Archive for March 2019

2019 Hawaii Legislative Watch: Debt

March 26, 2019

Last week, I highlighted five Reports to the Legislature about what government accomplished last year. Those reports were from the Department of Taxation (DOTAX), Public Housing Authority (HPHA), Executive Office on Aging (EOA), Office of Hawaiian Affairs (OHA), and Honolulu Authority for Rapid Transportation (HART).

 

The report that caused me the most confusion and unease is the Statement of Total Outstanding Indebtedness of the State of Hawaii and the Statement of the Debt Limit of the State of Hawaii as of July 1, 2018, prepared by the Depart of Budget and Finance.

 

The Department of Budget and Finance oversees the general management of 1) State debt, 2) revenue bonds and special facility revenue bonds, and 3) the issuance and management of special purpose revenue bonds, or tax-exempt debt incurred by private parties pursuing qualified projects in the interest of the general public.

 

State debt includes reimbursable and non-reimbursable general obligation bonds, special assessment bonds, refunding bonds, mortgage credit certificates, short-term loans, certificates of participation, and municipal lease financings.

 

Hawaii had a total principal amount of outstanding indebtedness of $11.49 billion. Of this amount, $4.81 billion can be excluded under Article VII, section 13, State Constitution, making the excess of outstanding indebtedness over exclusions $6.67 billion as of July 1, 2018. Note: This does not include County debt.

 

The State of Hawaii has a debt limit of 18.5% of the average net general fund revenues of the three preceding years ending June 30 – currently, $1.36 billion.

 

Hawaii’s population of 1.42 million people is closest in size to Maine with 1.34 million people and New Hampshire with 1.36 million people, according to the US Census Bureau. How does Hawaii’s outstanding debt compare?

 

In 2016, the most recent fiscal year available from the US Census Bureau, Hawaii had a combined state and local outstanding debt of $15.38 billion, compared with $7.80 billion in Maine and $10.44 billion in New Hampshire. What is there such a big gap in public debt?

 

Debt can be good. Government debt can fund public projects, capital improvements, and respond to emergencies.

 

How much debt is too much? Are some types of debt better (or less costly) than others?

 

The 2019 Hawaii Legislature adjourns on May 2. Please think about these issues and how they may affect you, everyone around you, and future generations. Whether you have concerns or feel strongly about an issue, speak up, talk about it, and be part of the discussion!

Advertisements

2019 Hawaii Legislative Watch: Reports

March 19, 2019

For the past few years, I’ve read through the bill summaries to find out about the bills being proposed that affect our money, education, and rights. I relied on these summaries to accurately reflect the legislators’ intentions, and I highlighted the bills that I thought needed the most consideration and debate.

This year, I decided to do something different. Instead of skimming through 1,597 House bills and 1,545 Senate bills introduced this year, I thought I’d focus on what government accomplished last year.

During the 2019 Hawaii Legislative session, there are 430 Reports to the Legislature. Here are five of the annual reports that I think deserve careful attention:

Taxes: Department of Taxation (DOTAX) Annual Report

Total State tax collections in FY 2018 were $7.90 billion, a 7.6% increase from FY 2017, which were $7.34 billion. Revenue from the General Excise Tax (GET), accounting for 43% of the State’s total tax collections, increased 4.9% to $3.40 billion in FY 2018 from $3.24 billion in FY 2017. Revenue from Hawaii’s Individual Income Tax (IIT), Hawaii’s second largest tax, accounting for 31% of the State’s total tax collections, increased 11.0% to $2.43 billion in FY 2018 from $2.19 billion in FY 2017. Revenue from the Transient Accommodations Tax (TAT), which increased from 9.25% to 102.5% starting January 1, 2018, increased 9.2% to $554.9 million in FY 2018 from $504.8 million in FY 2017.

Housing: Hawaii Public Housing Authority (HPHA) Annual Report

The Hawaii Public Housing Authority (HPHA) portfolio consists of 6,270 units across 85 properties. Combined, Federal and State housing sheltered 5,193 individuals and families, with average rents of $310 to $387 for families and $251 to $303 for elderly. “Low Income” families earn 80% of area median income (AMI) or less, which is $93,280 for a family of four in the Honolulu metropolitan area. “Extremely low income” families earn 30% AMI or less, which is $34,980 for a family of four in the Honolulu metropolitan area.

Kupuna: Executive Office on Aging (EOA) Annual Report

With funding of $19,269,823, State and Federal services assisted an estimated 7,129 older adults. The Office served 175 elderly with 7,366 one-way trips of assisted transportation, 969 elderly with 46,847 hours of personal care, 285 elderly with 81,499 hours of adult day care, 3,288 elderly with 386,089 home delivered meals, and 268 caregivers with 32,062 hours of respite care for elderly family members.

Native Hawaiians: Office of Hawaiian Affairs (OHA) Annual Report

In FY 2018, OHA generated $60.5 million in total revenue and expended $39.7 million for the Board of Trustees, Support Services, and Beneficiary Advocacy, with total assets of $427.8 million. OHA awarded $8.75 million in grants and $318,040 in sponsorships.

One of the DOT’s goals is to “Increase Voluntary Compliance” by a. Increasing oversight utilizing various branches/areas of our Compliance Division and b. Developing procedures to ensure a more efficient and timely audit process.” They really should add a third strategy, “c. Simplifying the tax code and tax forms.”

Honolulu Rail Transit: Honolulu Authority for Rapid Transportation (HART) Annual Report

HART currently estimates to the cost of Honolulu rail transit at $8.165 billion (excluding finance costs), with December 2025 as the target date for the start of full revenue operations. An interim opening from Kualaka‘i at East Kapolei Station to Hālawa at Aloha Stadium Station is planned for December 2020. As of October 2018, $3.349 billion has been spent on the project, which is approximately 46.8% complete.

The 2019 Hawaii Legislature adjourns on May 2. Please think about these issues and how they may affect you, everyone around you, and future generations. Whether you have concerns or feel strongly about an issue, speak up, talk about it, and be part of the discussion.

Climate change, home, and mental health

March 12, 2019

I’ve been thinking about home recently. The land I grew up on is still there, but the home is gone, replaced by a house that overwhelms the land. Though I didn’t live there anymore, it still makes me feel a sense of loss whenever I’m in the neighborhood.

And how much stronger would that sense of loss be if the land were gone?

The 2018 “Sea Level Rise and Climate Change” Final White Paper, prepared by the University of Hawai‘i Sea Grant College Program, is an alarming summary of the effects of climate change on Hawaii’s environment, communities, and overall well-being.

There are environmental impacts, like more frequent heat waves, worsening air and water quality, rising sea levels, changes in rainfall patterns, changing ecosystems, and more frequent weather effects.

There are corresponding health impacts, like increased respiratory illness, heatstroke, and cardiovascular and kidney disease. And climate change impacts us as neighborhoods and communities, like our ability to travel within and without the islands and our access to food and freshwater.

Beyond the environment and our physical survival, climate change affects our mental health.

How can we thrive with the threat of displacement, the threat of losing our homes and our connection to the ‘aina? How can we address mental health concerns in our disaster planning and community resilience efforts?

In 2018, 700 homes on Hawaii Island were destroyed during the Kilauea eruption, and over 2,000 people had registered to receive aid from the Federal Emergency Management Agency (FEMA), according to Pacific Business News (7/9/18).

Also in 2018, more than 100 people lost their lives, and over 17,000 homes were destroyed by California wildfires, according to the California Department of Forestry and Fire Protection, reported The Weather Channel (3/11/19).

As small Pacific island nations become inhabitable due to sea level rise, lack of fresh water, or other factors, an increasing number of climate change migrants may come to Hawaii because it is similar to the home they left behind. How can we help them thrive in Hawaii? What can we learn from their experiences with the loss of place and loss of their connection to the past?

I’m feeling a little nostalgic about my childhood home. What are your thoughts about maintaining or regaining mental well-being in the face of losing a home?

How connected do you feel to your home? Do you live in a flood or tsunami zone? Are you prepared for a sudden disaster or a slow rise in sea level?

Should governments operate more like nonprofits?

March 5, 2019

Last year, my then 11-year old son and I were watching a TV news story about a fundraiser for a girl with cancer at a Hawaii elementary school. He burst out, “Why don’t they do a fundraiser for rail?”

 

He suggested that government could find kids who would ride rail and tell their stories, like a girl who can’t get to school without rail.

 

“Sometimes kids have better ideas than government,” he said seriously.

 

I didn’t have the HART to tell him that when governments engage in fundraising, it’s called “taxation.”

 

And then I thought: why can’t governments hold fundraisers?

 

Governments are often admonished to act more like businesses, by providing better products (government services), good customer service, and lower prices (to avoid raising taxes).

 

Maybe governments should try to operate more like nonprofit organizations.

 

Nonprofits are usually recognized for their passion for a cause, their commitment to service, and their shoe-string budgets. They don’t have any taxing power, so they rely on donations, volunteers, and in-kind gifts.

 

Instead of raising taxes for everyone, maybe state and city governments could hold annual fundraising campaigns. The people and organizations could donate money to support specific departments or initiatives.

 

Government-nonprofit operations are proven to work; consider the annual school carnivals and Friends of the Library of Hawaii. Schools and libraries are government organizations that really do operate like nonprofits, and are supported by nonprofit fundraising.

 

And possibly the biggest effect on taxpayers: receiving thank you letters instead of tax bills.

 

At the time, I told my son to write a letter to the newspaper outlining his idea and offered to send it in for him. He wasn’t interested, and went back to his homework. But I wanted to share his idea with you.

 

What would motivate you to donate money to government?

“Start With Why” by Simon Sinek

March 2, 2019

Many companies are doing business backwards, challenges leadership and organization consultant Simon Sinek. They’re telling us WHAT they do – what the product does, what services are available, what’s new – but what’s really important is WHY they are doing what they do.

And many leaders are leading companies backwards, too – stressing WHAT companies do best, instead of WHY employees should work there.

“Start With Why: How Great Leaders Inspire Everyone to Take Action” (2009) reveals how we can be great leaders both personally and as businesses. The central idea is that great leaders and great companies are able to inspire people who want to take action – whether it’s buying a product or working for a company.

Great leaders give people a sense of purpose or belonging, understanding the value in the things we cannot see.

Articulating WHY. “People don’t buy WHAT you do, they buy WHY you do it.” If we start with WHY, we will understand how to do business and what to do. Sinek discusses how businesses manipulate our buying behavior, but these tactics are only effective for individual transactions; they do not create brand loyalty. “Repeat business is when people do business with you multiple times. Loyalty is when people are willing to turn down a better product or a better price to continue doing business with you,” Sinek clarifies. And to create brand loyalty, you need to communicate why you’re in business.

Sinek offers some examples of WHY. Apple empowers the individual spirit. Disney promotes good, clean family fun. Martin Luther King Jr. believed in equality and how we treat people.

Hiring for WHY. “Great companies don’t hire skilled people and motivate them, they hire already motivated people and inspire them.” Sinek voices something we don’t usually put into words: We want to do business with people who believe what we believe. “We are drawn to leaders and organizations that are good at communicating what they believe.”

Staying true to WHY. “The single greatest challenge any organization will face is… success.” It’s easy to lose focus of WHY and start focusing on WHAT. We need to measure success in a way that is true to our WHY, not just products sold or contracts signed. For example, Christina Harbridge founded collection agency Bridgeport Financial based on treating people with compassion, and bonuses are given based not on collections, but on how many “thank you” cards agents send to clients.

Trust matters. When we trust the culture or organization, we are willing to take risks to advance the culture or organization as a whole.  Clarity of purpose makes people take action for themselves. “With a WHY clearly stated in an organization, anyone within the organization can make a decision as clearly and as accurately as the founder.”

The importance of WHY we do things and finding our purpose resonates with me. I want to do work that is meaningful and work with people who believe in the same values. And I want to invite others to share in that purpose.

What is your WHY at work? Does your company’s purpose inspire you to take action? What is your WHY in life?