Medical Homes: Will Medicaid patients suffer to save HGEA, UPW?
Opening Pandora's Box Of Hidden Tax Increases
By far the largest and the most misunderstood increase will come in the form of the suspension of several general excise tax provisions mistakenly called exemptions. Almost all of these so-called "exemptions," some of which were enacted over a half century ago, recognize the unique structure of the general excise tax and the fact that it may be imposed a number of times on the same transaction as goods or services move through the production chain. Then again, there is the tax as it is imposed at the front end of the chain as goods arrive in Hawaii.
While the measure addresses some of the pyramiding of stevedoring activities, such as services between related companies, nearly all of the goods coming over the state’s docks or through the state’s airports had been previously exempt from the 4% tax on the loading and unloading of those goods in recognition that the cost of the tax would be imbedded in those goods. They will now be taxed at the full 4% rate. This is one of the "special interests" that lawmakers have singled out to be suspended. That additional cost will work its way into the bag of rice or loaf of bread families need as food to put on the table. For manufacturers in Hawaii, that cost will be added to every bottle of jams and jellies or box of cookies shipped out of the state, putting Hawaii products at an even greater price disadvantage.
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DHHL outlines plan to reduce number of leases, keep beneficiaries waiting
The department has put 2,644 families into homes or on agricultural or pastoral lots in the last decade, averaging 264 a year. The increases, however, have fluctuated from year to year, ranging from 58 to 692.
Chairman Alapaki Nahale-a said he would like to set a realistic target of completing at least 200 houses a year. (So the GOAL is to cut back leases 24%)
But first they want to waste time with a study: “Nahale-a wants to first assess why people are still spending years, even decades, on the waiting list.” (Answer. It is because DHHL isn’t building houses fast enough.)
And even before that, they tried to abandon the mission: “In February, soon after his appointment by Gov. Neil Abercrombie, Nahale-a looked at the possibility of offering affordable rentals….”
And they haven’t initiated a single new development, instead they are taking credit for projects begun under Kane and Park: “The department recently opened four developments with a total of 119 homes and residential self-help lots on three islands. In the pipeline are four more projects on three islands, with a total of 388 houses or lots to be completed in the next few years.”
And they are considering a cutback of some of the DHHL’s plans: “Even if we develop all of those 1,000 units planned for East Kapolei in the next year, that's only 1,000 units," and would hardly make a dent, said Crystal Kua, spokeswoman for the Department of Hawaiian Home Lands.
And what happened to credit counseling for those on the waiting list? “"I've met many Hawaiians that have been offered homesteading opportunities that could not take them because of their poor opportunities," Nahale-a said. "That's why I'm so adamant about providing more affordable options."
Ahhh, but they ARE diverting resources to the ag and pastoral leases—meaning fewer overall homes will be built—but THIS was the program which Malama Solomon and Larry Mehau benefitted from so it must be good.
But Nahale-a also is returning to offering homesteaders agricultural and ranching options. He said it could be trickier since upfront infrastructure costs can be higher and agriculture is a tough industry. "We want to make sure we give homesteaders agricultural and pastoral options that are viable," he said.
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Special Session? Rep Belatti outlines Legislative Payraise Scenarios
the story of salaries does not simply end with the House’s vote on HB575 and the Governor’s potential veto. The rest of the story is also about the TIMING of that veto, whether or not the Legislature goes in to special session, and the whole host of unfinished business that was left undone due to botched conference negotiations.
As noted, the Governor can veto by the 45-day period specified in the State Constitution and the Legislature can come in on July 12th to address those vetoes. He can also veto before July 12th, as nothing in the Constitution prohibits an earlier veto message, and the Constitution permits the Governor to convene a special session of the Legislature or 2/3 of each chamber can by written request call for the convening of special session anytime after adjournment.
Based on this, as far as I can tell, here are the different scenarios….
(A Special Session must be avoided even if it means Legislators get a fat raise. If they go back, they will raise taxes.)
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SA: Students do better when they spend less time around the DoE
"There's no real apparent correlation between time and meeting AYP (adequate yearly progress)," said schools Superintendent Kathryn Matayoshi. "Some of the schools with a lot of time are not meeting our learning targets, and some who are really short are."
Matayoshi voiced concern, though, about the wide range of school hours, saying it's time to close the gap between the campuses with the longest school days and those with the shortest. (This means they will seek to cut the school day in above-average schools.)
REALITY: Abercrombie’s Board of Education: Accountability begins now, and it’s already ugly
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SA: Authorize and Sell Rail Bonds Now
Kobayashi has overseen enough capital improvements to be aware of the role bond financing has played in upgrades to the bus system, and she's presumably read the financial plan on this project. Her proposal to scrub bond financing from the Honolulu Authority for Rapid Transportation's first budget should be ignored in any rational analysis.
The amount being borrowed still must be approved by the Council in a separate action — no bonds will be issued immediately after the passage of Bill 40. But the proposed HART budget in Bill 33 is what's making people nervous, because the anticipated amount to make the budget pencil out is $104 million. That's a scary figure, especially given that the federal government's Full Funding Grant Agreement hasn't been approved.
City officials insist that the Federal Transit Administration is still flashing green lights that the funding will be forthcoming. We cautiously accept their assertions…. (Is borrowing $3.5B based on “flashing green lights” cautious?)
REALITY: Panos to Council: Floating Rail Bonds before federal funds are secured is dereliction of duty
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JAL: Golden Week visitors to Hawaii down 41.7%
There were 213,386 passengers who traveled to international destinations during Golden Week, down 31.1 percent from the same period in 2010. Total capacity on international routes fell 26.1 percent compared to last year, and total load factor, or percentage of seats filled, was 73.4 percent.
A total of 26,457 passengers visited Hawaii, down 41.7 percent from a year ago. Available seats to the Islands decreased 37.6 percent compared to a year ago, and load factor was 78.1 percent.
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Aloha Cargo, part of Young Bros Monopoly, reaps benefits of Superferry’s demise
While Aloha Airlines ended passenger service on March 31, 2008, and laid off more than 2,000 employees, the company's profitable cargo operations lived on. Seattle-based Saltchuk Resources Inc. bought the cargo division out of bankruptcy for $10.5 million in May 2008 and renamed it Aloha Air Cargo.
Today, Aloha Air Cargo continues as a key component of the state's transportation network with 70 percent of the interisland air freight market. That translates to about 300,000 pounds a day, or more than 100 million pounds a year.
Aloha Air Cargo's largest customers are Love's Bakery, UPS, FedEx and the U.S. Post Office. (Love’s was a big user of the Superferry. Young Bros was a behind the scenes force working to destroy the Superferry.)
"Most of the loyal customers we had — about 1,900 — stuck with it even though there was a brief transition from the airline to Aloha Air Cargo," President Lee Steele said. "Our business model is pretty much the same."
Love's Bakery and Aloha Air Cargo have a "mutual beneficial relationship," said Walters. Love's Bakery recently signed a contract extension that runs into 2012.
"They have a very proactive management team," Walters said of Aloha Air Cargo. "They listen to what our concerns are and what our needs are. I think the follow-up is much greater. That's not to say we didn't have a good working relationship with Aloha (Airlines) prior to the closure of operations, but in terms of comparison, it's a much more professional relationship now."
Love's Bakery ships 200,000 pounds of bread and cake each week on Aloha Air Cargo from Honolulu to Maui, Kauai and the Big Island. It uses interisland cargo shipper Young Bros. Ltd., also owned by Saltchuk, to send goods to Molokai and Lanai. Saltchuk also owns Hawaiian Tug & Barge.
"Air cargo is essential because Love's Bakery is known for its freshness," Walters said. "We don't freeze our products. We want to provide the neighbor islands with the same quality and freshness as Oahu receives."
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NYT: Hawaii Captive Insurance Laws help create “Shadow Insurance Industry”
Companies looking to do business in secret once had to travel to places like the Cayman Islands or Bermuda.
Today, all it takes is a trip to Vermont.
Vermont, and a handful of other states including Utah, South Carolina, Delaware and Hawaii, are aggressively remaking themselves as destinations of choice for the kind of complex private insurance transactions once done almost exclusively offshore. Roughly 30 states have passed some type of law to allow companies to set up special insurance subsidiaries called captives, which can conduct Bermuda-style financial wizardry right in a policyholder’s own backyard.
Captives provide insurance to their parent companies, and the term originally referred to subsidiaries set up by any large company to insure the company’s own risks. Oil companies, for example, used them for years to gird for environmental claims related to infrequent but potentially high-cost events. They did so in overseas locations that offered light regulation amid little concern since the parent company was the only one at risk.
Now some states make it just as easy. And they have broadened the definition of captives so that even insurance companies can create them. This has given rise to concern that a shadow insurance industry is emerging, with less regulation and more potential debt than policyholders know, raising the possibility that some companies will find themselves without enough money to pay future claims. Critics say this is much like the shadow banking system that contributed to the financial crisis…. (Yep. Hawaii is already helping foment the next big economic crisis.)
“It is no longer ‘captive’ insurance,” said Thomas D. Gober, a financial fraud examiner who specializes in complex reinsurance transactions. “It’s now billions of dollars from all over the country, yet it’s still being regulated lightly, as if it’s captive.”
Other states took note of Vermont’s success. Hawaii charged lower taxes than Vermont on the revenue that captives took in on premiums, leading Vermont to reconsider its rates. Delaware gave its insurance commissioner the power to exempt a captive from provisions of state insurance law; the number of captives in the state doubled last year.
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Hawaii Tax Credits behind Obama Admin scheme to Tax Drivers by Miles Driven
The Obama administration is big on pushing Americans to alternative energy and vehicles that get better fuel economy. Part of the plan to get drivers to buy hybrids and EVs were big tax incentives that were matched by some states. One such state is Hawaii where the buyer of a new Mitsubishi EV can get the federal $7,500 credit and a $4,500 rebate from the state.
A draft was leaked recently of a proposal for a new plan to raise more money to repair roads around the country. The bill outlines a plan to charge vehicles based on the number of miles they driven. The proposal is apparently a grab by the government to help states recover some of the lost funds due to the adoption of EVs and hybrids that burn less fuel and make less tax revenue for states.
The leaked plan was part of a 500-page draft and proposed a new office at the Federal Highway Administration called the Surface Transportation Revenue Alternatives Office. According to the draft, this office would be "[Authorized to conduct a] study framework that defines the functionality of a mileage-based user fee system and other systems."
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Hawaii Foreclosure Law could weaken Mortgage Securities Market
The bill is considered by consumer advocates to be one of the toughest such measures in the nation. It is based upon a similar Nevada law, and it requires lenders to sit down with borrowers in a face-to-face meeting mediated by a third party if the borrower requests the meeting. Additionally, the law requires mortgage servicers to submit proof of an intact chain-of-title and promissory note to the mediators two weeks prior to the meeting. The law also puts a moratorium on new non-judicial foreclosure actions until July 1st. Any ongoing non-judicial foreclosure would be converted to a judicial foreclosure. If the servicer or lender is not negotiating in good faith, penalties can be imposed.
The chain-of-title requirements give a lot of leverage to beleaguered homeowners. For hundreds of years, titles were transferred through county recording offices in the United States. With the advent of the Mortgage Electronic Registration System (MERS), this frequently did not happen. Additionally, many mortgages were originated, sold, and packaged into mortgage backed securities. These practices caused the original notes for many mortgages to be lost or destroyed, which lead in part to the robo-signing scandals that have occurred over the past few years (click here for the recent 60 Minutes report on this issue). Lenders and servicers are far more likely to acquiesce to a mortgage modification if they believe they cannot prove the right to foreclose on the property due to missing documentation.
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OHA’s Robert Klein helping Gold Coast Residents make State pay for their Seawall
Century-old seawalls along the Gold Coast on Oahu's southern shore are breaking down, and nobody wants to step up and fix them.
Area residents say the state of Hawaii should pay to maintain public access for swimmers, fishermen and surfers — as it's done in the past. The state, in turn, says the walls are privately owned, exist primarily to protect private property, and are the responsibility of private parties.
Soon, a judge will decide whom the walls belong to — and whose kuleana it is to maintain them….
Wynhoff speculates that the landowners want to use the court opinion to pressure the Hawaii Legislature to appropriate funds for the maintenance of the walls. House Bill 84 and Senate Bill 79 each would have allocated $4 million to the cause, but neither made it far this session and neither will become law this year.
Neighborhood Association attorney Robert Klein, a retired justice of the Hawaii Supreme Court, said the landowners are merely trying to establish responsibility in the hope that the state will step up and maintain the walls and prevent injuries. If not, at least the landowners will be clear of potential accident and injury lawsuits, he said.
(Klein is the author of the PASH decision. So irony on top of irony? Or is is just consistent self-interest at work throughout?)
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Session Wrap: Agriculture, Aina Fail to inspire Taxes and Subsidies
What Passed
- House bill 865, signed into law as Act 36. It will increase the fee for the inspection, quarantine, and eradication of invasive species from 50 cents to 75 cents for every 1,000 pounds of freight brought into the State.
- House Bill 1552, which became law as Act 49. It will limit the use of "Kona" on coffee packaging — unless the product is made from 100 percent Kona coffee beans or if the word is part of a company's name.
What Died
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Petition to Require an EA for EA Exemption Lists
When 35 acres of mangroves were poisoned as an eradication experiment along the shoreline at Isaac Hale Beach Park (Pohoiki), Wai Opae Marine Life Conservation District, Onekahakaha Beach Park, and Paki Bay on the Big Island, leaving the dead trees to blight the view plane and rot away into the water, there was no environmental review or public comment.
In fact, the County of Hawaii, a partner in the project, exempted this action from requiring an Environmental Assessment, calling it routine park maintenance. The public, which will now have to look at dead trees along the shoreline for the next 30 years, was outraged, a lawsuit was started, but it was too late to stop the project and require an EA.
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UH Tree Ring Study: Global Warming started in 1700s
The research shows high variability in the intensity of El Niños over the centuries.
The strongest activity has been since the 18th century, the scientists said. (Obviously due to the popularity of the 1701 Chevy Suburban)
The weakest activity was during the 11th century, a period known as the Medieval Climate Anomaly, which saw warm temperatures in Europe, Greenland and Asia and bone-dry conditions in the American West. That was followed by a centuries-long cold period known as the Little Ice Age…. (which correlated with bankruptcies of several major auto manufacturers.)
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Crazy Scene: 10,000 psychiatrists gathering for annual meeting in Honolulu
The convention plans to highlight research on post-traumatic stress disorder among military families. It will also feature a study on the psychological stress of disaster and trauma workers. The discussion will include information on those who responded to the earthquake and tsunamis that hit Japan on March 11.
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Samoa to jump forward in time by one day
Australia and New Zealand have increasingly become Samoa's biggest trading partners.
Samoan Prime Minister Tuilaepa Sailele Malielegaoi said: "In doing business with New Zealand and Australia, we're losing out on two working days a week.
"While it's Friday here, it's Saturday in New Zealand and when we're at church Sunday, they're already conducting business in Sydney and Brisbane."
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FP: Inouye threatens Cut-off of Palestinian Aid Money if Hamas Joins Gov’t
29 U.S. senators have asked President Barack Obama Friday to cut off aid to the Palestinian government if it joins with Hamas, in a previously unreported letter (PDF) obtained by The Cable.
"The decision of Palestinian Authority (PA) President Mahmoud Abbas to form a unity government with Hamas - a designated terrorist group - threatens to derail the Middle East peace effort for the foreseeable future and to undermine the Palestinian Authority's relationship with the United States," begins the letter, which was spearheaded by Sens. Robert Menendez (D-NJ) and Robert Casey(D-PA).
Menendez is the third ranking Democrat on the Senate Foreign Relations Committee and Casey chairs SFRC's Near Eastern and South Asian Affairs subcommittee. The letter was also signed by Democratic heavyweights Sen. Carl Levin (D-MI), the chairman of the Senate Armed Services Committee, and Sen. Daniel Inouye (D-HI), who chairs the Senate Appropriations Committee.
On the other hand…. Neil Abercrombie, D-Hezbollah
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