why there isn’t a limit on the number of proposed bills that can be introduced – and why so many duplicate bills are accepted.

The legislative session is more than half-way through, but I wanted to provide an overview of the proposed bills that could have a big impact on our state.

Here are the tax highlights from the 2014 Legislative Session. There are many more tax proposals, increases, decreases, and adjustments; as well as numerous tax credits, exemptions, and repeals. If I’ve missed any important bills, please let me know!

The 3 most reasonable and positive tax reforms:
** Flat income tax: HB1835 would require the Department of Taxation to develop a plan and proposed legislation to implement a flat income tax. Taxes should be simple and easy to understand. Our state and federal tax codes are far too complicated need to be simplified.
** Minimum tax refunds: SB3070 and SB3071 would provide for minimum tax refunds or tax credits to taxpayers when the state has a surplus. If we have a surplus, it means we have been over-taxed!
** No corporate income taxes: SB2767 would repeal the corporate income tax. This would definitely encourage economic growth, but I think it should be limited to the first years in operation or to new or expanded businesses.

Beware – the 4 biggest tax grabs:
$$ Tax on internet purchases: HB1651, HB2135, and HB2507 would require us to pay use tax on tangible personal property sold on the internet as part of the Streamlined Sales and Use Tax Agreement. It’s unconstitutional to tax interstate commerce! It places an unfair burden on businesses, by adding more tax collection paperwork. It discourages small businesses by making it harder to compete with big retailers. Especially in Hawaii, it penalizes consumers who want to save money or buy products that cannot be found locally. The out-of-state retailers do not cost Hawaii anything and have no tax representation. Further, Hawaii businesses would have to pay taxes to other states, without gaining any benefits from those states or having tax representation.
$$ GET increase: SB2041 would increase the GET by 1% for a 2-year period to fund the acquisition and management of agricultural lands. A GET increase would hurt everyone. And I think lawmakers would find a reason to let the increase continue after 2 years.
$$ Higher county surcharge on state taxes: HB1606, SB359, and SB2115 would allow counties to add a surcharge of 1% to the state tax, without a sunset date. SB335 would allow counties to add an unspecified surcharge to the state tax. A county surcharge would hurt everyone – as well as being a burden on businesses, who must collect the surcharge and file more detailed tax returns.
$$ Tax on health insurance premiums: HB2527 would impose a 2% rate increase on all health plans to fund the Hawaii Health Connector. HB2588 and SB2471 would add a 0.66% tax on the gross health insurance premiums derived from the sale of dental plans and qualified plans. This tax would be paid by everyone, at significant cost, without any health benefit, whether we use the Hawaii Health Connector or not.

If you want to read more, here are the rest of the significant proposals I found about tax credits, tax increases, and tax policies up for debate. It’s a long post. If you have updates about any of the measures, please feel free to post an update.

Lucky 13 tax credits and more money in our wallets (plus more paperwork):
1. Food and medical services tax exemptions: SB2169 would exempt food and medical services from the general excise tax (GET). SB2202 would amend the food/excise tax credit and tie it to increases in the Consumer Price Index (CPI). This would help all households, and be one step closer to a sales tax, instead of our pyramiding general excise tax.
2. More tax credits for seniors: HB2284 and SB2834 would double the refundable food/excise tax credit amount for taxpayers age 65 and older. HB2285 and SB2835 would triple the low-income household renters credit for taxpayers age 65 and older. SB2833 would provide an income tax exemption for low-income taxpayers age 65 and older. The key is “low-income” seniors.
3. Tie standard deductions, income taxes, and personal exemptions to inflation: HB1815 would provide for annual adjustments to the Hawaii standard deduction, income tax rates, and personal exemption in response to increases in the Consumer Price Index (CPI). This sounds reasonable, and would mean automatic adjustments – instead of waiting for taxpayer complaints.
4. Calculating the effects of major tax increases: HB1764 would require the Department of Taxation to conduct a study to develop a systematic approach to evaluate the costs and benefits of major tax increases. But also alarming, because it reveals that the legislature is considering major tax increases.
5. No taxes on retirement benefits: SB2982 would exclude certain retirement benefits from income taxation. This makes sense if the retirement savings were taxed when they were earned.
6. Tax credits for college savings: HB2612 would provide an annual deduction of $5,000 per individual or $10,000 for a married couple filing jointly against their taxable income for contributions made to an approved college savings plan. This would encourage college education and hopefully lead to a highly-qualified workforce.
7. Tax credit on earned income: SB2205 and SB2276 would establish a state earned income tax credit. I don’t know enough about earned income tax credits, or how this is different from standard deductions.
8. Tax credits for ohana housing: HB1592 and SB2340 would establish a refundable ohana residential housing income tax credit for principal residences. Ohana housing definitely helps to ease the affordable housing shortage.
9. Tax credits for electric vehicles and public transportation: HB2024 would establish an income tax credit for new electric vehicle purchases. HB2064 and SB2513 would establish an income tax credit for public bus pass purchases. Bills that reduce our dependence on imported gas, reduce emissions, and encourage public transportation will help keep Hawaii clean.
10. No estate taxes: SB2187 would repeal the estate tax on estates that are valued at $1 million or less. SB2963 would repeal inheritance and estate taxes. Estate taxes are double-taxation; the money in the estate was already taxed when it was earned.
11. GET exemptions for common expenses: HB334 would remove the sunset of the GET exemption for common expense payments to sub-managers and sub-operators of homeowners associations, community associations, hotels, and timeshare associations. This exemption makes sense; they are not making a profit on those expenses. It would be like taxing yourself for buying a hammer to make home repairs.
12. Tax credit for hiring an individual with a disability: HB2478 would provide a nonrefundable tax credit for hiring an individual with a disability for the first 6 months. Businesses should be able to hire the most qualified person for the job, at a wage both agree upon. That said, we never know what people can do unless we give them a chance.
13. No minimum tax on free hotel rooms: HB1339 would eliminate the $10 minimum transient accommodations tax on complimentary rooms. If something is free, it is free.

Unlucky 13 higher taxes and government’s hand in our pocketbooks:
1. Higher wholesale tax: HB1873 and SB2965 would increase the use tax by 1.5% for 2 years to pay for agricultural lands. SB2013 would increase the wholesale tax from 0.5% to 1.5% beginning in 2015. No. A higher wholesale tax increases the cost of all goods.
2. Higher capital gains tax: HB2405 and SB3013 would tax capital gains as ordinary income. Short-term capital gains are already taxed as ordinary income. By raising taxes, we would discourage investment in new businesses and research.
3. Higher transient accommodations tax (TAT): SB2014 would increase the TAT rate to 10.5% on hotels with non-resident owners. SB1202 would increase the TAT to11.25%. Visitors to Hawaii are taxed enough; we should lower taxes to encourage visitors to come to Hawaii instead.
4. GET to pay for Hawaiian Home Lands administration: SB2268 would require a portion of the general excise tax to deposited into a Hawaiian Home Lands administration account. We need to fund mission-critical state services, not specific departments.
5. Tax on pensions: HB1569 would tax pension incomes of individuals with an adjusted gross income (AGI) of $100,000 or more. I don’t know enough about pensions. If pensions are funded with after-tax money, then the money was already taxed.
6. Paying for health care for (illegal?) immigrants: HB2540 would appropriate an unspecified amount for health care services for low-income, uninsured immigrants. Legal immigrants (legal permanent residents) qualify for Medicaid.  Illegal immigrants should not receive government benefits.
7. Tax on car-sharing: HB1894 and SB2731 would establish a car-sharing vehicle surcharge tax. I thought that we want to encourage car-pooling and reduce traffic?
8. Tax on electric vehicles: HB2145 would establish an annual electric vehicle user fee. Electric vehicle owners already pay the GET and vehicle registration fees.
9. Tax on destination club memberships: HB1900 and SB2774 would establish a tax on annual destination club dues, and require destination club membership plan managers to register with the state. We should encourage people to come to Hawaii, instead of finding another way to tax out-of-state visitors.
10. Higher taxes on smokers: HB1849 and SB2971 would increase the tax on large cigars. HB2074 increase the general excise tax on tobacco products. SB2030 would increase the tax on cigarettes and little cigars “by an unspecified amount.” SB2066 and SB2496 would increase the excise tax on the wholesale price of tobacco products. SB2572 would establish an excise tax on electronic smoking devices. I don’t smoke, but I find it hard to tell (not ask) an adult that they can’t smoke.
11. Higher taxes on alcohol: SB2051 would increase the gallonage tax on various liquor categories. I don’t drink, but do we want to reduce the consumption of alcohol – or just grab more tax money?
12. Tax on conveyances: HB1523, HB1850, HB1703, and SB2554 would apply a conveyance tax to the conveyance of a controlling interest of an entity with an interest in real property and eliminate exemptions.
13. Higher cell phone bills: SB2596 would add a 66¢ enhanced 911 surcharge for prepaid connections – but exempting government entities. SB3103 would impose an enhanced 911 surcharge on prepaid wireless phone service providers, allowing 3¢ to be retained by the seller. The 66¢ tax on retail transactions seems unfair – if I understand correctly, a 30-minute prepaid card would have the same tax as a 1,000-minute prepaid card; and government entities would be exempt.

10 tax bills that are up for debate:
1. $100 stimulus tax credit: HB2026 would establish a $100 stimulus tax credit for Hawaii residents. I wouldn’t object to getting $100 of my own money back, but why not lower taxes instead? And don’t we already have a law that says that if there is a surplus, taxpayers will get a refund?
2. Electronic tax returns: HB2342 and SB2892 would require the electronic filing of tax returns. This may be a burden on low-income taxpayers or taxpayers with complicated returns. Can the Department of Taxation handle all of the electronic data? To encourage electronic filing, could we start with a small tax refund for first-time electronic filers, such as $3, payable via direct deposit?
3. Higher minimum wage: HB 1488 would increase the minimum wage by $1 on 7/1/14, 7/1/15, and 7/1/16 respectively. HB1623 would increase the minimum wage to $10 per hour on 1/1/15. HB1890 would increase the minimum wage to $7.75 on 1/1/15, $8.25 on 1/1/16, $8.75 on 1/1/17, and $9.00 on 1/1/18. HB2136 would increase the minimum wage to $8.00 on 1/1/15, $8.50 on 1/1/16, and $9.00 on 1/1/17. SB2609 would increase the minimum wage to $8.20 on 1/1/15, $9.15 on 1/1/16, and $10.10 on 1/1/17. SB2641 and SB3004 would increase the minimum wage to $8.25 on 1/1/15, $8.75 on 1/1/16, and $9.25 on 1/1/17. HB2278 and SB2828 would increase the minimum wage to $8.75 on 1/1/15, $9.50 on 1/1/16, and $10.00 on 1/1/17. HB2580 would annually increase the minimum wage and tie it to the Honolulu region consumer price index. Generally, only inexperienced and unskilled workers qualify for minimum wage. I’m not sure how much the minimum wage will help workers – and it may even disincentivize people from going back to school or furthering their skills. That said, we should protect workers from businesses who may take advantage of them.
4. General excise tax (GET) exemption: SB2171 would repeal the GET on all intermediary business transactions. I support the spirit of the bill, which is to avoid double (or triple) taxation on the same product; but the GET is a tax on business income. I’m not sure how this exemption would work. In my opinion, a better bill would be to repeal the GET and implement a sales tax instead.
5. No transient accommodations tax (TAT) for local residents: SB1222 and SB2170 would exempt Hawaii residents from the TAT. Is this fair to counties? When we visit neighbor islands, residents are also using the roads, utilities, and infrastructure. Would this be a burden on hotels, who must verify residency and keep records?
6. Lower state income taxes for low-income tax payers: HB1719, HB1806, HB1936, HB2371, SB2206, and SB2207 would reduce or eliminate the state income tax liability for taxpayers with a federal adjusted gross income of less than 125% of the federal poverty guidelines. HB2283 would provide an income tax exemption to low-income taxpayers over age 65. Don’t low-income taxpayers already pay lower taxes?
7. Tax credit for non-GMO produce: HB2187 would give a tax credit to non-genetically modified produce. I don’t know enough about this issue. Is non-GMO produce really healthier?
8. Legalize and tax gaming: SB767 would authorize shipboard gaming and establish an admission tax and a wagering tax. SB769 would grant a 20-year license for a stand-alone casino in Waikiki and impose a 15% wagering tax on gross receipts. I have no problem with shipboard gaming, but I am concerned about a casino in Waikiki. Why not start with a state lottery?
9. Tax incentives for wellness programs: SB2524 would create a tax incentive for employers that implement work site wellness programs. This is admirable, but first let’s ask health insurance companies to offer discounted premiums for wellness programs, instead of jumping to tax credits.
10. Tax credits for hotels: HB1594 and SB2336 would create a 10% tax credit for hotel construction or renovation. SB2965 would create an unspecified tax credit. HB2170 and HB2171 would extend the income tax credit only for new hotel construction. Do we need more hotels in Hawaii? Can our infrastructure support more residents and tourists? In addition to the hotel construction credit, HB2169 would give hotel operators a 4.5% tax credit of wages paid to qualified employees after completing hotel and resort construction or renovation. The hotels would hire employees with or without the tax credit.

The 2014 Hawaii Legislature adjourns on May 1. Please think about these tax issues and how they may affect you and everyone around you. If you feel strongly about an issue, speak out! Talk to your family and friends, let your Hawaii legislators know about it, and write letters to the local newspapers.

“Who Moved My Cheese?” by Spencer Johnson

March 1, 2014

Who Moved My Cheese?

Years after graduation, a group of high school friends meet after a reunion. They talk about their lives, admitting that things are not going so well. One of the classmates tells a story of change:

Once upon a time, two mice, Sniff and Scurry, and two littlepeople, Hem and Haw, spent every day running through a maze “looking for Cheese to nourish them and make them happy.” They find a room filled with Cheese, and they are happy. Then one day all the cheese is gone. Sniff and Scurry are ready to search for New Cheese, and set off fearlessly, eventually finding an even bigger stash of New Cheese. Hem and Haw wait for Cheese to re-appear, feeling entitled to Cheese and afraid of failing to find New Cheese. Hem refuses to do anything, but Haw starts to laugh at his fear and then takes off, searching for New Cheese.

“Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and in Your Life” (1998) by speaker and author Spencer Johnson, is just as engaging and inspirational as it was when it was first published over 10 years ago. It is a timeless, short, and easy to understand story about how individuals, businesses, and even our government can be prepared for and adapt to change. It shares, in story form, how we can cope with change by taking control instead of letting things happen to us.

Haw learns so many things: that what you are afraid of is never as bad as what you imagine; that when you move beyond fear, you feel free; that the quicker you let go of Old Cheese, the sooner you find New Cheese. And he finds an even bigger stash of New Cheese, in flavors he had never imagined.Along the way, he leaves messages on the walls of the maze to show Hem the way.

Haw’s Handwriting on the Wall
1. Change happens. They keep moving the Cheese.
2. Anticipate change. Get ready for the Cheese to move.
3. Monitor change. Smell the Cheese often so you know when it is getting old.
4. Adapt to change quickly. Let go of old cheese.
5. Change. Move with the Cheese.
6. Enjoy change. Savor the adventure and enjoy the Cheese.
7. Be ready to change quickly and enjoy it again and again. They keep moving the Cheese.

Here’s a twist on the search for New Cheese: to local, state, and federal governments, their “Cheese” is “Our Money.” After learning that Hawaii Governor Neil Abercrombie touted a $844 million surplus in his 2014 “State of the State” address, one conversation between Hem and Haw is particularly relevant in the debate over government entitlements – and the fight over “surplus” taxpayer money that is sure to follow:

Hem: “We’re entitled to our Cheese.”
Haw: “Why?”
Hem: “Because, we didn’t cause this problem. Somebody else did this and we should get something out of it.”
Haw: “Maybe we should simply stop analyzing the situation so much and go find some New Cheese?”

Have you had to adapt to a major change at work or in your life? Does change blind-side you or do you try to prepare for the unexpected?