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Wednesday, January 2, 2013
January 2, 2013 News Read
By Andrew Walden @ 4:23 PM :: 5167 Views

Taxes to Rise on Most American Workers

Fiscal Cliff: Who Won? Who Lost?

Transition Leaves Rent-Seeking Corruption Intact

SA: Our island state, now 53 years old, has acquired bad habits that benefit a few at the expense of everyone else…. (Progressives attack Inouye #1)

Those who benefit from ethical lapses, rent-seeking and corruption know they have a good thing going here and don't want to give it up.

Rent-seeking is the practice of manipulating the political system to increase one's share of existing wealth, instead of creating new wealth that might benefit more people.

We need change, not transition. Change that precedes the opening of minds, the acceptance of new faces and ideas. Change that welcomes innovation and is the precursor of new wealth.

The status quo benefits from business-as-usual. In government, business-as-usual has not been open, transparent, accessible and accountable.

Signs of government failure and dysfunction are everywhere apparent. The Public Land Development Corp. is an abomination. The Honolulu Authority for Rapid Transportation — overseeing rail, the state's largest public-works project — is a painful reminder of business-as-usual. The Office of Information Practices' complicated processes create needless delay and cynicism. The "Wonder Blunder" crisis has exposed the University of Hawaii Board of Regents and administration as maladroit, embarrassing and wasteful.

Perhaps it's time for good government to be written into the state Constitution. Good government may need to be protected as a public trust, the way the natural resources of the state are protected for the benefit of all.

Enabling legislation could turn the assortment of good-government agencies — Ethics Commission, Office of Information Practices, Auditor's Office and Campaign Spending Commission — into a single state department, with enforcement powers, headed by a single accountable director, appointed by the governor, who ultimately should be accountable.

read … Change, not Transition

Inouye Legacy: High Housing Costs, Multiple Jobs?

CB: …we should also acknowledge the less glorious aspects of Hawaii that, while not directly a result of Inouye's legacy, are sad realities that became manifest during his long congressional tenure. (Progressives attack Inouye #2)

By many indicators, Hawaii has the highest (or among the highest) housing and rental costs, gas prices, electricity rates and food expenses in the nation.

Many people hold down multiple jobs, and many households are home to multiple generations. The public education system is far less than stellar, the homeless population has exploded and Native Hawaiians are way overrepresented in our jails and prisons.

Hawaii is also heavily dependent on tourism and federal spending, making us awfully vulnerable whenever there is a drop in visitor numbers or (as there is now) more proposed cuts to the military. Though there are efforts to develop new industries, our state cannot yet be said to have a diversified economy.

read …. Welcome To Dan Inouye Honolulu International Airport?

Shapiro: Inouye Led Hawaii to a Bad Place

Shapiro: Inouye’s … manipulations to control the succession to his Senate seat and that of retiring Sen. Daniel Akaka brought Hawaii to a bad place.

He and Akaka both clung to power until 88, with the predictable result that both are gone at the same time and Hawaii's seniority — the main currency of the Senate — abruptly plunged from 72 years to zero.

As capable as Hanabusa is, appointing a 61-year-old to join 65-year-old Sen.-elect Mazie Hirono, who won Akaka's seat with Inouye's backing, made no sense.

Two freshmen in their 60s wouldn't have enough productive years left to build real seniority.

It would set us up for an eventual repeat of the current scenario of two aging senators departing close together, leaving us to start over yetagain with zero seniority.

read … Attack on Inouye #3

Kim Investigated UH, Who Investigated Act 221? 

CB: In response to a common sentiment that the state was too heavily dependent on tourism for its livelihood, the Legislature passed Act 178 in 1999 which intended to foment investments in Hawaii by high tech companies. The law offered a 10 percent tax rebate to qualified companies. However, because it was widely viewed that the requirements for the tax credits under Act 178 were too stringent, only 23 claims were made under that law. To try and further stimulate investment, the state passed Acts 297 and 221 a few years later which relaxed some of these requirements and increased the generosity of the credit to 100 percent. This made it the most generous tax credit in the United States at the time. With regard to the less stringent requirements to qualify for the credits, Sumner la Croix, Andrew Kato and James Mak who were all affiliated with the University of Hawaii Research Organization at the time, said, “When combined with the absence of a precise list of what activities qualified, it meant anything that could plausibly be argued to qualify had to be accepted.”

These tax credits do not pass even the most generous cost-benefit analysis. Over $1 billion in credits were doled out between 1999 and 2010. Yet, no sane person would even begin to intimate that the state has even a semblance of a “high tech” industry. The primary reason for this failure is that the credits were given out indiscriminately with little regard to how the recipients would benefit the state economy over the long-haul. An excellent example of this was the receipt of $15 million of credits by the makers of the movie Blue Crush which was only a short-term project with nothing vested in the long term health of the state. To this end, the state auditor, Marion Higa, said in July 2012 that, "the State can neither measure nor ensure the effectiveness of the nearly $1 billion in tax credits."

The Legislature was warned about the misuse of the Act 221 tax credits. In testimony in 2004, the director of the Hawaii State Department of Taxation speculated that at least 20 percent of all the credits violated criminal or state laws. What was the Legislature’s response? Do nothing, at least until the exigencies of the Great Recession started to take their toll on the state’s coffers. Act 221 was allowed to expire in December of 2010.

Across the board, economists in both academia and government do not like targeted tax credits. We view such targeted tax schemes as easily abused. This is particularly true when the government lacks the will or the capacity to properly monitor the recipients and evaluate the benefits of the policy; this was clearly the case with Act 221.

Moreover, there are also non-trivial distributional implications to such policies. Given the absence of any clear benefit from the policy, the $1 billion of forfeited revenue had to be made up in other ways. In effect, this meant a transfer of wealth from hard-working households across the state to large corporations conferring little to no benefit upon the state. In short, aside from opening the floodgates to corruption and misuse, it was not an equitable policy by any measure.

And yet, no one was held accountable. No hearings. No mea culpa.

read … Do as I Say, Not as I Do

Gil-Keith Agaran Applies for SD5 Seat

KHON: …the next appointment pending is his Maui senate district 5 seat. The maui democratic party is taking applications until Thursday….

The party is aiming for Saturday to vote on three names to forward to the governor. Two have applied so far, including Maui representative Gil Keith-Agaran. He was in line for house majority leader if Joe Souki wins the speakership over Calvin Say.

"I gave him my blessings to move on, he has an opportunity he ought to take it," said Rep. Joe Souki.

If Keith-Agaran were to be selected by the governor, Souki says he'd put Scott Saiki in the House majority role instead. The musical chairs don't stop there. Someone would have to be appointed to fill Keith-Agaran's House District 9 seat.

"There is discussion going on right now within the Maui Democratic party," said Souki (And all of these appointees will owe Abercrombie.)

read … Abercrombie rearranges the Placeholders

OHA Micromanagement Destroyed Profitable Poi Mill

SA Jan 2, 2013: Makaweli Poi was established in 1993 by Makaweli Valley taro farmer John A‘ana and his cousin Rawlins Char a year after Hurricane Iniki destroyed Waimea Poi Mill.

The cousins started the company with the help of a $50,000 loan from OHA, but A‘ana later sought to get out of the milling business because it was too much to do along with growing taro and being a Kauai Fire Department captain, according to OHA.

A‘ana had talked with various prospective buyers, but made a deal to sell the mill to OHA in 2008. The agency paid $185,000 for the business, and envisioned establishing academic programs for students in the taro fields. OHA also envisioned establishing a farmer cooperative to increase poi production and profit.

Then-OHA Trustee Donald Cataluna contemplated doubling the mill’s 12.5 percent profit to 25 percent — unheard of for an agricultural enterprise, according to a 2008 OHA bulletin about the purchase.

However, the mill lost about $100,000 in each of the four years it was owned by OHA through nonprofit subsidiary Hi‘ipoi LLC.

A‘ana said in a June Star-Advertiser story that bad floods in 2008 destroyed many huli, or baby taro plants, which prompted some farmers not to replant. The June story also quoted former OHA Trustee Clarence Ku Ching as saying micromanagement from OHA’s offices in Honolulu added expenses to mill operations.

June, 2012: New taro team will take over operation OHA is giving up

read … Micromanagement

Fix recycling program gaps

SA: The auditors noted that four RRR Recycling Services centers refused to provide documentation of the redemptions paid to consumers, which, according to the report, leaves unanswered questions over the justification for payments the state made to the company.

In addition, Coca-Cola Bottling Co. and Pepsi Bottling Group, two of the largest beverage distributors, did not provide documents for two months.

That meant auditors couldn't check about $1.4 million in deposits and $270,000 in container fees reported and paid by the companies.

It's important that, in seeking to improve its container deposit program, Hawaii not throw out the baby with the bathwater. The program has been the principal factor in pushing Hawaii's container recycling rate to 79 percent (really?  With all the fraud, how could they know?) in 2008, and program administrative costs have been kept low. (Because they don’t check the fraudsters.)

read … Hello?  Hello? Anybody home?

Obama Raises Taxes on 77% of Households, heads back to Hawaii

LAT: "I think we all recognize that this law is just one step in the broader effort to strengthen our economy (define ‘our’) and broaden opportunity for everybody," Obama said late Tuesday night. "The fact is that the deficit is still too high, (because of me) and we're still investing too little in the things we (define ‘we’) need …."

WHD: Obama Returns to Hawaii at an Added Cost of Over $3 Million

read … Triumphalism

Hanabusa Lies About Tax Hike

HNN: "I think what is really important for the people of Hawaii is that we kept the tax rates low for middle class families, for 98% of taxpayers and 97% of small businesses," said Hirono.

Reality: Senate-Passed Deal Means Higher Tax on 77% of Households

Source: Tax Policy Center

Know: www.TheRealHanabusa.com

read … Hanabusa Lies

Schatz’ Fiscal Cliff Vote Leaves Non-Profits Scared

HNN: U.S. Sen. Brian Schatz (D-Hawaii) said the deal approved by the House today will mean no major cuts for now in defense spending and to programs such as Medicaid and Medicare.

"What were really looking at was a total disaster from a fiscal level and what were able to do is avoid it," Schatz said.

But not all share his optimism.

Hawaii's social services community, weary after years of budget cuts is still bracing for more.

"For me it's kind of scary, I think that all of the nonprofits that serve as a safety net in the community really are wondering what's going to be next," said Connie Mitchell, executive director for the Institute for Human Services.

IHS -- which serves Hawaii's homeless -- gets about $2 million -- or about a quarter of its budget -- from federal sources.

"If they cut our resources and we're already very thin across the board in the nonprofit sector, then we're really not going to be able to meet the needs," Mitchell added.

Child & Family Service has similar worries.

The social agency gets about $5 million -- or about 20 percent of its budget -- from the federal government.

"Once they come to term with spending cuts at the federal level but it seems pretty clear that they will eventually have to step up to spending cuts," said Garval, CFS's president and CEO.

read … Poor Must Suffer so Wind Scammers and Hollywood can get theirs

HSTA Teacher Blames Micronesians for Lack of Discipline

CB: The only things to do at Kealakehe High School is drugs, sex, and fighting….

Kealekehe is a Micronesian school. The groups are: Micronesians, Asians, and Stoners, some Freaks. A lot of locals fall into the Stoner and Freak categories. Athletes and Band People fit into some of these groups. If you're a fighter, you'll fit in with the Micros. If you're a Nerd, you can fit in with certain Stoners.

It is so big that there are 10 or 15 different groups set up in different spots at the school. The freaks don't have a set spot. Micronesians will set up territories in the upper balconies of the school buildings. All the upper balconies have bridges that connect the buildings. They see Kealakehe as their school; they are like a gang without "strict morals." They will fight as a group, as a gang, if someone else persuades them to fight for them or carry out a revenge.

Step one: Create this situation by denying teachers and administrators the ability to discipline the students

Step two: Blame somebody else for the resulting problems

read … HSTA Innocent, Micronesians Guilty

 

Mainland Homosexuals Invade Hawaii, Get Unions

HNN: Chuck Spence, owner of the 26-room Maui Seeker LGBT Resort in Kihei, says his hotel has handled about 50 civil union ceremonies since the law was passed this year.

Reality: Broken Trust Gang finally Imposes Gay Unions on Hawaii

read … Penetrated

'Wonder Blunder' defendant gets new trial date

AP: Jury selection is now scheduled to start April 9 at U.S. District Court in Honolulu. It was previously slated for late January. Attorneys for promoter Marc Hubbard and prosecutors agreed to the change last week….

Another man accused of transporting the money as part of the deal has pleaded guilty and is cooperating with prosecutors. Sean Barriero, a 44-year-old British national who lives in Miami, is scheduled to be sentenced on May 2.

read … WonderBlunder

Court panel rejects Pflueger's appeal of state land board's $4 million fine

SA: Embattled retired auto dealer James Pflueger, who faces federal tax fraud and state manslaughter trials this year, was dealt a legal setback when the state appeals court recently upheld a $4 million penalty against him after runoff from his property damaged a beach and a pristine coral reef on Kauai's north shore.

Pflueger, 86, is charged with manslaughter for the breach of his Ka Loko Dam, which released a wall of water that swept seven people to their deaths in March 2006.

Free on bond in his manslaughter and tax cases, Pflueger sought to set aside a state Board of Land and Natural Resources penalty for illegal grading and work that led to a massive 2001 mudslide.

In a 34-page unanimous decision last month by a three-member panel of the Intermediate Court of Appeals, the judges affirmed the state board's decision.

read … Pflueger Running Down the Clock

Couple's $4M award in condo lawsuit set aside

SA: Attorney Mark Bennett, who represents the Ke Nani Kai association and board, argued in his motion that the award included a judgment against the board even though the board was not named as a defendant and association boards in Hawaii cannot be sued….

The Bevills alleged in their lawsuit that the harassment stemmed from their efforts to elect new board members and to rid the Kaluakoi, Molokai, complex of a repairman who was unlicensed and had a criminal record. The repairman no longer works there.

The jury ruled for the Bevills on all 11 counts, finding that the board of directors, the association or their agents or employees engaged in racketeering, civil conspiracy, gross negligence, malicious prosecution, abuse of process, breach of contract and negligent and intentional infliction of emotional distress, according to the jury documents….

Attorney Terry Revere, who represents the Bevills, said his clients were relieved that the primary purpose of the case — ridding the complex of a dangerous man — remains undisturbed.

"It is unfortunate that the Bevills had to bring an action because board members were too cowardly and too corrupt to do anything about the situation and instead chose to attack the victims," Revere said in a statement.

If the parties don't reach a settlement, Revere said, he and his clients are confident the jury's verdict will be restored on appeal.

read … Cowardice, Corruption

Forget global warming, Alaska is headed for an ice age

Alaska Dispatch: That may not be news to Alaskans coping with another round of 50-below during the coldest winter in two decades, or to the mariners locked out of the Bering Sea this spring by record ice growth.

Then again, it might. The 49th state has long been labeled one of the fastest-warming spots on the planet. But that's so 20th Century.

In the first decade since 2000, the 49th state cooled 2.4 degrees Fahrenheit.

That's a "large value for a decade," the Alaska Climate Research Centerat the University of Alaska Fairbanks said in "The First Decade of the New Century: A Cooling Trend for Most of Alaska."

The cooling is widespread -- holding true for 19 of the 20 National Weather Service stations sprinkled from one corner of Alaska to the other, the paper notes. It's most significant in Western Alaska, where King Salmon on the Alaska Peninsula saw temperatures drop most sharply, a significant 4.5 degrees for the decade, the report says.  

The new nippiness began with a vengeance in 2005….

read … About Reality

Gabbard Ruffles Feathers by Applying for Senate Seat

SA: Gabbard has been assigned to the Homeland Security Committee and is awaiting her other assignments.

"The smart thing to do would be to burrow into the House and master a couple of subjects related to her committee assignments," Sabato said, adding that she needs to avoid the trap of becoming a darling of the national media.

"That's always a danger sign for youthful representatives," he said. "You don't want to see them too much. You want to know that they're learning their new jobs.

"I can see how she could be popular with the national media. She's Hindu. She's a very attractive young woman. She's a combat veteran. All these things will make her potentially popular on the national circuit, but it's in her interests to resist."

Gabbard is not without her critics, including people who note that she has never finished a term to which she was elected. She left her first term in the state House to volunteer for deployment with her National Guard unit to Iraq and she ran for Congress in the middle of her first term on the Council.

Some Democrats say privately that she may have further ruffled feathers by putting her name into consideration for U.S. Sen. Dan Inouye's seat. She was not among the three finalists recommended to Abercrombie to fill the vacancy.

Related: To Stop Mufi, Mrs Abercrombie Joins the Chris Butler Cult

read … Gabbard?

Local Family Eats Mussels, Deprives State of Pork

CB: When a 24-foot boat washed ashore last week in Punaluu covered in mussels — and Japanese writing — a local family saw a tasty meal.

But state officials, who showed up on Christmas Eve to find many of the mussels eaten, saw a threat to Hawaii's marine ecosystem pork-based system.

The blue mussels, native to Japan, are considered an invasive species in Hawaii and the state's Department of Land and Natural Resources is investigating the boat as likely debris from the March 2011 Japanese tsunami as part of a scheme to load up on federal pork.

“They ate the mussels and deprived us of our pork chops,” said one spurious State official.

read … See food Diet

QUICK HITS:

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