How the Grassroot Institute is working for a better Hawaii

by Mark Coleman, Grassroot Institute, June 14, 2023

From property taxes to permitting backlogs, Ted Kefalas, director of strategic campaigns for the Grassroot Institute of Hawaii, covered a wide range of topics during his first-ever visit to the “Rick Hamada Program” on KHVH-AM. 

During the morning radio show on June 8, Kefalas offered insights on issues that are top of mind for Hawaii residents — and what the Grassroot Institute is doing about them. 

He said that at the recently concluded legislative session, the Institute “actually proposed 15 model bills this year that were introduced and got one across the finish line, which was the Interstate Medical Licensure Compact,” he said. 

Another legislative victory highlighted by Kefalas, who leads the institute’s advocacy efforts, was the pass-through entity tax bill that will allow certain Hawaii businesses to deduct their state income tax liabilities from their federal income tax liabilities.

But the Institute’s work is not finished yet, said Kefalas. With the legislative session concluded, it now has shifted more of its focus to the counties and issues such as  short-term rentals, property taxes and permitting backlogs. 

“City Council never sleeps,” he said. “And so we have been active in Honolulu City Council. We’ve been active on Maui, Kauai, and Big Island, really talking about these things.” 

Hamada said he considered the institute’s common-sense approach to be “one of the keys”  to its ability to impact change. 

“I don’t sense — and never have — that there is a political agenda,” he said. 

Said Kefalas: “We do this because we truly care and, you know, we just want to see a better Hawaii.”

TRANSCRIPT

6-8-23 Rick Hamada with Ted Kefalas

Rick Hamada: Welcoming in Grassroot Institute of Hawaii. Many, many, many, many years of working with and being made aware, going back to late great brother Dick Rowland and here today, can’t wait to get started, Ted Kefalas joins us, director of strategic campaigns for Grassroot Institute of Hawaii. 

Ted, it’s our first time together but it’s a pleasure to see you.

Ted Kefalas: Yeah, likewise, Rick. Thanks for having me on, really appreciate it.

Hamada: Would you mind sharing just a bit about yourself and your role with Grassroot Institute, and we’ll jump into a myriad of topics?

Kefalas: Sure, absolutely. So, I’m originally from Virginia, but don’t hold that against me. I had to get out of the swamp, actually, and my fiance has some family here, so Hawaii made a perfect sense move. And I have to say that everybody I’ve been so lucky to have met, some wonderful people. I mean, everybody has been so filled with warmth and aloha, and so I’m just so grateful for that.

But as you mentioned, I work as the director of strategic campaigns at the Grassroot Institute. And essentially, that’s just a fancy way of saying registered lobbyist. 

And so a lot of what I do is I’m trying to put the good work that we’re doing at Grassroot Institute into the hands of lawmakers, but also the public, and just trying to disseminate as much information as possible. 

A lot of what I do is… I spend my time meeting with legislators behind the scenes, testifying at committee hearings, but also trying to organize advocacy groups, getting people on the ground to be interested in some of these issues because quite honestly, sometimes the budget can be a little boring.

So you know, trying to do a lot of that, and for any of your listeners that don’t know really too much about us — I know Joe, you’ve had Joe Kent and my colleague Malia Hill on previously — but just a little quick refresher, we’re a local nonprofit think tank based in Downtown Honolulu, and we’re really focused on lowering the cost of living and trying to hold the government accountable. And I think those are two pillars that people can really get behind.

So, a little bit more about me, I previously worked as a lobbyist for Tesla Motors, the electric vehicles, as well as — I know you’re a sports guy so — FanDuel and DraftKings. I worked to get sports betting passed in a few states on the mainland. 

But I have to say working at Grassroot has been by far the most rewarding experience in my life because I get to get back to public service.

You know, we don’t do this for the bottom line; we don’t do this for our stockholders. We do this because we truly care and you know, we just want to see a better Hawaii. 

So I’m really excited to be here with you today and really looking forward to talking through some of these topics.

Hamada: I would love to have you come back at 12 noon. We have the Poor Sports Radio Show on Fox Sports 990 we’re doing a little bit later, but more on that in a moment. 

You mentioned the word “accountability” and Grassroot is absolutely essential in informing the public. Two points: 

One, what is your perception of the consumption and processing and discernment of the information you provide? 

And secondly, can you give us a little bit of assessment of local legislators, council members, executive branch, what your impression is, and compare and contrast to Virginia or other experiences?

Kefalas: Sure. I think, you know, to be quite honest, everybody here has been much more open and willing to listen. And, you know, coming here, you think, “Oh, it’s a blue state. It’s completely blue in a lot of areas, and you know, they have one train of thought.”

But it’s actually funny because the Democratic Party here is so complex: It’s a big umbrella party. So you have folks that fall into that Blue Dog Democrat kind of mentality, and then you have the far-left progressives. And they’re all considered Democrats. 

So you know, everybody is willing to listen, and one thing that we’ve been really fortunate at Grassroot is that legislators have been very open to meeting with us, talking us through specific legislation. 

We’ve actually proposed 15 model bills this year that were introduced and got one across the finish line, which was the Interstate Medical Licensure Compact [bill]. That was a big step forward. We’re excited to see what’s next. 

I think, you know, on the council level, we’ve been working closely a lot with Tommy Waters and Andria Tupola and a few others that have really been interested in this property tax issue. Everybody’s kind of talking about it; everybody saw their property taxes skyrocket recently. So trying to figure out what are those solutions, what are, you know, short-term, but also long-term solutions for people because this isn’t a problem that’s going away anytime soon.

So in that regard, everybody has been much more responsive. I remember when I first moved out here, to be quite honest, and everybody … you know, I was just cold-calling people. I didn’t have a ton of contacts and people were responsive. 

You don’t get that in DC; everybody’s kind of shut off. If you don’t know people, then you’re not getting a meeting. So it was a breath of fresh air coming here and really excited for what comes next. 

Host: I love all of this. Talking with Ted from Grassroot. And Ted, now that the legislative session is over — of course, [the] governor’s still discerning and deciding — but what is the focus now that the session is over for Grassroot?

Kefalas: Sure. Well, you mentioned that session’s over. We’re still working with the governor. I know you had Malia on last week to talk about bills that he can sign and veto. 

We’re really glad that he went forward and signed the pass-through entity legislation. So, that’s a huge relief for businesses here in Hawaii, but aside from that, City Council never sleeps. And so we have been active in Honolulu City Council. We’ve been active on Maui, Kauai, and Big Island, really talking about these things.

You know, I mentioned property taxes earlier. We actually came out with a report that takes a look at some of these relief measures, goes through each county, and believe me, that was no easy measure because it’s like comparing apples to oranges in certain cases. So, that report’s actually on our website. It’s free, if anybody wants to go on there. It’s grassrootinstitute.org — not .com — .org, and really trying to look at solutions there. 

But also, I think everybody’s talking about DPP [Department of Planning and Permitting] — permitting. 

Hamada: Amen.

Kefalas: That is a huge, huge backlog. I think we’re facing something like 200 and some odd days right now that people have to wait. 

So, we are working closely … Andria Tupola has a measure that passed last night — which we can get into later on in the program — but that was a great start to trying to relieve some of that backlog and get people out of line in a sense so that we just have less people waiting.

And then we also … I think there’s a long conversation that’s been happening about short-term rentals. So many people, you know, there’s people that fall on both sides of the issue where folks will say, “Oh, our neighborhoods should stay neighborhoods.” And then others [say they] should be able to profit from our tourism industry. 

And to be quite honest, our tourism industry is what is driving our economy. So, to say that locals can’t take part in that and that we’re just going to favor these multinational corporations seems a little wrong to me.

So, we’ve been working closely with them on that, but not to forget long-term renters either — I mean, that’s something too. We want to try to incentivize property owners to rent out their properties to long-term renters. So, working with the Council here and on Kauai and Big Island to try to figure out what that proper solution is. 

So, we are constantly in communications with them. We are working behind the scenes, testifying at committee hearings.

I do also want to say — not to be too long-winded — but we are constantly the only ones at committee hearings. Aside from a few high-profile ones, we are usually the only people there.

And so if you are passionate about these issues — about permitting, about property taxes — you need to go and make your voice heard. It’s not enough to just complain on Facebook or Instagram. And, you know, I know it’s tough to take the time out, but reach out to your council people, reach out to your state legislators. You’d be surprised how much of a difference you can make.

Hamada: One of the keys to Grassroot, a nonpartisan organization, is I don’t sense — and never have — that there is a political agenda. However, the advancements that you’re talking about do fall into a common-sense definition. Makes total sense on short-term rentals: Your property, your investment, your freedom to utilize as you will, in a responsible way. Yes, in consideration of others, but not to have mandates that eliminate entirely your opportunity.

Kefalas: Well, and the short-term rental too is such a tricky issue. I know people are upset by the disturbance that they can cause in the neighborhoods, but there are already ordinances and laws that deal with that. 

Hamada: That’s right. 

Kefalas: So if people are causing a disturbance late at night, I mean, you can call the police and, you know, get them involved in that situation. It’s not necessarily because they’re renting it out. That could happen with a long-term renter too. I mean, everybody’s had a noisy neighbor here and there. 

Hamada: Yeah, I’ll tell you one thing that’s interesting to put on the table that I talk about consistently is our cost of living obviously. I did a comparison with Las Vegas; it’s a 51% difference in the cost of living. Here, we have the exit of many, many families, even businesses, et cetera. 

What is your take on the COL? What is a solution to help mitigate further increases, and what is the association with what’s taking place in Congress and with the administration, President Biden, in this incredible escalation of our debt and more?

Kefalas: Sure, I think, you know, it’s funny to me because legislators and lawmakers, whenever they’re running in November, they’re always saying, “Oh, we need to lower the cost of living, we need to lower the cost of living.” And, you know, we saw it at the state level this year, and we see it at the county level as well where they have these huge windfalls of revenue, and they almost don’t know what to do with it. So they decided, “Oh, instead of giving that money back to the people, we’re just going to spend it.”

Hamada: That’s right.

Kefalas: And usually, as we’ve seen with these government projects like the rail and Aloha Stadium now, these things are just going to increase costs every year they’re delayed. And it’s almost inevitable that these projects are going to be delayed constantly. 

So, you know, I was talking with Tommy Waters and a few others on how to create relief, but still balance the budget. We don’t want to … It would be nice to cut everybody’s taxes by 100%, there still are needs in the City and County and state, so we have to find that proper balance, and that’s why we’ve been looking at these relief measures. 

But just going back to what you’re saying, looking at the City and County of Honolulu, the property tax assessments have grown. I think revenue is up $212 million. They recently, last night, passed a bill that would give a $350 tax credit to all homeowners, and property taxpayers… Well, homeowners — excuse me.

So, that alone costs $50 million or so. They still have $160 million in the bank that they are, you know, kind of using as funny money to take on any kind of projects that they want, and they’re just spending it however they wish. And you know, the state did the same thing where they ended up spending all of this money. 

So for us, we would much rather either give the money back to taxpayers, put it in some sort of a rainy day fund, but ultimately, stop the crazy spending on these projects that are never going to come to fruition.

Host: Short break. Only one we have. We’ll be back with Ted in a moment. Grassroot Institute of Hawaii, and you don’t want to miss the next part of our conversation with Ted Kefalas who is with us from Grassroot Institute of Hawaii.

[Quick break]

Got a ton of topicality. I would like to bring up briefly, and that has to do about housing, once again. And even the moves put by our government to increase these punitive taxes, if you are a homeowner, and you have an empty home. Ted … Because you’re costing our community by not having occupation of your private property. Thoughts?

Kefalas: Yeah. You know, there are proposals at City Council, in Honolulu and Big Island, to tax these empty homes at an exorbitant rate. And again, this is kind of an easy scapegoat because a lot of these properties are vacant, and they’re not necessarily voters. So legislators can easily point to these empty homes and say, “This is the reason why we don’t have housing in our communities.”

And the reason these homes can be vacant is because they can afford it. To be quite honest, I mean, even if you were to convince these homeowners to sell or rent out their properties, they’re not going into the affordable housing market. These are, you know, multi-million dollar mansions — kind of — and so they’re either gonna pay the tax or they’re just going to sell it to someone else that’s pretty wealthy.

So the thinking that, “Oh, we’re just gonna be able to have these, you know, 3,000 empty homes that now go into the rental market or whatever,” — that’s just wrong. 

And it’s funny because I’ve talked with a few people in the city administration and they have clearly stated to me that they don’t even know how many empty homes there are on Oahu. There are some estimates that there are 80,000; there are some estimates that there are 30,000; there are some that are 20,000. So how do you enforce something that you don’t even know what you’re looking at?

Hamada: Personally, it’s the offensiveness. That it is government with mandates that make you do what they desire you, even though it’s your private affair.

Kefalas: Right.

Hamada: It’s just an incursion into … There’s a difference between, in my opinion, compelling and coercing. And this is just way over the top.

Kefalas: And are we gonna have a police force now that is gonna … 

Hamada: Enforce.

Kefalas: … enforce that?

Hamada: Yeah.

Kefalas: I mean, you know, how much is that gonna cost and in terms of what we’re bringing in? So it’s just to me, it’s a lose-lose situation. And hopefully, the Council can strike that down. 

I know on Big Island, they proposed it back in November, and the public outcry was so outrageous that the bill still hasn’t dropped.

Hamada: You know, there’s more topicality. I’d like to get into Downtown Honolulu with you because, well, I live there, but there’s so much time and attention. But I’d like to get your take before we go in just the minute and a half we have left. You mentioned before there was outrage and there was … how does Grassroot have in your formula of incentivizing citizens to do exactly that: to react, to protest, to be proactive, to et cetera et cetera?

Kefalas: Exactly. So actually, we put out a weekly newsletter every Friday, that … It kind of just gives a rundown of some of the topics and some of the things that we find interesting. 

But then we also put out a “President’s Corner”; President Keli‘i Akina writes this “President’s Corner,” and that comes out on Saturdays. So if you’re interested in reading those, you can sign up on our website.

But also on our website — you go on grassrootinstitute.org/action — you can take a look there. There are some ways that you can write in to the governor right now, have him sign or veto a bill, and really just voice your opinion.

Hamada: Ted, I want to thank you very, very much. Can’t wait till the next time.

Kefalas: Yeah. Thank you, Rick. Really appreciate it.