Small Business Hawaii | Volume 23 Number 6 | June 1998
Who Am 'Dis We'? | Shaping the State Budget | Child Labor By State Rep. Galen Fox, 21st District, Waikiki-Ala Wai Is Hawaii now living, quoting John Naisbitt, in a "time of parenthesis, the time between eras?" Do we continue to support big government and high taxes at the expense of the economy? Or do we try new ideas? The Republicans want to try an idea new to Hawaii but working elsewhere. We want to reduce the size of government and reduce the tax burden on Hawaii's people. We believe real tax cuts will stimulate our economy. Our "Plan" has been "on the table" for months now, despite Governor Ben Cayetano's comments at his tax hike rally where he said "show me another plan, ours is the only one on the table." So Governor, here it is again. We agree that State government is too big and inefficient. Our solution to reducing government is creating "Diamond Action Teams" made up of big and small business representatives. These "Diamond Action Teams" will attack seven departments that comprise for 90% of the total state budget, looking for ways to make government smaller and better. The seven departments are:
* Department of Human Services * Department of Health * Department of Transportation * Department of Public Safety * Budget & Finance (plus Accounting & General Services and Human Resources) * University of Hawaii If we can reduce State government by just 1700 positions‹doing so without firing anybody‹this would save the state $80 million. We can do our cuts through attrition. Attrition means that when a worker retires from a department, we do not fill this position from the outside, though it is ok to recruit from within government. We will support the department's loss by providing it with the tools to do the job better and more efficiently, just as business has done. Queen's Medical Center has reduced its workforce 6% "without any loss in service." Reducing the government by 1700 positions means only a 4% drop in employment - much less than the workforce drop at Queen's. If Queen's can reduce employment without affecting service, so can government. In order to strengthen effective programs and services to the people of Hawaii, we also propose to create three "Compassionate Heart Teams." The "Compassionate Heart Teams" will work with the departments of:
* Education * Human Services to realign existing budgets to support programs that offer the most prevention, performance, and payback to the community. With the help of the Diamond Action and Compassionate Heart Teams, we can cut the size of government, provide more effective and more efficient services to our community, and save taxpayers money. The third component to our plan is to support wholeheartedly the income tax decrease proposed by the Governor's Economic Revitalization Task Force, while fighting the proposed general excise tax increase. And here is why. Any excise tax increase will force you to pay more for everything you buy. The general excise tax is a pyramiding tax which increases each time this product exchanges hands or service. For example, a book goes from the publisher , to the shipper, to the wholesaler, to the store, then to you. You as a consumer just paid over 12% in taxes. Therefore, any increase in this tax shift is essential to offset the revenue lost to the state by the income tax cut. This is not true. In 1994, New York's economy was much like ours today, in shambles. They boldly decided to cut taxes by 12% a year for three years, and each successive year, they had a surplus that averaged $1.2 billion a year. This means that all government expenses and programs were paid in full, and there was $1.2 billion each year left over. Michigan also cut taxes by an average 7.6% a year, Arizona by 6.4%, New Jersey 5.7%, and Massachusetts by 3.2%. MIchigan's average revenue gain the following year was $2.6 billion, Arizona's was $257 million, New Jersey's was $446 million, and Massachusetts $849 million. These tax models show that cutting taxes, not raising taxes, will not only give the individual more money in that person's wallet, it will also give government more money! It's a win, win‹win for taxpayers, win for the economy, and a win for government services. New York, Arizona, Massachusetts, New Jersey, and Michigan have restructured their tax systems to meet the demands of the new information age society. Unfortunately, our state has not. There is one question the Democrats need to answer. Will you allow the state the welcoming tax environment that nurtures innovative new ideas to develop and flourish here, or is it going to be politics as usual, which will bury us, the citizenry of Hawaii 6 feet under? Many of us are already sinking fast.
 By Ken Schoolland, Schoolland International Partnership
Uncle: Did you watch the Miss Universe Pageant?
U: It was spectacular! And it was worth millions to the tourist industry!
U: Commerce will profit enormously from the advertisements about Hawaii. The state also promises really big profits from new tax revenues. And Donald Trump and the beauty queens? They did all right, too.
U: No way! Hooters would probably have been sued for sex discrimination!
U: Partly. But it was cheaper and easier for them to lobby the
legislature for most of the money--$3 million from the taxpayers.
U: Well, that's always the promise. They really have no choice, ya know.
U: No, strange as it seems, the new convention center wasn't suitable. Instead, it was held at the state university.
U: No, they held it at the new Stan Sheriff Center.
U: Oh state officials assure us that this pageant wasn't commercial
and there's no profit at all. They say it's because the money was paid through the Hawaii Visitors Bureau--a noncommercial, nonprofit organization. U: You thought? You shouldn't be doing that. Trust the legislators to do the thinking--you just do the paying.
By Richard O. Rowland, Rowland & Alameida Isn't it strange what wisdom one snatches from life as one moves along. At least that's true of me. Forty years ago it was my rare good fortune to have under my supervision a middle-aged sergeant originally from Mississippi. A descendent of slaves, born on a sharecropping farm, Sgt. Noah Adams had missed out on formal education as he grew into adulthood. But, wow, he was smart and very quick of mind. And he had a wisdom and moral sense unfettered by sophisticated theory or classroom jargon. Sgt. Adams was almost worshipped by his men. He was wise, fair, compassionate, caring and demanding of all that each could be. He took care to identify strengths in each of his men - and weaknesses. He reinforced the strengths and arranged for unobtrusive compensation for weaknesses while he worked for (and demanded) improvement. I didn't know it at the time, and neither did he, but he became my mentor. After all, he would have said, a lieutenant cannot have a sergeant as a mentor. But he didn't take lightly any higher authority making errors at the expense of him or his men. That, of course, included me, the company commander. We prepared for and suffered through a major inspection in the summer of 1957. We flunked because two platoons were grossly unprepared. Sgt. Adam's' platoon was close to perfect. After the inspection I conducted a meeting about the necessity for a re-inspection and and what we must do to prepare for and pass it. I finished. There was silence. I saw Sgt. Adams look at his platoon leader, a young 2nd Lieutenant, in an expectful way - waiting for him to speak. I could tell he was upset and his lieutenant knew so too, but the officer remained silent. Sgt. Adams finally cleared his throat and addressed me courteously, but firmly: "Sir, who am 'dis we? 'We' gonna get ready for re-inspection. Who am 'we'?" I responded that the company had failed and that we all had to do it over. His response was: 'DAT 'WE' DON'T INCLUDE ME AND MY BOYS." His logic was flawless. I appealed to the Battalion Commander and got an exception. Now every time I see 'we' need to do this, 'we' need to think this, 'we' need to provide for this, 'we' need to change this; I remember... WHO AM 'DIS WE? DO IT INCLUDE ME?" And I demand more specifics. Does or should it include me and mine, or you and yours? Thank you Sergeant Adams, for the legacy.
Shaping the State Budget -
By Sam Slom, State Senator 8th District A single Mom wouldn't do it this way. Neither would a family. No small business. But the state legislature's budget process remains essentially the same: chaotic, secretive and political. This is true for the two-year operating budget as well as for supplemental appropriations. As the '98 legislative session wound down, the budget was the final sticking point necessitating an extended session. The budget process for individuals and businesses is more straightforward. It is a planning tool for the financial health of those involved. It's not perfect. You need to have a good idea what your revenues are, and are likely to be, and, must prioritize your expenditures, and balance the two. It may take several passes. It always requires difficult decisions. You get as much input as possible, make allowance for savings and liabilities, and implement the budget. Recognizing conditions change (your rich relative dies and leaves you a fortune - or your business dies and leaves you in debt), you adapt. Because it is your money, your budget process must be careful, deliberative and accurate. A family has other members dependent on the decisions; a business has employees and perhaps stockholders to be accountable to. The results of bad budgeting are readily apparent. Accountability is the key; it affects you and you can't blame anyone else. In contrast, the state budget is assembled by many hands using other peoples' money, and based on decisions often more political than economic - or rational. The budget is seen as a tool, but one that can change social or economic policy, redistribute income and wealth, reward certain groups and elected officials while punishing others. It is hard to fix responsibility. Bad budgeting decisions aren't always immediately apparent. Priorities baffle the public who are left out of the process entirely: $1 million for an orangutan sanctuary instead of emergency ambulance services; $3.3 million for a beauty pageant rather than continuation of sexual abuse treatment centers. Elimination of education personnel and programs replaced by money for ethnic cultural centers. Money for welfare in the wake of great waste, overpayment and fraud with previous funds. The lack of accountability. The "battle" for the budget is mostly a battle between competing powerful special interests who see the money totals as "theirs" and who look short term - election periods - rather than long term. What is the rationale for the decisions? It is often difficult to comprehend, especially when decisions are made behind closed doors, when even legislators - other than committee chairs - have limited access to worksheets and validating documentation, and when "mistakes" such as last minute insertion or deletion of items without discussion or hearings occurs. It's not a pretty picture. The budget process can change if the public wants it and those responsible changed. The budget should be honest and reflective of our resource capabilities and of clearly stated priorities. If education is truly number one, for example, it means telling other competing interests they will have to wait. Some would say this is too simplistic. Often simple things are the right things.
By Tracy Ryan, Libertarian Party of Hawaii Just say the words "child labor" and unsettling images of small underfed children chained to machines in dark factories flood one's mind. "Honolulu Weekly" recently ran an article decrying the abuses of children working in many third world countries today. Reformers are calling for a worldwide ban on the employment of persons under age 15, or at the least a boycott by American consumers of products made by child labor. Do these steps make sense? Children have worked throughout history. Until modern times few people completed more than a year or two of school. In agricultural communities children's chores were part of the total family labor expended. With the industrial revolution the employment of children continued, albeit for pay and under other than parental supervision. During this time it became the practice for orphans and foundlings to be forced to work in the "parish apprentice" system. These are the kids who suffered and were so often written about by nineteenth century reformers. They were under the supervision of government functionaries rather than loving parents. Many other children worked, but remained within the family unit. Child labor exists in situations where parents do not have sufficient earning ability to support their children. In many poor countries children must work or starve. I repeat this has been the normal condition of the human race throughout history. The writer who blames child labor on "greedy American capitalists" is ignorant of both history and economics. Low per worker capital investment in third world countries is the reason worker earnings are low. The technological advances brought about by free market capitalism has lead to the enormous increase in worker productivity in the industrialized nations. Only that has allowed us the luxury of ending child labor. In a poor country where the median age may only be 15 or 16 passing a law against child labor would be disaster. No one in favor of such a law has come up with an answer as to how the children currently supporting themselves through work would support themselves without it. Wealth is not created by law, but by hard work, and savings, the two things promoted by free markets. The problem in third world countries has been their adoption of socialism or autocratic oligarchies. Forced labor and poverty are the fruits of such systems. Many countries have compounded bad government with a singular lack of foresight in the are of family planning. We should be working to end all forced labor in all of these countries. We should not be working to force people who must work to survive out of the labor market. Like it or not those are the realities.
Top of this Page | Page 1 | Page 2 | Page 3 | Rating the Legislature Copyright 1998 Small Business Hawaii. All rights reserved. |