What went down at the 2022 Hawaii Legislature

from Grassroot Institute of Hawaii, May 25, 2022

Radio host Johnny Miro devoted his half-hour Sunday morning show to exploring what the Legislature did and did not achieve this year

The state’s 2022 legislative session recently wrapped up, and what took place can be divided into the good, the bad and the ugly.

Speaking Sunday morning, May 22, with radio host Johnny Miro of the H. Hawaii Media radio network, Keli‘i Akina, president and CEO of the Grassroot Institute of Hawaii, said “good” things that emerged from the session included:

>> Approval of a bill that would allow the Legislature to terminate the governor’s emergency orders with a two-thirds vote, require that the suspension of any laws be justified and that all emergency orders be constitutional. It also would make it harder to suspend the state’s open-records law.

>> Approval of a taxpayer rebate, though for only up to $300, depending on a taxpayer’s income. The institute had pushed for about $1,300.

>> Approval of the “Yes in My Back Yard” bill that seeks to establish a working group to identify government barriers to housing in Hawaii.

>> The defeat of a raft of tax measures, including proposals to create or increase taxes on capital gains, personal income, personal assets such as the wealth tax, liquor, fuel and the so-called carbon tax.

The bad — or maybe even the ugly — included:

>> Approval of increasing the state minimum wage by nearly 80% over the next six years, to $18 an hour.

>> Failure to reform Hawaii’s cryptocurrency laws, which currently are the worst in the nation.

And finally, the ugly:

>> The Legislature approved $60 million in funding for the Hawaii Tourism Authority, which is problematic to begin with but was made worse by the fact that it required the unconstitutional practice of “gut and replace” to do so.

>> The Legislature spend hundreds of millions of dollars on new programs and projects, “so your government got bigger this year,” Akina said, “and that is not a good thing. It means that the bill gets higher every year to pay for the cost of government in the future, because government just doesn’t shrink.”

The H. Hawaii Media network encompasses six Oahu radio stations, located at 101.1 FM, 103.9 FM, 97.1 FM, 96.7 FM, 101.5 FM at 107.5 FM. To hear more about the good, the bad and the ugly of the 2022 legislative session, click on the image below.

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5-22-22 Keli‘i Akina interviewed by Johnny Miro of H. Hawaii Media radio network

Johnny Miro: Good Sunday morning to you. I’m Johnny Miro. It’s time for public access programming here in our six Oahu radio stations located at 101.1 FM, 103.9, FM 97.1 FM, 96.7 FM, 101.5 FM at 107.5 FM. 

And it’s been a long time, but it’s great to have Keli‘i  Akina from the Grassroot Institute of Hawaii. He’s the president and CEO, and you can find them at grassrootinstitute.org. That’s grassrootinstitute.org. The legislative session just wrapped up recently. We’re going to have a breakdown on that, the 2022 session. Keli‘i, good morning to you.

Keli‘i Akina: Well, Johnny, good morning to you and all your listeners across the Hawaiian Island. It’s great to be with you again.

Miro: All right. So the legislative session just wrapped up and they were happy about what the budget looked like at the end. But overall, what was the main theme at the Legislature this year, in your opinion?

Akina: Well, what a session! And the main theme was, of course, the political season. Everything legislators did this year was with an eye toward getting reelected. But lucky for them the state also had a huge cash windfall. The lawmakers spent more of this year than they ever did before. That’s incredible. I don’t know if that’s the best way to measure how well they did — that is, how much money they spent. Not necessarily a good thing. But remember, they’re spending your money as taxpayers.

Miro: What else did they focus on, in your opinion? What did the lawmakers focus on?

Akina: Well, one of the things lawmakers did was they took a good look at the governor’s emergency powers, especially coming off the pandemic now. The lockdowns are now lifted after two years, but many people in Hawaii were uncomfortable with the fact that our governor has unlimited and unchecked powers during an emergency. 

Last year, lawmakers tried to put a check on that power, but the bill died at the last second. This year, however, we at Grassroot urged them to hold the governor’s power in check. So they did pass SB3089. We’re really glad about that. That bill allows the Legislature to terminate the governor’s emergency orders with a two-thirds vote.

Miro: All right. Did that bill also require more transparency during an emergency?

Akina: Oh, absolutely. We’re thrilled about this. The bill does include provisions to preserve government records during an emergency. You see, currently, anything that happens during an emergency isn’t subject to the transparency laws. It just goes into a black hole. People, the media, groups like Grassroot Institute, just don’t have access to it. 

Now, this new bill says that lawmakers would have to give those records to the public after the emergency is terminated. The bill is passed unanimously by both Houses and the Senate, as well as the representatives.  So now it’s waiting for Gov. Ige’s signature. So this is a good thing.

Miro: All right. You mentioned that there was a windfall of cash this year to the state budget. Where did all that money come from?

Akina: Well, the state saw a $4 billion — and I say this in quotes — “surplus” this year, which is a record high amount of extra money, if you will. The money, of course, comes from taxpayers mostly, since taxes have been going up every year for the past decade. Also, inflation is very high and that inflates the prices for everything, but it also inflates tax revenues. And the state got over a billion dollars from the federal government in aid during the lockdowns. 

So, all of that meant it was a big bonanza this year. But actually, the truth is, it’s not really as big a bonanza as people may think.

Miro: Joining us this morning, Keli‘i Akina. He’s president and CEO of Grassroot Institute of Hawaii, grassrootinstitute.org for the information and all the great studies and works they do grassrootinstitute.org. 

Now what do you mean, you know, doesn’t the state have a record high surplus this year? That’s what we’re hearing, at least.

Akina: Well, yes, the record-high surplus we have this year, but we also have a record-high debt. Now put those two together, our surplus may be $4 billion, but our debts are $25 billion for public pension and health benefits, $13 billion for bonds and $4 billion for deferred maintenance. 

Now, think about your household. It would be like getting an extra $4,000 in your household budget, but ignoring the fact that you have $50,000 in debt. And that’s pretty much the situation with the state. If you only look at the cash flow in and out, but don’t look at the balance sheet, you’re going to look like you’re swimming in money. But we’re really not.

Miro: So what did they spend the money on?

Akina: Well, there were some good things for the people, and we’re not trying to diss that. We recognize that government is there to serve the people. But there were some things that may not have been so good. In their spending, some things that were pretty high were a billion dollars that went into housing, with $600 million going to the Department of Hawaiian Homelands to help clear off the waiting list and $300 million to government projects.

Then another billion went to pay down debt, such as the public pension and health benefits. And that’s actually a good thing. Hundreds of millions of dollars went into growing the size of government, so your government got bigger this year, folks, and that is not necessarily a good thing. It means that the bill gets higher every year to pay for the cost of government into the future. Because government just doesn’t shrink.

Another $300 million was set aside for Hawaii’s future white-elephant government boondoggle, which is the Aloha Stadium.

Now lawmakers will go back to their districts and tout that they spent more money than ever. In fact, if you paid attention to many of the legislative wrap-ups, they’re patting legislators on the back, saying, “It was a great session, because more money was spent than ever before.” 

But keep this in mind: It’s our money to begin with, and lawmakers are spending it, instead of us necessarily having anything to brag about.

Miro: Some people are going to say, wasn’t some of the money used for a taxpayer rebate?

Akina: Yes, that’s right. If you recall the governor’s State of the State address, he promised that every citizen or taxpayer was going to get a hundred dollars in rebate. Now, I don’t know if you had fantasies about what you do with your hundred dollars. I wonder how many people really get very far with that. But, you know, the truth is, that wasn’t a gift; it’s actually required by the Constitution. So it actually was not a very generous act altogether. 

Hawaii’s Constitution says that if the state budget surplus is too high, the state has to give back the money to taxpayers, or else pay down its pension debt, or put the money into a rainy day fund. But, you know, the Constitution doesn’t say exactly how much money to give back. 

That’s why, back in 2008 when we were in a similar situation, lawmakers gave back a ridiculous $1 per person, which did virtually nothing for the individual, and even little for the economy.

Now this year, at Grassroot Institute we wanted to make sure that they didn’t just give us $1 back. so We pushed for about $1,300. Easy to figure that out: That would be taking a billion dollars divided by the number of qualified taxpayers. If they gave back $1,300 per person, they would still have a record-high $3 million surplus left over. 

Well, lawmakers didn’t accept that. They finally settled for only $300 per person, which is better than nothing. But just remember, it’s not a gift. It’s required by the Constitution. It’s the money that is owned by the people in the first place and was taken from them.

Miro: I see. You mentioned qualified taxpayers. Does everyone get this rebate?

Akina: Well, it depends upon your income. The rebate is $300 for people who earn under $100,000, but only $100 for people who earn more than $100,000. Now rebates also apply to the dependents of taxpayers. That means a family of four could get $1,200. And that’s worth getting. The bill is passed unanimously by both the House and the Senate, and right now, it’s sitting on Governor Ige’s desk waiting for signature.

Miro: So what about tax hikes? Did lawmakers pass any more tax hikes?

Akina: No, they didn’t get to pass more tax hikes. The public reacted strongly, and we as Grassroot Institute stood up against the tax hikes. But there are many lawmakers who wanted to see the taxes go up. 

We saw proposals early in the session create or increase taxes on capital gains, personal income, personal assets such as the wealth tax, liquor, fuel, the so-called carbon tax and so forth.

Thankfully, reason prevailed as well as the fact that it’s an election year, and all of the worst tax hike proposals were killed. Maybe they realized that that’s really not a good thing to raise taxes during an election year. 

But also, we told them, they have more money than they’ve ever had in the history of the state. It makes no sense to raise taxes right now, especially when so many people are struggling after the lockdowns and trying to deal with inflation and Hawaii’s high cost of living. 

So a real high point of this legislative session is what the Legislature did not do. They did not raise your taxes.

Miro: All right, what about the minimum wage? We hear so much about that. Didn’t they increase that this year?

Akina: Well, yes, that’s what they would like to do. They approved legislation to increase the state minimum wage, or the amounts that employers can pay their employees, from $10.10 an hour to $18 an hour — not immediately, but by the year 2028. The bill is now before Gov. Ige, and we don’t know yet whether he will sign it. 

Now, the consensus is that he will. But we alerted him just this last week about brand-new research confirming, once again, that such an increase will very likely harm, rather than help Hawaii’s low-income workers, and we’re hoping he’ll take a look at the research that Grassroot Institute sent him.

Miro: But won’t a minimum wage help a lot of people?

Akina: Well, according to the latest research, the minimum wage does help some people. But it hurts many, many more. Overall, it ends up mostly hurting the people it’s supposed to help.

Miro: OK, so minimum wage increase obviously is what I meant. Why is that?

Akina: Well, that’s because, as the research shows, for decades, minimum-wage studies have shown that an unbalanced minimum-wage increase hurts more people than it helps. Some businesses may lay people off if they can’t afford the salary increase. Or they will cut back on employee hours and benefits. Or they’ll automate their operations — people have even seen that at McDonald’s. Or they’ll simply stop hiring. They also could raise their prices for their customers and that would make everybody’s cost of living higher. 

So these are the typical reactions of business to forced minimum-wage increases. No matter how you slice it, people with low skills will have a harder time finding work. Those are the ones we’re trying to help, and so our concern is that they will actually get hurt by forcing the minimum wage up.

Miro: Johnny here, speaking with Keli‘i Akina of Grassroot Institute of Hawaii, grassrootinstitute.org for more information, and it’s the legislative wrap-up 2022 session. We’re touching on those topics. 

Now, were there any sneaky things that happened during this legislative session?

Akina: Well, [chuckles] strange you asked that, because, as a matter of fact, yes. Your listeners will recall that back in November, the Hawaii Supreme Court unanimously deemed unconstitutional a practice by legislators called gut-and-replace — basically where legislators early in the session would have a bill go in by a certain title with certain content, go through all of the hearings, and so forth. 

And then, in the 11th hour, when no more hearings will be held, they may change the content completely, take out what’s in there, and put in new content. And this way, people don’t get to testify. And the practice of lawmaking goes on behind closed doors.

Well, that was declared unconstitutional, but this term, it seems that our legislators were testing the limits of it. “Gut and replace” is where, as I said, a lawmaker will remove the original wording of a bill after it has gone through the required three public readings in both the House and Senate, and replace its content with different language. Now, that really runs to follow the way it’s supposed to work. 

So what got gutted and replaced? They gutted and replaced HB1147. It started out as a 105-page bill to fund capital improvement projects. They gutted that entire bill and replaced it with just a five-page bill that would give the Hawaii Tourism Authority $60 million to carry on as usual. 

Now that’s problematic itself, since the tourism industry is fully capable of paying for its own promotion and doesn’t need the government to manage it. But some key legislators wanted to make sure that we continue to use the state’s funds to favor one industry over another. So they used something that looks very similar to gut-and-replace.

Miro: OK. Then housing, always a huge topic. What about housing? Did lawmakers do anything to make it easier to build homes?

Akina: Well, sort of. The main thing they did was endorse the formation of a working group to study what was nicknamed “Yes in my back yard.” It’s an approach to housing development, rather than saying, “Not in my backyard.” 

It will report on the potential benefits of reducing many of the barriers to affordable housing in government. There are lots of regulations and rules that it will take a look at. If they’re in the way of housing and development, they’ll hopefully target them and get rid of them. So we’re pleased that that’s going forward. 

Other than that, our lawmakers could have gone much further. But for now, that was an important acknowledgment that government regulations had been one of the main roadblocks to more housing in Hawaii, and we were thrilled that lawmakers actually took that step. So we’re going to give them some applause over there.

Miro: OK, OK. Also, you always hear about diversifying the economy. Did you hear lawmakers talking about diversifying the economy? Did they do anything to help out with new industries?

Akina: Well, yes. Lawmakers often do say they want to diversify the economy. But then they end up playing whack-a-mole sometimes when new industries arise. 

Case in point: cryptocurrency. Hawaii currently has the worst laws in the nation when it comes to cryptocurrency. It was so bad that, a few years ago, all cryptocurrency companies actually left the state. 

Now, for the last few years, they;ve had a so-called sandbox — kind of an incubator — which allows a few companies to operate on an experimental basis. But it’s still not great, and the sandbox expires this year.

Miro: OK, so how did lawmakers approach this cryptocurrency issue then?

Akina: Well, at first they began to propose bills that would ultimately overregulate the cryptocurrency industry. It’s not that they showed a lot of understanding about  cryptocurrency or blockchain, but rather that they did express a strong desire — whatever they understood it to be — to regulate it. 

Now that bill made it the farthest in the session, and would’ve created an extremely complicated and burdensome licensing scheme that would’ve infringed on privacy and property rights. And still Hawaii, after that bill is passed, would’ve been the worst in the nation for cryptocurrency.

But here’s where we want to give them a bit of praise. Thankfully, there were a few legislators who really understood cryptocurrency, and so they motivated their colleagues to kill those bills. 

But the problem now is that we need the governor’s administration to figure out a way to extend the life of the current sandbox, which can be done administratively. So we’re watching closely to see if that happens. It’s a solution that can come about without necessarily another law coming into play.

Miro: Covered a lot of ground here. What is next for the legislative process? The bills sitting on the governor’s desk?

Akina: That’s absolutely right, Johnny. Gov. Ige has until July 12th to either sign or veto the bills that were passed by the Legislature. Now, if the governor intends to veto a bill, he must inform the Legislature by June 27th and then deliver the veto by no later than July 12th.

Miro: Like I mentioned, we covered a lot of ground here — you did — and before we close though, Keli‘i, anything else you’d like to add?

Akina: Well, I just want to say that there were many good things that took place in this past legislative session, but the thing that we really need to watch out for is that a lot more money was spent than should have been spent. And it’s not going to be there to keep the government growing, which got much larger this legislative session. 

But people, citizens, voters, when you go to the polls this year, keep this in mind. Examine the voting records of the legislators who are calling, who are running for reelection and evaluate very carefully.

Miro: You can reach Keli‘i at grassrootinstitute.org, grassrootinstitute.org. Mahalo for stopping by and then discussing this important topic, the legislative wrap-up session for 2022, and look forward to discussing an important topic once again in the following weeks. Keli‘i Akina, have a great Sunday, and thanks for speaking with us here at H. Hawaii Media.

Akina: Thank you, Johnny. Much aloha.

Miro: The views and opinions expressed in this public access programming do not necessarily represent those of H. Hawaii Media’s family of radio stations. You’ve been listening to Sunday morning public access programming on the H. Hawaii Media family of radio stations on Oahu. Mahalo for listening to this H. Hawaii Media radio station. Have a great day.