Legislature passed bills that will ‘truly help the people of Hawaii’

from Grassroot Institute

The Grassroot Institute of Hawaii hosted lively events last week on Hawaii Island and Oahu during which staff with close ties to this year’s legislative session gave an inside look at what went down at the Capitol this year — especially regarding huge wins in the areas of taxes, healthcare and housing reform. 

At the Oahu event, Ted Kefalas, Grassroot’s director of strategic campaigns, noted to an applauding audience that Grassroot was “successful in killing every single major tax hike this year.”

But more important, the Legislature passed Gov. Josh Green’s proposed historic tax cuts, which analysts are saying will save Hawaii taxpayers about $5 billion total by 2031, if enacted into law.

Grassroot President Keliʻi Akina, who moderated the event, said: “At one point during the session, it wasn’t clear as to what would happen in terms of the budget and whether any tax cuts would be possible. … But in any case, we worked hard to steer the conversation there.”

Lawmakers also passed a bill long sought after by healthcare providers and supported by Grassroot that, if signed by Green, will exempt doctors and dentists from paying the state general excise tax on care covered by government insurance plans Medicare, Medicaid and TRICARE.

Grassroot Vice President Joe Kent said the GET exemption for private practice physicians was “something that’s like ‘Third time’s the charm, fourth time’s the charm,’ … and so we’re just thrilled that this passed.”

It was also unclear throughout the session whether lawmakers would be able to pass housing bill SB3202, which — if signed by Green — will require the counties to allow homeowners to build two accessory dwelling units on qualifying lots.

Kefalas joked that the bill had “way more than nine lives” and “was like the little engine that could.” But thanks in part to Grassroot advocacy, it prevailed.

Kefalas also gave kudos to Grassroot supporters who sent messages to their legislators in support of the bill, noting that “at one point, we actually outnumbered the opposition four-to-one in terms of support.”

One of the bill’s proponents, Jacob Wiencek, asked during the Q&A session what will happen if counties fail to comply with the law, should it be signed by the governor. 

“If they don’t figure this out by the end of 2026, then this is statewide — there’s no ifs, ands or buts about it,” Kefalas said. 

TRANSCRIPT

5-15-24 2024 Hawaii legislative wrap-up, Oahu, featuring Keli‘i Akina, Joe Kent and Ted Kefalas

Keli‘i Akina: Aloha mai kākou, friends. Welcome to the Grassroot Institute. Aloha. I’m so glad you’re here today. We’re gathered to take a look at our state legislature wrap-up for 2024, and I’m just delighted that you’re present with us.

My name is Keli‘i Akina, president of the Grassroot Institute, and I’m pleased to have with us today two of our outstanding staff members — the head of our division that handles intellectual capital, or all of our research, as well as our executive vice president: Joe Kent. Give Joe a hand. 

And our on-the-ground lobbyist down at the Capitol who works tireless hours during the session building relationships with our legislators and giving them good reasons to do good legislation: Ted Kefalas.

This was an historic session for the Grassroot Institute. We — along with many friends with whom we collaborated, legislators, the governor himself, as well as other organizations — brought together packages of legislation that will truly help the people of Hawaii. 

And it’s an exciting time, because the people of Hawaii are going to benefit from the results of this legislative session in very tangible and practical ways in terms of housing, medical care, taxes and the bottom line: how much money we keep in our pockets. 

So on balance, I can say that I’ve not seen as successful a session for the people in the last 10 years as we’ve seen this year. And that’s very exciting. 

What we’d like to do is give you an insider’s glimpse as to what took place, what results happened and how they came about — what role Grassroot Institute played along with other organizations.

Everything we do proceeds from a set of principles that we have instilled within our mission statement. We call it our mission because it’s ours inclusively: kākou. One of our mottos is “E hana kākou” — “Let’s work together.”

So together, let’s work toward, first of all, individual liberty right there in the middle. That comes straight out of the Declaration of Independence. We exist in order to protect our individual liberties and to expand liberty.

The top principle here, economic freedom, that’s the right of individuals and businesses to transact with others without the government unduly interfering. 

And the third principle, limited accountable government. We’re not against government. We believe government can be a very good thing for the people. But it has to be limited to its fundamental purposes and to the constitutional rules, and it must ultimately be accountable to the people. 

Grassroot Institute exists so that these principles will be propagated here in the state of Hawaii. And they’re just absolutely essential not only to the well-functioning of a government, but to the freedom that we all experience.

Now I’d like to ask Ted, as you’ve worked on the front lines leading our team in the legislative session down at the Capitol, what are some of the highlights in terms of the kind of work the Legislature did this year.

Ted Kefalas: Yeah, I appreciate it. I think, you know, just to kind of look over the session as a whole, every year there are close to like 3,000 bills that are introduced. Which seems absurd, right? I mean, I just can’t think of 3,000 things that need to be changed here in Hawaii. I mean, there’s a lot; but 3,000 is crazy.

Of those, there’s only 260 some-odd bills that passed. So chances are, if a bill is introduced, there’s very slim chance that it even gets to the end and gets to the governor’s desk. 

We were tracking hundreds of bills. We actually ended up testifying, as you can see, we submitted 165 testimonies. It felt like — and Mark can probably attest to this, our communications director — it felt like every other day we had like five, six, seven testimonies that we were just trying to keep up with. 

But we were able to, and you know a lot of credit goes to our team to be able to put that stuff together.

We had four model bills passed. That’s huge. Keli‘i mentioned it earlier: Not a lot of groups get even just one model bill, and so to be able to get four of ours across the finish line really goes to show that we’re changing the kind of narrative, and we’re changing the thought process behind a lot of our legislators.

We’ll go into a lot of these different model legislations today, but I do want to just take a second and give a round of applause for our team at getting those things across the finish line. 

Akina: Good job.

Kent: Yeah, and I’m sorry, just to underscore once more: Grassroot has existed for 20 years, and I don’t think we’ve passed a single bill during that time. Last year — except last year — we passed one bill. And we were, you know, dancing on the ceiling. 

Well, now we’ve passed four bills. So that’s amazing. Yeah, there’s a sea change happening, I think.

Akina: Joe, we really came alongside of a larger number of bills. And actually, there were many that did pass where we did have our fingerprints on, as well as many bills that were stopped where we were in the lead. 

But of all those bills, what would you consider one of the heavy hitters to be? What major bill was passed that’s going to the governor now and will actually result in major changes for the people of Hawaii?

Kent: Oh, well, the tax cut. 

Akina: Yeah.

Kent: There’s a major tax cut. They called it the Green Affordability Plan. But actually it’s the biggest tax cut in the history of the state. And if you total all of the cuts in future years, it’s about $5 billion that we’re talking about, going, if you rack it up into 2031.

So that means, let’s say — I’ve got a little calculator here — let’s say that you have, you know, your income is around $88,000 a year. Next year, that’s $500 that you’re saving, which doesn’t sound like much. But then the year after that, you save $1,000 in taxes. The year after that, you save $1,500. All the way until 2031, you’re saving $3,000 on your tax bill. And if you rack all of that up, that’s $18,000 that you saved.

Now, if you, you know, have a family of two breadwinners that you both make $80,000, then that kind of doubles that tax savings. And in total, this is, this is a big deal because in the past, Grassroot Institute has celebrated when we’ve gotten tax rebates. You remember those? You might get a dollar rebate or $100 or $300 for one year. 

But this is a tax cut moving forward, and that’s going to mean a lot, I think, for the economy. And it’s a really green light for our economy. I’m hoping it can actually generate more economic revenues in the future. 

So this is just fantastic to have, you know, the Legislature, legislators embracing this. It helped that it’s an election year, by the way, but that’s a good thing, you know. We want them to cut taxes.

Kefalas: Yeah, if I can just add on to that though. I think it’s important to note. So before this bill, we had the second highest income tax. If you’re somebody that’s just making the average amount — it’s $88,000 a year — you were paying the second highest income tax. 

And for politicians that constantly say, “We want to try to lower the cost of living, we want to try to lower the cost of living,” this was the most immediate way that they were able to do that. 

So we go from the second highest income tax to now the 40th. There’s only 42 states that have an income tax. So we went from the second highest to now the third lowest, which is a huge shift in the thinking of our legislators.

Now they’re no longer trying to be dependent on income taxes for revenue; they’re trying to find different avenues. But what that ultimately means is it’s going to be more money in your pockets. 

And this is a tax cut for, you know, pretty much everybody. This isn’t just targeted at a certain demographic or a certain group. This is going to be across the board, because it’s shifting the tax brackets and doubling the standard deduction.

Akina: You know, I kind of have to pinch myself to see whether I’m dreaming or not because it’s hard to believe, hard to fathom. But this is going to be a huge tax cut. And as Joe pointed out, it’s going to move us from being one of the most taxed states in the nation to one of the least tax states in the nation. And people are going to feel that.

A very important conversation took place before the bill had passed. I had the opportunity to talk with our governor. And while we don’t agree on everything, I really believe we have to give him praise where praise is due. And he has been behind these tax cuts, and so we have not withheld that praise. We appreciate that very much. 

But in talking with him, I explained to him that one of the problems with legislators who oppose the tax cuts is their understanding of economics. Many of them believe that taxes are the only way to increase government revenues. So if you want more housing, more services, more money that the government can spend on the people, you need to tax the people.

I shared with the governor one of the economic lessons that we teach at the Grassroot Institute called the Laffer Curve, in which money that is raised from the people ultimately goes as taxes to fund the government. 

So if you give people the opportunity to save more money, they can spend more money. If you give businesses the opportunity to save more money through lower taxes, they can spend more money. 

And the result of that spending is economic activity. And economic activity ultimately results in more money to tax for the government. So the government actually raises more money by reducing the taxes. 

This is a phenomenon that has been seen throughout the country and across the world, and Gov. Green said he agreed with us on that. And so when you get a chance and see him, tell him, Grassroot compliments his work on the taxes. It’s good for Hawaii.

Now, at one point during the session, it wasn’t clear as to what would happen in terms of the budget and whether any tax cuts would be possible because legislators were talking about the fact that the wildfires on Maui and the devastation of Lahaina would take all of the available money in order to deal with. 

They weren’t aware that huge sums of money were going to come in from the federal government, which did happen. But in any case, we worked hard to steer the conversation there.

And so I want to ask Joe to share a little bit about what went into producing the state budget this year and what were some of the wins there.

Kent: Well, it’s a big budget. It’s $10 billion. Just a couple years ago, it was $8 billion. I mean, I remember in the, during the COVID era, it was around $8 or $7 billion. So this is a big budget, and they gave $1 billion of that to Lahaina, though. 

They didn’t give it to, necessarily, Maui County. They gave it straight to, most of that went to the hotels for these $1,000-a-night stays for survivors of Lahaina, of course. 

And we’ve seen a lot in the news about how a lot of that money is going to pay for empty homes, you know, empty units, and they can’t find the right units for the right people and so on. So that’s a ton of money right there. 

There was so much money that was needed for Lahaina that at the beginning of session, they said, “We’re gonna cut the whole budget by 15% — every department, every, you know, every, …” — they were talking about the Department of Education, a 15% cut, you know, across the board. And then magically they said, “Oh, never mind, we don’t have to cut.”

I was like, what happened? And I think what happened is they forgot that they had put all this money aside in different pockets. One pocket was the rainy day fund. They were putting in $300 million there. Another pocket was the employee retirement system. They were putting, you know, $100 or $200 million there.

So they’ve, I guess, found these different pockets of money that they didn’t necessarily have to tuck away for a rainy day, and they said, “Today is the rainy day, let’s use it right now.” And so that’s basically what saved the budget. 

But, you know, when I was doing projections out for the next five or six years, they were projecting a $10 billion budget surplus in five years.

And so that was part of the argument of why these tax cuts went through is because the surpluses that they had were like gonna double the size of the state budget. I mean, can you imagine in five years them spending double the amount that they’re spending today? It would just be too ridiculous. 

So that’s partly why the tax cuts went through. 

And actually, the tax cuts might do a lot more for the economy than some of this spending can because as we’ve seen, there is a lot of wasteful spending on the recovery efforts too. 

So we want it to go to the right place. The right place is with the people, not necessarily with the government controlling it.

Akina: If you’ve been reading our materials, you know that Grassroot has really doubled down on doing things that will influence outcomes in government. And that’s partly because of a five-year plan that we’re in the midst of. 

Our basic strategic plan is to become the most influential voice in public policy in the state of Hawaii. We’re about three-fifths of the way through that, and we’ll have a new plan in 2026.

One of the things that is important in becoming more influential is influencing the way people think. There are a lot of problems here in Hawaii that don’t get solved because our leaders are thinking about them in the wrong way. So part of our growing in influence is to knock down the wrong ideas about problems and replace them with correct ideas. 

Take, for example, the problem of housing. The supply of housing is low. The cost of housing is through the roof. People are leaving the islands because of this, and the University of Hawaii has just reported that the result of people leaving Hawaii is that our economy is going to falter. So there’s this chain reaction because of the housing problem. 

But the government for the last many years has been pursuing the wrong solutions. Everything from building government tenements where the government becomes the landlord of people who can’t afford housing, to ideas that have been outdated and proven wrong. So we have been trying to knock down the wrong ideas. 

One idea we took aim at was the belief that the cause of our housing crisis is a lack of land. And Grassroot, through its media, through its communication with leaders and so forth, has been successful in moving many leaders away from that belief to the truth that we actually build on only 5% of the land mass in Hawaii, 95% is not built on. So it’s not the lack of land that causes the housing shortage.

Another belief: outside buyers. Many legislators believe this is the cause of Hawaii’s housing crisis on the basis of evidence like this: One leader said, “I drive around Kakaako at night and I look up and I see lights off; that tells me that these must be mainland buyers.”

Now that’s not very rigorous scientific data, but it translates into policy. 

So we decided to produce rigorous scientific data and study this problem in every county in the nation, create a methodology and apply it to Hawaii, and we discovered and reported to the Legislature and our leaders that that’s just not the case. Outside buyers don’t have that impact.

So then what is the cause? We were delighted when the governor in his first emergency declaration on housing virtually paraphrased Grassroot Institute and reported that the problem — the major problem — in the scarcity and cost of housing is government regulation. And so he himself promoted the cutting back of government regulation.

The University of Hawaiʻi Economic Research Organization came up with the same result: government regulation. And UHERO just came out with a report that tells us that if you buy a condo in Honolulu, maybe $750,000, half of it — $375,000 — is the cost of government regulation. 

People are starting to get the point. Do you see how knocking down bad ideas clears the way for actually solving a problem?

So at this Legislature, not only did we see bad ideas knocked down by Grassroot Institute; we saw a focus on the real problem. 

And I want to ask Ted to talk about that with respect to housing. There were two bills in particular that focused on some of the government regulation that actually was in the way of building houses.

Kefalas: Yeah, I want to talk first about the HB2090. It’s the adaptive-reuse and mixed-use bill. But first, I just want to highlight one thing that Keliʻi mentioned about regulation. 

UHERO did a study, and they looked at regulations throughout the country and compared them with each state. Hawaii was by far the largest regulated state, and I wish I had a graph to show you guys because it was almost double any other state when it comes to regulations and limiting the amount of housing that can be built. 

But one of the things that we really wanted to focus on is this adaptive-reuse bill. Essentially, after COVID and the pandemic, you’ve seen a lot of businesses starting to go remote, working from home. We’re seeing a lot of retail closing, unfortunately, as people are shopping online. So what can we do with those buildings that are already built?

Well, let’s try to convert them into housing. That’s a lot easier said than done, unfortunately, because of these regulations. 

Ask folks like Christine Camp that are trying to revitalize downtown, and she can’t do it because she’s constantly running into roadblocks from the county. So what this bill does is it would allow them to actually get this work done.

And it wouldn’t have to follow the specific rules and regulations set out by the county. Instead, you’re following the International Building Code. So it’s not any less safe. There’s no, necessarily, issues with it. But in the past, the city of Honolulu, for example, has put additional regulations on top of the International Building Code. 

So this is something that will take effect immediately. I’ve talked with folks in the county as well as developers, and I’ve heard there are upwards of 10 projects right now in downtown Honolulu that are just waiting on permits.

And with this taking effect immediately means that those projects will be able to get started immediately and be able to get those houses conv … — or get those buildings converted into housing and get people into them hopefully sooner rather than later. 

Akina: Ted, along with the adaptive-reuse bill, we had a great bill with regard to allowing people to add cottage homes or what we call accessory dwelling units. Tell us a bit about that.

Kefalas: Yeah, so the ADU bill, it was SB 3202, and some of you guys probably saw it in the news a lot. It was, I would say, you know, if not the most controversial bill, probably the second most controversial bill behind the legalization of marijuana. 

I think that for us, our thinking was to try to allow more of these accessory dwelling units.

Right now, for example, in Honolulu, we’re limited to, you can have your main house and you can have one ADU on that property. That’s it.

But there are a lot of properties that have a lot of empty, open space. So why are we limiting the amount of accessory dwelling units in that area?

You know, this is areas that already have houses built. These are already established neighborhoods. You know, why would we — it seems like without this bill, you’re trying to put a preference on building in the environmental lands or the conservation lands, which a lot of people can’t get behind. So let’s try to build within our current residential areas. 

I will say this bill had, you know, way more than nine lives. Every time I turned, there was some, you know, I had heard that the bill was on its last leg. And I talked with, you know, the lieutenant governor’s office and they were like, “Oh, the bill’s dead; nothing’s going to happen; sorry, you know, we’ll try again next year.” I talked with Senator Schatz’s office, same thing. 

Every roadblock it came against, everyone thought it was dead, and somehow it continued on. It was like the little engine that could almost. 

And we are just so proud of the work that we did. We worked with a lot of different stakeholders in this, groups like Housing Hawaii’s Future, Hawaii YIMBY. I mean, there are just too many to name, quite honestly.

But we really were active in trying to change the Legislature’s mindset. These accessory dwelling units are units that are smaller. They have a much smaller footprint. And it’s something that we believe is going to be more targeted towards local families.

These aren’t these mega-million-dollar mansions. These are smaller units for locals that can afford it. 

So the counties have two years to implement this law. And if they don’t, then the bill applies statewide. And so that means that anywhere that there is residential use, you can put a second accessory dwelling unit.

It’s also important to note that there are counties already moving towards this. Kauai already allows two ADUs, in some cases, three ADUs. So this isn’t some unheard of housing policy. And that’s something that we do believe can help increase the housing stock, because ultimately, there’s no one silver bullet solution to this. We’re going to have to try to attack this from a lot of different angles. So looking at the adaptive reuse, looking at more ADUs, and just trying to streamline the process for folks.

Akina: You know, Ted and Joe, we heard a lot of misinformation and a lot of fear inspired by that misinformation from opponents to this bill. 

One of the things that was said commonly is that this will take away the character of a neighborhood. And they would talk about Manoa, for example, and say that every lawn will be filled up to the max with houses, and we will no longer have paradise. 

But it’s important to understand that the ADU bill is not the only legislation that governs the use of land. And the ADU bill leaves room for the counties — let me hand off to you, Ted — to be able to determine its own rules in terms of the administration and structuring of ADUs.

Kefalas: Yeah, so there are a few different — there are two different paths, specifically, that the counties can take. And, you know, it gets kind of wonky to get really into the nitty gritty of it. 

But essentially, so the counties can adopt ordinances that allow for two ADUs. Or if they wanna take a different path, they can essentially create like an ADU zone, decide where these ADUs go. But then they also have to increase the amount of apartments. 

They have to — there’s a whole long laundry list of stipulations that they have to follow. And actually it would create more housing if they go the second route. 

But, ultimately, you’re still allowing the counties a choice. The counties still have control over building heights and such, and so you’re not going to end up with these massive skyscrapers in the middle of Hawaii Kai or Kahala or Kailua. You’re going to end up with, again, more of these smaller-footprint ADUs. But it’s gonna be up to the counties to implement those laws. 

And again, the counties will have two years to implement it. If they don’t — if they continue to drag their feet like they’ve been doing for decades — then this is something that will be implemented statewide. 

And that’s one of the reasons why we put that into the bill because, again, the counties have had decades to do this and address housing and unfortunately they haven’t. Whether it’s pressures from constituents, pressures from outside groups. You know, regardless, ultimately we need housing now. And so we’re really glad that the state Legislature took it upon themselves to pass this bill. 

And again, you know, it was a team effort from everybody from the legislators that introduced it to the governor, which I have heard that he is planning to sign the bill as well as our other housing bill. So really excited about that and look forward to getting those implemented.

Kent: The sense I got from legislators, though, was that if it wasn’t for Grassroot Institute, though, blowing the winds in this direction, then they wouldn’t have gone this direction, you know?

Kefalas: Yeah, there were times, like I said, this thing had multiple lives. And, you know, at one point during the end, there was a huge amount of negative emails that were getting sent to legislators. 

And some of you guys are on our email list or on our Grassroot Ohana list, where we actively were trying to get people to fight against that and reach out to their legislators, telling them that they’re in favor of this bill.

At one point, we actually outnumbered the opposition four-to-one in terms of support. So, you know, the pendulum really swung. 

At first, legislators were getting these letters and emails and they were saying, “You know, I’m getting a lot of negative press from this and I don’t think we should go forward with it.”

And then we sent the email blast along with a lot of other groups that sent their email blasts. And like I said, we outnumbered them four to one.

Kent: Is there anyone here, by the way, who might have filled out one of those forms to contact their legislator on our communications?

[Many people in the audience raise their hands.]

Akina: All right, we applaud you.

Kent: Thank you.

Akina: You made a difference. 

You know, this would be a good point, which should take a look at exactly how the process was influenced by Grassroot. Joe said that many legislators recognized that Grassroot was influential in bringing about the results. 

We have something called advocacy. It begins way in the beginning with our research, looking at what needs to be done, searching for best practices across the nation, knocking down the wrong ideas and replacing them with the understanding of the true causes. That’s what our intellectual capital division, led by Joe, starts with. 

And they produce media, everything from digital media that goes on Facebook and Instagram and TikTok, to thick, detailed reports.

Those are handed off to Ted and his team on the ground as he quarterbacks the team in reaching out to legislators on a personal level. 

So I’d appreciate it, Joe and Ted, if you could give us a little glimpse into how that took place this session.

Kefalas: Yeah, well, we take a lot of different approaches to advocacy because, you know, there’s not one-size-fits-all. 

So, you know, we originally, we created, as you mentioned, a report. But we actually created a website that was called “Homes for our Ohana.” And it just outlined the bill, gave everybody some quick FAQs. because a lot of times if you’re reading this stuff, you can kind of build up a monster in your mind and it makes it worse than it really is. So to be able to kind of outline all of this stuff, show people what it really is about, I think really helped and kind of eased some fears.

We also, as we mentioned, [have] our Voter Voice program, and a lot of you guys used it. This was a huge way for us to be able to convert a lot of our advocates into, you know, writing into their legislators. 

I’ve had multiple conversations with legislators that, you know, one in particular stood out to me and he said, “Gosh, you know, I just got seven letters in the past week on this one issue, and I think I’m going to have to vote against this; I’ve never gotten seven letters.”

And I thought to myself, seven is not, that’s not a lot. You know, we’re consistently, we put in, I want to say, 2,400 letters this year on our various issues. And that makes the biggest difference. I can talk until I’m blue in the face, but they know where I’m coming from.

If they’re getting constant communication from their voters, from constituents, that is really going to move the needle for them. 

But then we also, as we mentioned, we came out with this report, “How to facilitate more home building in Hawaii.” It outlined a bunch of different opportunities for Hawaii to reduce regulations and build more homes at no cost to taxpayers.

We also wrote this article in the StarAd, it’s an op-ed, and we wrote it with Hawaii Appleseed. And for those of you guys that know Hawaii Appleseed and know us, you know that we don’t share a lot of viewpoints a lot of times. But to be able to partner on this issue showed legislators that these were groups coming from different sides of the aisle and had different viewpoints.

This is part of our “E hana kākou” approach. 

Quite literally, we always want to find partners in these different issues, because it makes it so much easier to be able to have other groups to work with and support each other and brainstorm. 

Many minds will make light work, so we were very excited to work with them, and I think that that also hit the point home to legislators. 

We also were in charge of organizing this letter to the housing chairs, which actually went out to all the state legislators. 

As you can see here, I mean, you have groups like Housing Hawaii’s Future; the Chamber [of Commerce Hawaii]; Habitat for Humanity; I mean, Mana Up; Tori Richard; Appleseed, I mentioned them earlier; Hawaii YIMBY; all the different chambers.

I mean, it was a really diverse group of organizations, companies that are local to Hawaii here. And, you know, make no mistake, that also helped move the needle here. 

And then finally, next to last, Dr. Akina, Joe, myself, you know, Jonathan Helton from our team, Malia Hill have all been on the radio, on the news, trying to talk about this and get the information out. 

And then also we spent a lot of time testifying, obviously, kind of the conventional old school method. 

I want to also just play this video for you guys because on the “Homes for Our Ohana” website, again, we wanted to create this explainer video, and I want to give a shout out to our marketing guy, Brenner Danielson. He did an amazing job with this and just helped, again, try to show that this isn’t a boogeyman. That this is something that’s really going to help housing. 

So I’ll just play it, it’s a short two-minute video, and just so you guys get a sense of some of the good work that we’ve been doing.

Video plays; voice of Brenner Danielson: Hawaii has a housing shortage, and that’s partly because our laws have encouraged the creation of large homes that are unaffordable for most local people. But if we change those laws, we could put a dent in the housing shortage and put homeownership within reach of more local families. Let me explain.

Because land in Hawaii is often the biggest portion of the cost of a home, people build large homes to maximize the lot’s value. 

For example, in Maui County, the minimum lot size for a single-family home is 6,000 square feet. That means if someone did build a more modest 1,200-square-foot home like this, it’s still going to be expensive because that 6,000 square feet of land is expensive.

But what if you could reduce the minimum lot size to 2,000 square feet? 

Then it would make more financial sense to build a smaller home because it would be more affordable. Smaller lot sizes would also mean you could have two or three smaller homes instead of one big one, which could help younger families wanting to stay in Hawaii, with kupuna looking to downsize.

But what about increasing housing in areas where housing already exists? 

One way to do that is with ADUs. ADU stands for accessory dwelling unit, which is essentially just a smaller second home on a single-family lot. It can be attached to an existing home or detached like this.

Most of Hawaii’s four counties allow you to build one ADU on land zone residential, but the rules vary by county. But why do we stop at one if some lots could support more than that? 

The point is, allowing more than one ADU per lot would increase the supply of housing, support multi-generational living and wouldn’t change our existing neighborhoods.

Another way to increase housing is through lot-splitting. For example, if you’re fortunate enough to inherit a plot of land with a small home on it, currently your only options are to keep or sell it. 

But what if you could split the land into two different lots without going through a long government approval process? Then you could make some money while also making land available for someone else to build a home. 

Keeping Hawaii’s natural treasure and environment is important to everyone, but so is providing housing. If we could implement these changes, more housing could be created in areas that already have homes, instead of taking away more land from conservation or agriculture.

HB1630 and SB3202 would make these reforms shown in this video a possibility. To learn more and support these bills, visit homesforourohana.com. And if you support these changes, be sure to let your legislators know. Mahalo for watching.

Kefalas: Now, our methods of advocacy, you know, we concentrate a lot on legislators, but it’s not just the legislators. It’s also the general public because if you can change the mindset of the public, you can really see that shift in legislators. So one of the things that we’ve prioritized this year is our Instagram and our social media presence.

And so I wanted to play a couple videos for you guys from our Instagram. And you can actually, if you’re not following us right now, if you have an Instagram, you can scan the QR code and it will take you straight to our page. But just a couple quick videos so you guys can see some of the work that we’re doing on that platform.

Video plays, voice of Kent: Look all of our bills passed! [instrumental]

Kefalas: And this was a April Fools’ Day post that we had. 

Video plays, voice unknown: I love big government. I wish I paid even more money to taxes. Join me in the bread line, comrades.

[Laughter]

Kefalas: So, I mean, as you can see, we’re just trying to relate to the everyday public. We’re trying to make these things easy to understand. A lot of these are in kind of meme form so that people can kind of laugh at it, because quite honestly, a lot of the things that happen at our state legislature are laughable. 

But we wanna just make it so that the average person can look at our page and see what’s going on. 

A lot of times social media, too, is, you know, that’s where you get the most up-to-the-date information. And so, you know, that’s something that we’ve grown our Instagram followers. Brenner, what are we up to now? 

Danielson: Twenty-six-thousand.

Kefalas: Twenty-six-thousand people that see our stuff, and that’s on top of the 40-plus-thousand people on our email list. So we are consistently hitting a large portion of the state whenever we come out with any sort of video, report, email update, that kind of stuff.

Kent: Well, and a lot of those videos hit millions too. I mean, it goes well beyond the 26,000 or so. But, yeah, big credit to Brenner for upping our game on social media.

Akina: Great job. Terrific. Now, one of the other areas of great cost to the people of Hawaii is medical and dental care. And this year we saw some terrific progress in regard to that, particularly in our campaign to stop using the GET on Medicare, TRICARE and Medicaid.

Joe, you wanna tell us a little bit more about that?

Kent: Yeah, I want to make it quick, because of time, which is sad, because this is such a great policy to exempt the general excise tax on medical bills for Medicaid, Medicare and TRICARE. And this is something that’s like, “Third time’s the charm, fourth time’s the charm.” They’ve been running at this for years, led by the Hawaii Physicians Shortage Task Force, Dr. Scott Grosskreutz, on the Big Island. 

You know, the neighbor islands — my dad lives on the Big Island, and he said, “Joe, if you’re going to do this think tank, please research why it’s so hard to get a doctor on the neighbor islands.”

He wants a doctor, and all the doctors he sees in Hilo and on the Big Island, a lot of them are just on the verge of retirement. They’re on the verge of closing. I think a third of docs across the state are just about to close because of, you know, they’re aging out. And the private practices tell us that they can’t make it in this business because of the tax.

Their margins are a lot slimmer than people think. And on the nonprofit side, the nonprofits like Kaiser and so on, the hospitals, don’t have to pay the taxes, but the private docs do. 

And so we’re just thrilled that this passed. I think it had to do with politics, though.

There was a key legislator who, someone was running against them on this issue, and it pressured them to pass the bill. So yes, politics matters.

Akina: This session, some of our wins stood on the shoulders of previous work. In particular, last session, you’ll recall that we went to bat for the right of people in Hawaii to use medical services from doctors who are licensed on the mainland. 

And Hawaii joined formally the [Interstate] Medical Licensure Compact along with 43 other states. That was huge, and it’s going to come into effect starting next year. 

But what about other medical professions? We’ve been working on those as well, particularly nursing. We didn’t get everything we wanted, but there was a major breakthrough in terms of that.

Kefalas: Yeah, I think, you know, unfortunately we tried to introduce the Nurse Licensure Compact this year. Similar to the physician compact, it just allows — if you are a nurse in a different state, for example, like Arizona, New Mexico, you want to move to Hawaii, right now you have to go through a multi-month-long process just to get a license. So, you know, that inherently stops a lot of people from coming here.

And to us, we thought, well, we’re dealing with a healthcare shortage, and why are we closing our doors to healthcare providers? Again, we were able to pass that nurse or the doctor compact last year. But this year, unfortunately, they were not willing to pass the Nurse Licensure Compact similarly. But we did get a temporary nurse licensure process.

So right now, it allows for a nurse that wants to move here to get a six-month license and, hopefully, by the time that that temporary license is finished they’ll be permanently licensed here. 

So again, it’s not like the perfect solution but it is something that we do hope will help in terms of getting rid of some of those government regulations and restrictions that are hurting our local residents.

Akina: Very good. Now, Ted, in order to win, we not only play offense and take bills across the line — and you’ve done a great job in leading the team at the legislature in that — but we also play defense. 

We have to knock down quite a few bills that are coming the other direction. You want to talk about some of that work?

Kefalas: Yeah, absolutely. And I’ll just quickly touch on these bills because we were successful in killing every single major tax hike this year. 

[Applause]

So you see on here there was no shortage of proposals. I mean, things like they wanted the state to now tax your property. They wanted to increase the conveyance tax. They wanted to create a carbon tax. They wanted to increase the transient accommodations tax because, you know, it’s not high enough, apparently. And then they also wanted to create a “green” fee.

Gov. Green’s been pushing this for years to charge our visitors $25, $50 every time they come here. But there’s this, you know, they forget about all the residents that have left and that come back for, you know, their auntie’s birthday or a celebration with tutu. And it just — you’re going to end up having these former residents that are paying hundreds of dollars just to come back and visit.

And so we didn’t feel that that was the right way forward, and we’re glad that the legislators saw it the same way. 

Again, it helps that this is an election year, so very rarely will you ever see a tax increase in an election year. But we were very happy that they didn’t move forward with any of these proposals this year.

Akina: And that’s great. Well, that’s basically our presentation to you. Haven’t these guys done a great job? 

[Applause]

And there were many more bills that we touched upon. Joe’s going to run down a little bit on that as some of you make your way to the microphone now.

I want to invite any of you who’d care to ask a question while the team is still up here. Go ahead, the microphone is over here, and just come on up to it.

In addition, as you’re at your table, would you take one of these cards that is here? If you’re not receiving our Weekly Report, please fill this out. We definitely want to get that to you free of charge. If you want to give any comments, we’d like that. Or if you’d like to join the family of financial supporters.

By design, in order to stay independent, we do not take or seek money from the government or political parties. We are your independent think tank, and we need your support. So we would love to have you join us. Just simply fill out the card.

We also have a donor society called the E Hana Kākou society, which gathers for social functions and dinners, and you get behind-the-scenes information. 

When you’re done with your card, Sean over here at the door will be very glad to receive that. So please, come on up to the microphone if you have any questions.

And Joe, were there a few more bills that we touched upon that you’d like to say something about?

Kent: Yeah, there were more, but actually, I want to talk about something that’s not a bill. This was a policy and administrative law which was a big deal this year — the cryptocurrency regulations in Hawaii. They lifted all of them, which is just amazing. Hawaii went from being the worst state of the nation for cryptocurrency now to one of the best because of that. 

And so that was not a legislative thing. That was sort of convincing one bureaucrat, basically, to change her mind about this. And that was a lot of behind the scenes work. 

There’s certainly a lot of other things to talk about — that insurance [tax] hike, we’re gonna see that again. 

Actually, we’re probably gonna see all of these again. So stay tuned. But the insurance one, that’s a big problem because the insurance market in Hawaii is just blown up.

We’ve got some condos, which are seeing huge insurance hikes of what, 500%, 1,000%? They didn’t repair their elevators, they’ve got huge water losses, old pipes and so on. And, I know, we can solve it by raising taxes, right? 

Well, that’s basically the main proposal for this. We need to research this further, though.

We’re going to see it again around the corner. So, that’s all I’m going to say about that.

Akina: That’s more what to expect in coming weeks as you’re on our mailing list and so forth. We’ll be talking more about that. 

Now, Rob, thank you for coming up to the microphone. It’s all yours.

Rob Burns: OK. So you have up there state federal income tax for the property? It’s property tax.

Kefalas: The state property tax?

Burns: Yeah. But what about the city? Didn’t it go huge?

Kefalas: So the city right now is going through their process of setting rates and whatnot for the property taxes. But this would actually be on top of the city’s property taxes. The state wanted to take their piece of the pie on top of it and try to add it to their revenues.

But thankfully, again, I think they had second thoughts about that.

Burns: Well, good. And I really appreciate your diagrams on putting multiple houses on same-size lots. I have 13 acres. I got one house on it. And they don’t want to change that.

Kefalas: And you’re not alone.

Burns: Yeah. I mean, a bunch of guys got together. And we’re found capricious and arbitrary.

And still, it’s what it is. They’re not opening it up and saying, well, we can put at least two or three. You know, I mean, it’s crazy.

Kefalas: Yeah, I mean, you know, you have a few different options when it comes to housing, right? You can either build out and build into, like I said, the environmental land, the conservation land. You can build up, you know, in the cities and build these massive skyscrapers, or you can build in and try to create like more ADUs, buildings in our already-residential areas.

And so that’s what this bill would do, is just trying to fill in those areas that have acres, or and you know there’s even some smaller places that have like 10,000 square feet. A 10,000-square-foot lot can still fit multiple units …

Burns: Definitely.

Kefalas: … and so to be able to address our housing shortage through some of that. Again, it’s not a silver bullet, but that’s why we want to look at all of these different solutions, because it’s going to take multiple different angles to be able to solve our housing shortage.

Akina: Thank you, Rob. Thank you. Good question. Appreciate it. We have somebody behind you here.

Why don’t you introduce yourself?

Jacob Wiencek: Aloha, my name is Jacob Wiencek. I just wanted to say thank you to Grassroot Institute and everything you guys have done especially for affordable housing. SB3202, HB2090 — those were big wins. Those were important. 

But I want to grab onto something that you brought up earlier, which was the counties have just been slow-rolling this, to put it generously. So now that we’ve, you know, crossed one line with getting these bills hopefully signed by the governor soon, how, you know — what should we be on the lookout for at the county level for making sure these actually get implemented over the next two years, and that we’re not, you know, two years later it’s like, oh, didn’t get done, now what? So that’s primarily what I’m worried about.

Kefalas: Yeah, no that’s a great question Jacob. And I think I saw you at the testimony too, so I appreciate you being there and testifying in support. It definitely made a difference. 

Ultimately, you know, like I mentioned, it does come down to the counties. We’re giving them two years.

Essentially, if they don’t figure this out by the end of 2026, then this is statewide. There’s no ifs, ands or buts about it. And so we’ve kind of put that shot clock on them. Without it, they could continue to kind of slow roll like they’ve been doing.

And so there will probably be legislation. I know at the county level in Honolulu, both Council Chair Waters and Vice Chair Esther Kia ‘āina were adamantly opposed to this bill. But in our conversations with a lot of the other Council members, they have been open to it. 

And we’re hoping that that two-year implementation period kind of tells them, “Look, you’re in control of this right now. In two years, you’re not. So it behooves you to, you know, remain in control and put forward legislation.” So that’s our hope, that they see it that way.

Akina: Thank you, Jacob, for the question. Appreciate that. And we have another question after you. Thank you.

Calvert Chun: Hi. I want to ask a question regarding building permits. I know that’s on the county level, you know, not down in the state.

Actually, before I say that, I just want to say that Grassroot has been doing a wonderful job. Thank you very much. 

Akina: Thank you. Thank you very much.

Chun: Really appreciate it. So on the building permits just to give you, I mean, like why does it take so long? And because it takes so long, construction costs keep going up.

Akina: Great question.

Chun: Yeah, OK, just an example: My wife and I own a house up in Ewa Heights. So in 2020, we built a 850-square-foot on top of the two car garage. It took me 20 months to get the building permit.

OK, I paid about $260,000. I asked the contractor just last week, how much would it cost today? And he said with his costs, with building permit time, all that, maybe like $370,000. 

So regarding the ADUs, which is a good idea, if the cost per square foot just keeps climbing, it’s not going to work as well.

Akina: You’ve got a great question, and we talk about that all the time at Grassroot.

Kefalas: Yeah, I think permitting is probably one of the biggest issues that we hear from folks you know at the county level, specifically here in Honolulu. 

You know, there’s a lot of things that the county is doing. Number one being they’ve implemented a new software that will hopefully speed things up. But ultimately it’s about not needing a permit for every little thing.

The amount of times — they passed a few bills at the county, one being, I believe it would allow for self-certification in certain cases. 

There was another that said you don’t need a permit if you are making a repair less than $10,000. 

Again, it’s about pulling people out of line. We don’t need to permit every single little thing. 

All too often, you know, I hear that just a permit for a fence — if you want to put up a fence in your house — that takes almost just as long as building a massive three-story, four-story mansion. And these are things that you should just be able to look at it and say, “This is a fence. Check. Done. Permit. Given.”

Instead, we sit there and we wait for 20 months to make sure that, oh, well, is this fence the right size? Is it painted the right color? Is it this? Is it that? Is it that? I mean, we have to put these things into perspective.

So we’re — I’m glad that the county is starting to take baby steps towards that, but it’s not enough. And ultimately we need to find more ways to try to pull those people out of line.

Akina: Very good, thank you. Thank you for your question. And we have one last question from Annie.

Annie Burns: Hello. I don’t even know if it’s a question. I might be free associating, so please help me out here. 

When you mentioned the tax hike and insurance, it just, you know, made things go in my head and it might not might not even be related to that. But remember the Big Island, remember the volcanic eruption and the houses that were ruined?

And somewhere I remember them saying that the state insured those houses. So that just sounds crazy to me that that is a live volcano, but the state is insuring it. So now we have Maui. 

Akina: Right.

Burns: It’s a natural disaster. And because of that, you know, you could even say that the state was partly responsible. Some people are trying to say that, right? And they’re probably correct.

Akina: Well, Annie, you’re not just free-associating. You’re not dreaming. This is a nightmare, and Joe is gonna comment on that.

Burns: OK. And because now the tax, I mean the insurance bills are like, it’s almost as if it’s like a feeding frenzy now. All the insurance companies are jumping on and saying, “OK, you gotta have a new roof and you gotta have a new roof,” and you don’t even live on Maui, you know? 

Akina: There you go. 

Burns: And there’s climate change that’s causing these fires and …

Akina: Now you’re free, associating. [Laughter] 

Burns: … now we can … 

Akina: Joe — I’m going to let Joe respond. Thank you, Anne. Give Annie Burns a hand.

Before Joe closes with his comment — we’ve been busy at the Legislature and people are asking us now that the Legislature is closed, what are you guys doing? 

The team is even more busy down at the county level, where Grassroot has an even larger representation than we do at the Legislature. So these are issues you’re gonna be hearing a lot more about in the weeks and months to come. 

Joe, you.

Kent: OK, so once upon a time, there was a insurance desert on the Big Island. You could not buy insurance in the lava zones — lava zones 1 and 2. You couldn’t buy insurance because no insurance company in their right mind would actually sell insurance like that. That would be like trying to sell insurance for a house that’s already on fire. You know you could never make money that way.

But, so the Legislature came to the idea that let’s have the state create an entity that is forced to insure these homes, and that entity was called the Hawaii Property Insurance Association, which collects fees from the insurance industry to build up this fund to basically provide insurance to hard-to-insure areas.

Now the fund is kind of tanking. The money’s gone dry because of all the lava losses there. We’ve seen, you know, lava flows in that area, and you all know that. 

But add on top of that, the Lahaina situation, and insurance companies across the nation are taking a second look at Hawaii and saying, “Gee, you’ve got hurricanes, you’ve got floods, you have tsunamis and wildfires and volcanoes, and maybe we should price these islands higher.”

And so all of that is, was in the insurance bill — very, very complicated bill that I won’t go into. But they did have that aspect of maybe we should have this property insurance association cover all of the hard-to-insure things, you know, across the islands, not just the volcanoes — but any wildfire zones, any condos that are uninsurable, and so on. 

So this is something I could talk about obviously forever, but it’s gonna be a big deal in the coming years.

If we don’t have some kind of solution for this, then they’re just gonna get away with the argument that we need to raise taxes to solve all of this. 

So they’re — and that means groundbreaking research in this area. Nobody is really doing any research like this. Like we have to do it.

Our research at Grassroot Institute is handmade. We’re not just importing something from the national level or something. Like, we’re digging in, we’re asking experts in this field — experts that we don’t know even if we can trust, by the way. So we have to ask different experts and go to the source and so on. So stay tuned.

Akina: Perfect. And by the way, Joe, thank you. 

On that note, you just heard from Joe, speaking just right from his heart, as to why we need Grassroot Institute. We have to stay ahead of the curve. We have to anticipate what’s coming.

And with that in mind, I just want to thank you for standing with Grassroot, supporting Grassroot, being here, encouraging us, reading our material, financially standing with us. You make it happen. We can’t do it without you.

Thank you for being at Grassroot Institute today. Aloha.