2022 Legislature still addicted to spending but deserves some praise
Especially praiseworthy was the passage of a bill that will limit the state’s emergency powers, if the governor lets it become law
from Grassroot Institute of Hawaii May 19, 2022
The Grassroot Institute of Hawaii presented its views on the 2022 Legislature this week to audiences on Oahu, Maui and Hawaii island, and the message was simple: The Legislature did a few good things, but the institute does not agree with all the other legislative wrap-ups we’ve seen that the just-concluded session was great.
Said Institute President Keli’i Akina: “Other wrap-ups are generally saying, ‘The Legislature did a great job this year. And mainly, the No. 1 reason they did a great job is they spent more money. They committed themselves to more programs. They made more promises of financial support for different things.'”
Akina said some of the reasons for that spending might have been “wonderful and good,” but that is little consolation, considering the long-term implications.
“My predecessor and our wonderful founder at the Grassroot Institute, Dick Rowland, … was fond of saying, ‘The bigger the government gets, the smaller the individual gets.’ And our government just got bigger during this past legislative session, I’ll have you know.”
In addition to Akina, institute staffers at the event included Malia Blom Hill, policy director; Ted Kefalas, director of strategic campaigns; and Joe Kent, executive vice president.
Kent spoke mostly about the state budget and why Hawaii’s lawmakers had such a big surplus — $4 billion — to work with. He lamented that the Legislature didn’t use more of the surplus to pay down the state’s enormous debt, but was pleased it increased the taxpayer rebate from Gov. David Ige’s mere $100 each to up to $300 each. The institute had proposed at least $1,300 each.
He noted the Legislature has “increased taxes every single year for the past two decades, and so we’re taxed to the hilt.” He said he would have like to have seen some tax cuts, but, to the Legislature’s credit, at least all of the session’s worst tax proposals were defeated.
Kent also summarized how the state dropped the ball in updating its laws to accommodate the worldwide cryptocurrency market — though, again, he was pleased that the worst bills on the matter were defeated, thanks in part to expert testimony from the institute.
Probably the best thing the Legislature did was to approve a bill that would reform the state’s emergency powers law. Hill, who last year wrote the institute’s “Lockdowns Versus Liberty” report, said, “What we wanted to do was find a solution that guaranteed our liberties and restored the balance of powers. … What we ended up with was SB3089 — not ideal, not everything we wanted. … We would’ve liked to see some stronger elements. But in the end, the bill … did pass, and I guess this is one of those wonderful positions of actually praising the Legislature. It was a very important piece of legislation, and it did actually get all the way through, and we pushed for it the whole way through.”
Now if only the governor will sign the bill or otherwise allow it to become law.
Other topics covered at the event included the prospect of Hawaii being socked with a higher state minimum wage, the advance of housing reform as represented by the so-called “Yes In My Back Yard” bill, and the shameful action of the Legislature to approve $60 million in funding the Hawaii Tourism Authority through the practice of “gut and replace,” which only last November was deemed unconstitutional by the Hawaii Supreme Court.
Said Kefalas about the HTA bill: “It’s something that didn’t even resemble the original bill, and something we’re very disappointed that legislators would push the limits on gut-and-replace that far.”
For more institute insights regarding the “the good, the bad and the ugly” at the 2022 Hawaii Legislature — and to learn more about what the institute did to help shape the outcome — click on the video above. A full transcript is provided.
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5-16-22 Grassroot Institute of Hawaii’s “2022 Legislative Wrap-up Session”
Kevin Takamori: My name is Kevin Takamori. I’m the director of development at Grassroot Institute. It’s wonderful to see you all. We’re honored and grateful that you’ve joined us today.
As many of you know, we’re a nonprofit policy research organization, whose mission is to educate people about the values of individual liberty, economic freedom and accountable government in Hawaii.
Thank you. In the spirit of “E nana kākou,” we strive to bring Hawaii’s people together to work for a better economy, better governance and a better society.
We’ve just celebrated our 20th anniversary with a wonderful sold-out gala this past March and we’re continuing to work diligently to become the most influential voice in public policy in Hawaii.
I’d like to take this time at the moment to introduce some of our board members in the audience. We have our board chair, Ms. Robin Stueber. We have Fred Noa. We have Mr. Mark Monoscalco. As well as Mr. Ed Kemp.
Thank you so much for all you do.
Today’s event will be moderated by Dr. Keli’i Akina, the president and CEO of Grassroot Institute. Our senior policy staff will serve as our panelists. We’ll have Malia Blom Hill, our policy director and Washington, D.C., correspondent; Ted Kefalas, our director of strategic campaigns; and also Joe Kent, our executive vice president at Grassroot Institute. …
At this time, it is my pleasure to introduce Dr. Keli’i Akina, who many of you will recognize as a great scholar, a public policy spokesperson and a community leader in Hawaii. As you know, he is also a trustee at large of the Office of Hawaiian Affairs, but he is here today in his capacity as the president and CEO of the Grassroot Institute of Hawaii. Please join me in giving him a warm welcome to Dr. Keli’i Akina.
Akina: Kevin, thanks for that warm welcome, and aloha, everyone.
Akina: So great to see you. I just can’t tell you how wonderful it is to be back at our first live in-person event. Just give yourselves a hand for being here. It’s just great. Thank you so much.
As I look at your faces, I recognize many friends of the Grassroot Institute, many supporters and some new friends, and I want to thank you for standing with us and all that we do.
Well, we’re in the season of wrapping up the Legislature, evaluating it, and there are other wrap-ups that have taken place. Some of them you’ve seen in the news. Civil Beat has put out its positions, the Honolulu Star-Advertiser has, and many organizations.
So you might want to ask the question: What’s different about today? Why be here? I’ll tell you why. You’re going to get a perspective that you won’t get elsewhere.
Other wrap-ups are generally saying, “The Legislature did a great job this year. And mainly, the No. 1 reason they did a great job is they spent more money. They committed themselves to more programs. They made more promises of financial support for different things.”
Indeed, many of them are wonderful and good, but we’re talking about saying, “The Legislature did a great job because it spent more money than it has in the past.”
Now, I don’t know if you think there’s something logically inconsistent about that view. My predecessor and our wonderful founder at the Grassroot Institute, Dick Rowland, who many of you know, was fond of saying, “The bigger the government gets, the smaller the individual gets.” And our government just got bigger during this past legislative session, I’ll have you know.
But the other thing has to do with budgeting, and some of my colleagues today are going to talk a bit about that. It’s a fact that the government spent money this session that it doesn’t really have.
One of the things that I love about what Dick Rowland said is a truth that rings throughout the centuries but is painful to hear, and that is: “The only money the government has to spend is the money it takes from you, the taxpayer.” So congratulations! You had a great legislative session because you are spending more money now.
Today, I’m so proud of the fact that I can introduce to you some of the senior staff of the Grassroot Institute. They’re going to give you their perspectives, and their perspectives come from being independent. We are proud of the fact that we take no clients. We represent no special-interest groups. We don’t line up on positions in advance.
Our board of directors does not tell us to go after one bill or another bill and so forth. Instead, they’re committed to the fiduciary duty of ensuring that the principles of Grassroot Institute are followed at the staff level.
In all we do, we are guided by these three principles: individual liberty; economic freedom, which is the defense of the free market; and limited accountable government.
I’m pleased to introduce to you today three of the brilliant people at the Grassroot Institute who make it possible for us to have an impact on society.
First, Joe Kent, at the far end of the table. He’s our executive vice president. He leads about 10 researchers and writers in our development of intellectual capital, original resources, research papers, commentary, and so forth. That’s what he superintends over.
I met him when he was a public school teacher, who became rather curious, then frustrated, about his life as a union member and a public employee.
He began to do things that were considered a little bit obnoxious, like producing documentaries such as “Why Housing Costs So Much on Maui,” or “What We Need to Do About a Law Called the Jones Act.”
I was so impressed with his work that I thought — along with Dick Rowland —that he would make a great leader in the Grassroot Institute. So we brought him on board.
So please welcome Joe Kent, our executive vice president. Do you have anything to say?
Kent: Well, I still remember when Dick Rowland called me up and said that he wants me to work for Grassroot Institute, and I said, “Yes, sir.” I quit my job and now here I am. And it’s the best decision ever, so thank you.
Akina: Glad you’re with us, Joe. Next to Joe, you’ll see Malia Blom Hill. Many of you have not had the privilege of meeting her in person, although her roots are here in Hawaii and she began here at the Grassroot Institute, following her graduation from law school and then the legislative work that she did for a while. But her heart was with the principles of the Grassroot Institute.
Although she has moved with her family to the mainland, she continues to work full time for us from the East Coast in the Washington, D.C., area, and represent us on our national issues, as well as participate through Zoom in virtually everything that we do locally here.
Malia is well known for her publications which she has produced with other think tanks, national think tanks, across the country. In fact, she is the author of a very important study that made a huge difference in our legislative session this year, which was based upon analyzing the lockdowns: “Lockdowns Versus Liberty.” Please welcome Malia Blom Hill. We’re so glad you’re here.
Malia Blom Hill: Hello, I just have to say I am so thrilled to be home. I am so happy to be here.
Akina: Great, and we want to hear you too, so pull your microphone in just a little bit closer. Great. Thank you, Malia, glad you’re here.
At the end of the table, we have Ted Kefalas. Ted has done a masterful job of leading our efforts to persuade the government leaders of Hawaii to follow the principles of individual liberty, free markets and limited accountable government.
Ted is our director of strategic campaigns and, as such, he leads our legislative efforts, our advocacy efforts, which involve hundreds of individuals directly petitioning the government, along with working with our marketing and communications people.
Ted has a background of having done lobbying in Washington, D.C, having worked in congressional settings, having been a lobbyist, most recently for Tesla Corp.
We’re delighted that he’s applying his skill and talent to helping Grassroot on your behalf to have a tremendous influence here in the state of Hawaii. Ted Kefalas.
Ted Kefalas: I’m very happy to be here after a crazy past five months with the legislative session. Thank you for having me, I’m looking forward to getting into all of this with you guys.
Akina: Our format is fairly simple. I’m going to have a dialog with our panelists today, ask them some questions that will run through bills that were passed and bills that were defeated.
The bills that were passed that we focused on are those that Grassroot Institute has influenced, the ones that are defeated are also victories in many ways. And you’re going to learn a lot about what happens behind the scenes.
We’ll start off with a bill that is very dear to us. You may not know its name. You may not know about the actual legislative trappings of this bill. But you do know this:
For the past two years, you’ve experienced the loss of your personal liberties. You’ve had to deal with the government that was often arbitrary in terms of the rules that it imposed upon the population. Sometimes not clearly communicating, sometimes so unclear that even the U.S. Surgeon General found himself falling afoul of the rules by stepping over the boundary.
Our point is not so much to complain about that, but to look at the serious nature. One of the problems during the past two years is that we could not actually keep track of what our government was doing because, with the emergency powers act, our governor also restricted access to public records, so that there was information that the media could not get. There was information that Grassroot Institute could not get. And at one point, the barriers were so high that we were told we could have this information if we could give them $100,000 and no guarantee of when we would receive it, and so forth.
I was thinking, I’d go around and pass the hat to all of you. But the thing is, as unjust and as illogical as these practices are, we chose a pathway that would go deep in terms of the cause, the root cause, of how a government can operate this way.
And that led to the production of our study on “Lockdowns Versus Liberty,” in which we pointed out what was really going on, and what has to change. And the defense is that we need to practice what the Constitution sets up, which is the balance of powers between the different branches of government, in order to make sure that one individual, a governor, does not have the power with which to declare a military state-type emergency, which is supposed to last only a few days, and extend that into two years without the ability of the Legislature, the voice of the people, to say no.
That formed the basis for our work at the Legislature on the emergency powers act. I want to ask Malia: You wrote this study, you helped us to analyze what the root cause of the problem was with the emergency actions of the governor, and then we went to the Legislature. Take it from here and tell us what your perspective is on all of this.
Hill: Of course. Well, as Keli’i mentioned, when we analyzed the problem of the governor’s emergencies and the fact that they just could be extended indefinitely, what we wanted to do was find a solution that guaranteed our liberties and restored the balance of powers moving forward, because litigation is always looking backwards. We wanted a change in the law that governs how the emergency powers work.
What we ended up with was SB3089 — not ideal, not everything we wanted, but it does embrace the principles, some of the basic principles we put out in the “Lockdowns Versus Liberty” report, in terms of giving the Legislature the ability to end a state of emergency by a vote. And that’s one of the most important elements of it, to put that check on the executive power.
It also puts some limits on the governor’s ability to stop the open-records law during an emergency. We offered amendments throughout. We would like to have seen a stronger defense of the balance of powers. We would’ve liked to see some stronger elements. But in the end, the bill that came out and did pass, and I guess this is one of those wonderful positions of actually praising the Legislature. It was a very important piece of legislation and it did actually get all the way through, and we pushed for it the whole way through.
We offered amendments to help protect constitutional liberties. We wanted to see a little more in terms of the governor having to ask permission. But in the end, what we have is a really important reform of the emergency-management statute.
Akina: Well, I congratulate you, Malia, on the work you did there and the whole team. And I want to ask Ted to chime in, if you would, and I know we’re in a public setting, so you can’t give all of the backroom deals that were made and so forth.
Akina: But you really led an effort that went behind the scenes in order to influence the Legislature to do something that will be lasting, with regard to this issue of the overreach of power of the governor.
Kefalas: Absolutely. We worked with [House] Speaker Saiki, [House] Minority Leader Okimoto, to make sure that we got this bill across the finish line this year. You know, I think it was actually a little surprising to have to lobby to give the Legislature more power. It was a little surprising that some legislators wanted to continue to allow the governor to keep doing this.
But we were able to turn to a lot of our supporters as well, and we sent in over 330 personal letters to legislators from our supporters using — we have a Take Action tab on our website; we’ll talk about that later on in the presentation, and how, if you guys haven’t used it yet, how you can get involved. But from what I had heard at the Capitol all the time is that a lot of these legislators were getting these letters and it was really making a difference, because they saw, from their constituents, that this was a really big deal to them.
Akina: Thank you very much. Now, Joe, in addition to helping your wife feed your baby when you stay up late at night, you also read through the budget reports of the state government and you have discovered many things in those late-night sessions of poring over the budget. One, you’ve discovered is that when the government says it has a surplus, it’s telling the truth — unless you look at the government’s debts.
It’s like saying, “Honey, we still have checks in the checkbook and money in the bank,” without looking at your mortgage, without looking at your long-term debt and so forth.
And that’s giving you a frame of reference with which to look at the legislation that was done this year with regard to the budget — the budget which was incredibly big for the Legislature — which gave them the ability to spend and spend and spend. But tell us what’s really going on over here, and why that may not be a great idea for the government, let alone for a household.
Kent: Well, that’s right. If you imagine your house and let’s say you have $100,000 of debt. But you get a windfall — surprise, surprise — of $4,000. And so you say, “Honey, we have an extra $4,000. Now, we can spend all this money on whatever.”
That’s kind of what’s going on in Hawaii right now. We have a $4 billion surplus. But we have $100 billion of debt.
And so, yes, when you compare year-to-year, the money is higher than it is normally. But really, they should either use that money to pay down the debt, or give some tax relief to taxpayers or just reduce taxes overall in general.
Because, let’s not forget, that they’ve increased taxes every single year for the past two decades. And so we’re taxed to the hilt, we have way too much money. It’s time to reduce that. So, we made a lot of those types of arguments that landed with some of the other bills that we’ll talk about too.
Akina: If either of the panelists to your right want to say anything, go ahead.
Kefalas: Well, I think we mentioned it earlier, but you have to take a look at the budget through a political perspective. And this year being an election year in which every seat is up for election, legislators really were concerned about what they could go home and sell to their districts.
So I think that’s why we see an inflated budget, and that’s why we see all of this excessive spending, so that these legislators can continue to get reelected. And let’s be honest, a lot of times, that’s their main concern.
Hill: Yes, that’s going to be a recurring theme for the day.
Akina: Absolutely. Yes, Joe. Go ahead.
Kent: Someone might be wondering why we have such a huge surplus this year. That’s because inflation is running really hot, and when inflation goes up, then the surplus goes up.
Plus we had a billion dollars from the feds for financial recovery funds. We took out a bunch of loans — about a billion dollars’ worth — and they’ve jacked up taxes so high that they’re getting all — and plus they’ve opened up the economy as well. All of that stuff means it’s a bonanza.
Akina: In addition to communicating behind the scenes with legislators and educating the public, we want to make sure that the media gets the message. So we hired away from the [Honolulu ] Star-Advertiser a wonderful cartoonist whose work many of you know, because we produce it every single week: David Swann. And this is how he would put what you just heard. Take a look at the far left on your side.
Two lawmakers are sitting on top of a pile called “Surplus,” and this is what one says to the other: “This surplus seems big if you don’t look at that pile,” which is the pile of debt. That point comes across pretty clearly.
Now, related to this, our governor in his State of the Union address said every voter, every resident of Hawaii, is going to get $100 in rebate under his term. Now, I hope you were rejoicing at the ability that you could pay off — I don’t know what you could pay off. I know what you could do. You could get two tanks of gas.
Member of the audience: One!
Akina: OK, all right, I don’t drive an SUV. One tank of gas. So, beyond the fact that it’s not really clear what the value to the individual would be of $100, we were also told that it would reboot the economy.
Now, if you were a little curious about that, we looked deeply into this, and I want to go back to Malia on this issue of taxpayer rebate because it is true, if you are going to have a surplus — which we question — but if you are, is $100 actually enough to do anything? But, Malia, what did we see about this?
Hill: The answer is no. We actually did support the idea of a rebate, and we testified for it, but we testified that it should be closer to $1,000, not $100.
You know, one of the things about this rebate, it’s been pitched as a stimulus, and that’s not what it is about. It is a constitutionally mandated return of a taxpayer surplus. Very, very different thing. And that’s one of the reasons why we were pushing for this return, refunding your money, rebate.
Anyway, we pushed for the $1,000 all the way through from the moment Ige announced it, all the way through the Legislature, the different bills that popped up. In the end, they did go up to about $300 in SB514, depending on what your income is. Then they gave themselves a big pat on the back for that. It did go through and it is awaiting Ige’s signature, which is, you know, call it a qualified win.
Kent: But that’s better, by the way, than what they did in 2008 when we had a surplus, a constitutional mandated surplus.
The Constitution says they have to give money back, but they don’t say exactly how much. So lawmakers in 2008 only gave $1 back per person. Then they said, “Look, we satisfied the Constitution.” So at least this year, they gave a little more than $1.
Akina: Now, our influence at the Legislature is not only felt when something we support passes, but, more often than not, when something we oppose fails. And this year, despite the fact that it is an election year, your legislators were so tone-deaf to the public, that they put forth an almost record number of tax proposals for increasing your taxes.
Now, we did something — and I really felt silly at the time — we did a scientific survey in which we paid a reputable third-party firm, so that the results would be regarded well by the media and by the government officials, and we surveyed the public on a number of issues, including whether they wanted to pay taxes. And I thought one question was just a waste of our time and money, and that was the question: Do you want to pay more taxes? Duh.
What is somebody going to say when you come to their door and ask them, “Do you want to pay more taxes?”
So we decided to put this into this survey and pay tens of thousands of dollars to find out, scientifically what the public thought about that.
And so we found out: Legislative district by legislative district, there were results like 75% of the people in the district said, “No,” when they’re asked, “Do you want to pay more taxes?” Brilliant.
Now, we went to the legislators and shared this information, and boy, did they perk up when they were told, “Do you mean a scientific survey tells us that in our district 75% of the residents don’t want to raise taxes? Gee, I better pay attention to that.”
Malia, tell us a little bit more about how we handled that issue.
Hill: Oh …
Akina: Or actually, you know what? Let me throw this one to Ted.
Akina: Ted, you were right there in the thick of it.
Kefalas: Yes, I think you mentioned it. Before the session started, I think we were expecting that this year was going to be a little light on tax increases. And boy, were we wrong.
You just keep seeing it, and you can see it on the screen. Capital gains tax. There’s a wealth asset tax. I won’t go through them all, just in the interest of time. But we were active in testifying on each and every one of these, we were meeting with legislators behind the scenes, and, you know, I think that they really heard a lot of our concerns, because they killed these bills before it even got too late in session. These were on the chopping block. They were some of the earliest bills that were gone. So we are very, very happy that they listened and were responsive to not raising taxes this year.
That being said, I’m sure we’ll be back at this again next year.
Akina: When you look at all of the research on minimum wage conducted in the United States and across the world, there is basically no evidence that the minimum wage helps the condition of low-wage earners. Yet that’s been the goal of minimum-wage legislation here: to help the poor, to help those who are working at the lowest level of income. And despite the overwhelming research, this was an issue again here in Hawaii this year.
Malia, what are your thoughts on what took place in terms of the minimum-wage increase law, which did pass, and what did we do to help educate legislators about that?
Hill: Yeah, you know, according to my notes here, we testified on about 40 bills and resolutions this year, and sometimes you don’t testify because you think you’re going to win. You testify because somebody has to, and that’s sort of the minimum-wage issue. We were one of the only major organizations —really the only major organization — that was out there putting this data in front of legislators.
In the end, it passed. The determination to raise the minimum wage to $18 an hour was strong, and Ted will tell you, it’s actually worse than that. But someone needs to get out there and make those arguments.
Somebody needs to give that data. Even if no one wants to listen, someone needs to be there with all the research saying, “This is what’s going to happen. You need to know this.” And so that’s what happened with the two minimum-wage bills.
Kefalas: You’re exactly right. Going into this session, I was told that minimum-wage increase was an inevitability and that we were barking up the wrong tree. What did we even think that we were doing?
But Malia really hit on it, that we were really the only organization that was out there consistently fighting against this increase, and something that we felt the state couldn’t afford, and then these businesses, these small businesses are still struggling from COVID, that this was not the answer.
And so while the minimum-wage bill did pass, we were able to see it delayed a little bit and pushed it back until 2028, I believe. So it was a little bit better than it was originally proposed, but still, at the end of the day, I think we were disappointed in the Legislature on this one.
Akina: We’ll continue talking about minimum wage, because really, what’s at the heart of it is how to understand basic economics. That’s what it is. This is not an ideological issue. The data is there, and we already know from numerous examples across the country and the world, that when you raise the requirement of small businesses in terms of what they have to pay their entry-level people, they compensate by either firing people or reducing their wages or reducing their hours.
This is a trend, but unfortunately, we don’t have a legislative body that is actually looking at the data. We’re going to keep at it, however, and do as much education about this as we possibly can.
Another area where free market economics comes in has to do with whether the government is good at running businesses. How well does our government do businesses like the Department of Motor Vehicles? Somehow I think Google might be able to do a better job of that, and so forth.
Or if you want to move people all the way from Kapolei to Ala Moana Center, how good is the government at starting a business to create a solution to that? Absolutely terrible.
And when it comes to Hawaii’s No. 1 industry, the visitor industry, do you want this government that can’t run a small business to be trying to run the No. 1 industry in Hawaii: tourism? That was the job that they gave the Hawaii Tourism Authority.
Now, we don’t have anything against the poor folks at Hawaii Tourism Authority who have jobs there. We’re not trying to get them out of their jobs. We’re just saying this industry is so very important, we really need to let the principles of the free market work, in order to recreate and rebuild something that has suffered so much during the last couple of years.
So the Hawaii Tourism Authority funding was something that was really on our map. We took a unique position. We were present in the media quite frequently. Several of my articles were published with regard to that in newspapers throughout Hawaii. Our other staff were published as well.
Ted led the charge in dealing with an issue that, unfortunately, shows the difference between government control over business, rather than government letting business do what it should do. Ted, tell us about this.
Kefalas: You’re exactly right. And I think our biggest thing with the Hawaii Tourism Authority was that taxpayers shouldn’t be funding to advertise Hawaii as a tourist destination. I think that those industries can do that themselves. If you go on the street on the mainland, people already know about Hawaii. So I don’t know how much advertising we really have to do.
The main thing with the HTA came down to the funding difference, it was between the Senate and the House.
The Senate really wanted to micromanage the HTA and determine what their budget was going to be, and how they would be able to use it, whereas the House wanted to let them be more in control.
Well, because of this disagreement, we really thought that the HTA was going to become defunded. And up until the last minute, we were pretty convinced that it was. But sure enough, it rose from the dead and legislators almost used a — it seemed like a gut-and-replace — which has obviously been struck down from the courts.
So this bill was something that was originally a capital improvements project. Really it resembled nothing of the original bill. It was something that was carried over from 2022. It was a 110-page bill. And this year, it’s down to five pages. So, like I said, it’s something that didn’t even resemble the original bill, and something we’re very disappointed that legislators would push the limits on gut-and-replace that far.
Akina: That’s right. And Ted, you know, I want to bring Malia in on this a bit because we’ve analyzed this from a legal point of view. Indeed, we were celebrating just a few months ago, the defeat of gut-and-replace by the Hawaii Supreme Court. And with your support, we were part of the group that was able to bring that about.
But we’re looking at how far the government is willing to push the limits of what the court came up with. What did you see, Malia?
Hill: As soon as that decision came down, pretty much all the government watchdog groups were really happy, and then ready for exactly this, which was, knowing that they weren’t going to give up gut-and-replace.
So what we had with the HTA funding, and it really was the HTA funding, it was the worst example of it, were multiple situations where they really — as far as I’m concerned, as far as we’re concerned, I would say, it’s gut-and-replace. If there’s no resemblance between the bill that comes out of conference committee and the bill that went into conference committee, that’s pretty definitively a gut-and-replace, and that’s really what happened here.
I think an important lesson to be taken is that it’s going to keep happening. They’re going to keep trying to push this boundary. They’ve developed this sort of dependency. You can see: It’s almost like they got to the end, realized they needed to do something about HTA, and just reached into the old bag of tricks and pulled this one out. “We’ll give this a shot. Who’s really going to sue on this specific one?”
I think moving forward, clean-government groups are going to have to really be watching carefully to see whether they’re just going to keep trying to reopen the gut-and-replace mechanism.
Akina: Very good. It was really something to see behind the scenes what was going on. This was really an 11th-hour, 59th-minute game that was pulled by our government. And we really have to keep watching. That’s so very important.
I’ve got a couple more issues I want to bring up with the panel today. I want to encourage you to ask some questions when we open up to question and answer. We’ll have a microphone available. We’ll appreciate it if you’ll come up to the microphone. Keep your questions short and concise, but we’ll be glad to respond to them.
Going back to Ted. Ted, people know that the cost of living in Hawaii is exorbitant. And the major factor of the cost of living, the No. 1 reason people say they’re leaving Hawaii, is the cost of housing.
The idea that there’s a shortage of land for housing is simply a myth. It’s an artificial, contrived shortage. We’ve already published the fact that here in Hawaii, we develop on only 5% of the landmass; 95% of all the land is not developed.
But if you take just the 5% we develop on, we have such stiff zoning and land-use regulatory rules, that you can’t do something that might make a lot of common sense, like add a room or add another unit or any number of things that are done in places like Houston and across the country, that allow the cost of housing to come down tremendously.
But this session, we’re very happy about something nicknamed Yes in My Backyard — or at least we have some measure of happiness.
Kefalas: Yeah, absolutely. We’re really starting to see the so-called progressives that are starting to understand that the housing issue is really a supply issue.
And so this bill it creates a working group to study and propose some legislation that would help reduce zoning and remove a lot of the government barriers to developing housing.
It’s not perfect, as we’ve seen with a lot of these bills, but this is a crucial first step for us to take that leap, and be able to remove a lot of the red tape for new developments.
It’s something that we’ve been calling for for a really long time. So we were very happy to work with Rep. Hashimoto on this bill and we’re very glad that it’s now sitting on Gov. Ige’s desk waiting for him to sign it.
Akina: Very good. Congratulations. That’s a great win.
We had a lot of fun this last session with a new issue for our Hawaii Legislature, and that is, “What do we do to come into the 21st century in terms of technology and finance?”
In other words, what about Bitcoin? What about cryptocurrency? What about blockchain, and so forth? Suffice it to say, we are not leading the nation in terms of advances that bring technology and finance together.
However, we did have some breakthroughs in working with some legislators this year. Joe Kent, would you tell us a bit about that?
Kent: Sure. So Hawaii always says, “We need to diversify our economy. We need new industries to come in.” Then when a new industry pops its head up, then lawmakers whack it and play whack-a-mole.
That’s kind of what’s been happening with the cryptocurrency issue. Hawaii is last in the nation when it comes to cryptocurrency regulations. We have so much red tape that all the companies left for a couple of years, and then they had to create a little sandbox to let a few companies operate.
This little cartoon encapsulates it pretty well. One lawmaker is holding a Bitcoin and says, “I don’t know what it is, but it needs my expert oversight.”
And that’s how most lawmakers, I think, don’t know what cryptocurrency or Bitcoin is, but they want the regulatory power over it.
There was a bill this year that would have made Hawaii’s cryptocurrency regulations a little better, but we would still be last in the nation. And in some ways, it might be worse actually. The bill was an 88-page tome of a bill that would have had violations over privacy and property rights and was just too much regulation, so we had to oppose it.
Thankfully, they killed the bill. They listened to us really well on this and they killed the bill. But — oops — they forgot to find a way to legalize cryptocurrency in the state.
So now, it’s still in this murky position. Technically, on July 1, the cryptocurrency sandbox that they created will expire unless they do something administrative. In other words, they could just administratively allow it somehow. So that’s what we’re advocating at the moment.
Akina: Very good. Well, keep up the good work on that. That’s important.
Now, before I ask Ted to comment on what to expect in the remainder of the days before the governor has signed or vetoed bills, I want to invite you to ask your questions. I believe we have a microphone available through Sean. If you’d come up over here to this corner next to me, he’ll offer it to you. We want to include you in the broadcast which is being recorded from the back over there. So speak clearly in the microphone and come and line up.
Fantastic. I’ve got someone here. Anyone else joining Annie? Fantastic. Professor Ken Schoolland.
Ted, before we go to the Q&A session, tell us a little bit about what to expect now that the legislative session has cross sine die, its final day. The legislative game isn’t over yet.
Kefalas: Exactly, exactly. As we mentioned, a lot of these bills are currently sitting on Gov. Ige’s desk. The governor has until July 12th to either sign or veto any of those bills. If he doesn’t sign or veto any of the bills, they actually will still become law after that July 12th deadline.
So it’s really important that we’re really encouraging a lot of our supporters to write into the governor. If you have a particular issue that you want him to sign or veto, it’s really crucial that you let him know.
If you go on our website, here you’ll see it’s grassrootinstitute.org/action. And if you go to that website, it’ll take you to a page that actually looks like this.
At the top of the page, you can see, just click on that button that says, [“Encourage Gov. Ige to sign or veto a bill,”] and you’ll have an opportunity to write an email directly to him. You can submit it and it will, like I said, go directly to his inbox and hopefully let him know how you feel about a certain issue, whether that’s wanting him to sign or veto a bill.
Akina: One of the things I really appreciate, Ted, about the way you’ve set up the Voter Voice program, is that it’s not sending out form letters. There are individualized paragraphs and customized language, that through some kind of artificial intelligence we put together, for people to be able to send a unique personal message. Tell us a bit about how those had been received by government officials.
Kefalas: Sure. As Dr. Akina had mentioned, I’ve worked in congressional offices previously, so I’ve seen what happens with a form letter. They essentially get thrown in the trash and nobody ever hears from them again.
So what we wanted to do at Grassroot Institute is create some sort of program that individualizes the letter for people, and allows it so that when a legislator gets it, it feels like an authentic letter that somebody has written that is different from the other person.
I’ve talked with a few legislators that they’ve been getting 15 to 20 letters from our supporters, and they’ve kind of figured it out. But at the same time, they’ve said to me, “How are you guys doing this? I mean, every single one is different.” So it really makes a difference to them to show that this is how their constituents feel.
Like we mentioned before and throughout the program, legislators really care about getting re-elected. So if we can show them that a constituent and a voter feels a certain way, we can really sway their opinions.
Akina: Thank you. And Ted, we have really put a lot of effort — the team, I mean — in relating to communicating with lawmakers, and so forth. And in some ways, I believe, this has shifted our perception by lawmakers. What do you say about that?
Kefalas: Absolutely. I think a lot of lawmakers have been welcoming us with open arms. They’ve been willing to sit down and listen, hear our concerns. I think, like I mentioned, the Take Action page on our website has really made a big impact because they understand that it’s not just Grassroot Institute. We’re not just this organization that’s doing it by ourselves. That we have a core of support — you guys that are behind us, that are showing them that these issues matter to people.
So it’s been a great reception that we’ve gotten this session, and we’re excited to keep moving in the future and see what kind of great progress we can make here in the state.
Akina: Well, thank you. Would you give our panel of experts a big hand? Great job, great job.
Now, they’re all yours for questions and answers. We’ll start with Annie. If you introduce yourself to the audience here, look at the camera in the back over there, tell who you are, and very briefly, give us your question.
Annie Burns: Hi, I’m Annie Burns. So I have three questions and you can answer one or all three. I’ll just say them real quickly. One is: How realistic do you think restructuring the tax system here would be? Let’s see, one of the candidates wants to mention that they’d like to see the whole thing restructured. How realistic?
The second one is: What do you think about a proposal to limit or ban foreign ownership of land in Hawaii? People talk about that.
And then the last one, with regards to housing: Why would the state secure and fund homeowners insurance for those building on an active volcano, yet not let homes be built on other land that’s more viable in the first place?
Akina: Very good. Let me hand it off to anyone who’d like that. I’ll start simply by mentioning the volcano issue was something that we very much were involved in, trying to raise the question of why the government is in a business it shouldn’t be in.
And the answer is very simple. When the government gets involved in business, it picks winners and losers in industries, and it gives subsidies to, and tax breaks, and other privileges to the business that it’s interested in supporting.
And that’s usually because that business is paying to play. And that’s what goes on. They influence the government through campaign contributions. They influence the government through their lobbyists and so forth.
I’m going to let the team tackle the other questions, as well as add to that.
Kent: I’ll address the tax restructuring thing. A lot of people talk about restructuring the tax code. Hawaii has a general excise tax, which is very different from the mainland.
Some people say, “Oh, we should switch to more localized property taxes, funding the schools, etc.” Sometimes people say we need to have a road — a mileage — tax, and everything. But in my experience, every time they talk about restructuring, it ends up being increasing. Usually, restructuring means, “OK, you’re going to lower this tax and raise that tax,” but it ends up just being, “OK, let’s just raise that tax.”
Hill: Yes, a good example is the carbon tax this year, which was going to be a — they were going to give everyone a bunch of money to offset the carbon tax. But the idea that you could offset — what was it, like a 30-times increase? It was an enormous increase, a 3,000% increase, in the tax that would affect everything — and effectively, like Joe says, it’s just a tax increase.
Kent: It would be great if they could restructure and shift things around, but the reality is it just ends up being more, so we’re usually opposed to that.
Kefalas: Yes, absolutely. Then from the foreign buyers’ standpoint, we get that a lot. We hear that all the time that we should restrict foreign and mainland buyers. But, put simply, I think it’s unconstitutional to restrict home ownership to a U.S. citizen or a citizen from Hawaii. Especially with interstate commerce, you have to be able to allow somebody from California or Virginia to do business here.
Hill: Yeah, we’ve seen this — both the foreign and the, just, people from out of state — and I think it comes from this desire to find somebody else to blame, some outside reason why there’s a housing crisis. It has to be outside. It can’t be our own policies, so we’re going to pick on any of these other things that aren’t our own zoning regulation policies.
But, as Ted pointed out, we’ve seen some figures. Joe, you might know what it is off the top, but the number of foreign buyers of residential property is actually very small, dwarfed by Californians, for example.
Kent: I think it’s less than 20% foreign buyers. Jensen has that information.
Akina: We’re producing some studies on this, and so forth. There’s a misconception, by the way. Most people believe that the purchase of condominiums in Kakaako and other places is by foreign parties or out-of-state parties.
The fact is, if you were to talk with Hughes Development, Kamehameha Schools, Stanford Carr and the other lead developers, they will tell you that the majority of purchases are locals. Those locals are not the wealthy landowners and so forth. They’re people like your auntie or uncle who bought a home in Pearl City 45 years ago, who kept that home, and are now millionaires, of course, who want to help their son and daughter out to get started by putting down the down payment for an apartment. That’s why research is so very important.
Not to let the cat out of the bag — as we go forward, we have prioritized housing solutions as the lead research area for us going into the next legislative session.
Ken Schoolland, my dear friend, professor at Hawaii Pacific University. Good to see you here.
Ken Schoolland: Thank you. Two short questions. One, I’d like to hear something more about that “Lockdown Versus Liberty” conclusion, what they find.
And this other thing about Gov. Ige’s emergency orders. It seems to me that originally it was written that you had a 60-day emergency order, because that gave the Legislature enough time to say, “OK, we continue it or not.” But he just keeps extending it and they didn’t address that at all in this.
In other words, now it sounds like the Legislature has to have a two-thirds vote to stop the emergency action. But whatever happened to the idea that they had to extend the emergency action?
Hill: Those are both good questions. To deal with the 60-day limit first, the statute is silent on what happens after 60 days, and that is the essence of all the questions and the dispute.
In fairness, I think even the governor knew that this was a bit of a sticky issue because he had bills in this year that would have addressed the ability to extend an emergency after 60 days. So this bill does deal with that, because that silence in the statute about whether you can extend or not was a problem, and it does clarify that it can.
The tricky part is the ability to end an emergency, which did make it into the final version and which the Legislature can do by a two-thirds vote. We had wanted, and we offered amendments that would have required the governor to get permission from the Legislature in order to extend an emergency. Unfortunately, those did not go through.
But previously, the statute had no mechanism to end an emergency at all, except for the end of 60 days, which didn’t, as we all know. Whatever the law may say, we know what happened and that it doesn’t; it was not effective in ending an emergency. So this puts a very definitive way to put an end to an emergency into the law.
Kefalas: Just to piggyback on that, I’ll say the significance of that two-thirds number, it’s very similar to the Legislature, if the governor vetoes a bill, the Legislature needs a two-thirds vote to override the governor’s veto. So a lot of legislators saw this as almost similar to that aspect of overriding a veto and overriding the governor’s emergency powers. So they were adamant on sticking to that two-thirds number.
Like Malia mentioned, we would’ve liked to see some sort of legislative approval beforehand. But at the end, we were just glad to have gotten this across the finish line because, if you’ll remember, I think it was HB103 in the last session, got right up to the end, we thought it was going to pass, and then nothing. Silence from the Legislature. So, like we said, we were just glad that this was a first step in checking his powers.
Hill: Yeah, in the report, our wish list of things that we would’ve liked to see was permission to extend an emergency, an expedited appeal process to the courts, a stronger statement on constitutional rights, and a rational-basis inquiry into executive orders that infringed upon our constitutional rights.
Now, those did actually make it in, to a certain degree, because the final version of the bill that did pass does require justification for suspension of laws, which is very close to what we wanted. Goodness, I hope this doesn’t get tested, but were it to be tested, that would be a place where a court might look at the executive order that suspended a law and take it, look at it, without giving so much deference to the governor.
Akina: Very good. Anyone have a quick response to Ken’s first question?
Hill: Yes. That was the main thrust of “Lockdowns Versus Liberty,” aside from that wishlist I just mentioned, was that we had this problem, these continual lockdowns that infringed upon liberty. And the question was, what are you going to do about it?
Everyone immediately goes to litigation as their answer. Well, our rights are infringed, we should go to litigation. Litigation is slow, and it is reactive. You could talk to litigators who are trying the COVID cases. They expect to be trying COVID cases for years to come.
Our concern was, how do we guarantee that this doesn’t happen without rolling the dice on litigation in what is, honestly, not the greatest set of courts for it. And this is why we came up with the legislative solution that we’ve been pushing forward.
Akina: Very good. We’ve got a couple minutes left. Couple of people to ask some quick questions at this time. Rob, do you want to introduce yourself?
Rob Burns: Rob Burns, running for Lieutenant Governor. First of all, I wanted to thank all these guys, they have been accessible to us, for lots of different reasons, for us to use in our plate. Anyway, my question is, what does this group think about this 90-day vacation rental situation versus the 30-day?
Akina: Joe, you want to take that quickly?
Kent: Right. Bill 41 at the Council. Basically, it’s a blanket ban on short-term rentals on Oahu. You can do it for 60 days, but at that point, is it really a short-term rental? I mean, we’ve got tourists that come here from the mainland. Even 30 days, that could be considered staying for a long time. So who’s going to stay for three months?
I mean, guess it’s good that they were going to do it for six months. But this is going to have a huge impact on the economy. This is going to affect millions of tourists, hundreds of millions of dollars in our economy. And plus, it’s a huge property rights infringement as well. It’s the strictest short-term rental laws in the nation now, and we’ll have to deal with it unless we can change it.
Akina: Yes, there’s some real concerns about the outworkings of Bill 41. We can do an entire seminar on it, and we might, partly because a lot of the issues are being determined at the county level now, the closest level to government for people.
Anyone else? There you go. Go ahead.
Jessica: Hi, Aloha everybody. I’m Jessica, I’m a huge activist in the community and one of my biggest issues right now is trying to protect the children. And in doing so, I’m finding that we are so different from the mainland, considering all costs, on every single level, to get communication flow, to get transparency, to get accountability, everything.
So my question is right now, as a citizen of Hawaii: How can I do a better job in getting us spoken about even, or any type of communication level to get certain things into litigation? Maybe pair up with you guys and figure things out to protect these children as well as the community, and just limit, again, the governor’s power as a whole.
So if you guys can give me any insight on that, being grassroots myself, I would just greatly appreciate that.
Akina: Thank you. I’m going to ask Ted to respond to you in general, because we love it when citizens take their responsibility seriously.
Kefalas: Yeah, that’s absolutely true. And this whole presentation, we’ve talked about activating our supporters and trying to show legislators the power is really with the people. We have the Take Action tab on our website. Offline, I’d love to talk with you more and just try to figure out where our interests align and where we can work together, because like I mentioned, when we can band together and create a collaboration, I think we can really see some change done. Yes, I’ll give you my card afterwards.
Akina: Thank you, Ted. And we have one final quick question. Please, introduce yourself.
Pete Tingstrom: Yes, Aloha. My name is Pete Tingstrom. My question has to do with election integrity. Have you guys done any research on Act 136 and the effects of what that does to the people and the voting and individual rights to make sure their voices are heard?
Kent: I would like to learn more about that. I don’t know about that issue.
Akina: Most of our issues are highly focused on the Legislature and the county councils. There’s a lot more to do and that’s one of the reasons we need friends and supporters in order to increase our plate. If you’ve liked what you’ve seen today, I hope that you’ll stand with us. First of all, take advantage of the Grassroot Institute, use our research anytime you want.
Not only is our research available online at our website. You can call up any one of our team members and talk with them about something. We want to be here for you.
Secondly, we want to help you to reach your public officials through Voter Voice and other means. We also have a program in which individuals are actually able to write testimonies, various letters to the editor and so forth. This is the Grassroot ohana, it’s a private group, there are about 50 members that we support, carrying out very carefully targeted advocacy.
In addition to that, we would love to have you receive from us every week our newsletter with all of the information of the week, as well as our cartoon, and then on Friday or Saturday, my column that comes out every week.
To close this now, please welcome back our director of development, Kevin Takamori, and thank you, mahalo, for being with us. Give a hand to the panel. Tremendous. Joe Kent, Malia Hill, Ted Kefalas. Great job. Great job. Thank you very much.
Takamori: Thank you. Thank you so much, Keli’i. Thanks everybody once again for coming. Hope you found it stimulating and thoughtful and insightful. If there’s anything, as Keli’i mentioned, we can do for you, just feel free to reach out to us. We’re always at the office, five or six of us at a time. So please, reach out to us.
We’d love for you to become a participant in Grassroot Institute. So we have a little form up in the front, if you haven’t already filled it out. It’s a comment and information card where you can give us some feedback on what you thought of today’s presentation. So please, do fill this out for us.
And I’d just also like to remind you that next month, on June 17th Friday, we have another policy seminar. It’s going to be on barriers to affordable housing and development. It’s going to be led by developer Stanford Carr, as well as David Arakawa, who’s the executive director of the Land Use Research Foundation in Hawaii. So that should be a fantastic dialog right there. We encourage you to consider. It’s going to be at the Pacific Club on June 17th for lunch.
Once again, thank you all so much for coming. It’s great to see people in person again. We hope to continue this throughout the rest of the year and beyond. So thank you for all your support. Thank you to our panelists, Ted, Malia and Joe, and of course, Keli’i, our CEO. Mostly, all of you for coming and supporting us. We really appreciate this. Thank you.