SMALL BUSINESS NEWS _________________________________________ SMALL BUSINESS HAWAII Creating A Better Hawaii Through Private Enterprise VOLUME 20, No. 7 * July 1995 __________________________________________________________________ HAWAII BIZ CLIMATE IN "MELT DOWN" Hawaii continues to lead the Nation in the rate of bankruptcies and to trail in business recovery. An alarming number of landmark businesses have shut their doors and hundreds of smaller, no less important enterprises, are now closed. The State daily deficit continues to increase with each new government press conference or legislative hearing. What's happening? Who's in charge? Hawaii's business climate is in meltdown mode. This has never happened before and is not the result of a Mainland Recession, the Gulf War, the Japanese Yen, or, "12 years of Reagan-Bush." This destruction of business incentive is Made-in-Hawaii. Two decades of tax and spend policies have come home to roost. Government corruption, scandals and non-productivity are taking their toll - as SBH predicted for quite some time. Worse, those who benefit the most still don't listen or act on the pleas of hard-working small business women and men. Government accepts no responsibility yet too many continue to look to government for relief. Bankers, property owners, insurance executives, health care providers are privately alarmed as the negative consequences mount. There's no fiscal crisis; only a leadership crisis. Hawaii's many creative, innovative, private risk-takers must speak up and lead. ---------------------------------------- "Special" Legislative Session Pau The 1995 State Legislature adjourned May 1 but an "error" made on the last day, invalidated 34 appropriation bills - including the whopping $12 billion bloated budget. A Special Session was called by the Governor and held June 5-9. The only other matter acted upon was the readoption of the nursing tax credit. House Republicans Anderson, Halford, Kawananakoa, Marumoto, Meyer, Thielen and Ward, worked hard to keep the special session from being business as usual. They sponsored measures to restore tax credits to their original levels and to repeal the onerous 6% nursing home tax. They supported "STOP'EM - Stop Taxes on Poor, Elderly and Middle Class," a citizens' group, including SBH, that encouraged saving overburdened groups from more tax dollars by a budget-panicked Legislature. Although the Democrat Majority refused to hear the Republican bills, voted down their floor amendments and retained most regressive tax hikes enacted earlier, the Republicans did gain one victory. The Senate extended the nursing home tax credit by six months, as the House GOP requested in a floor amendment. During the Special Session, it seemed the state deficit grew day by day...and is still growing. Or so they say. (No one has seen the real data except the Administration). More excuses for tax increases and still no action on real government trimming. No action was taken on the pure no-fault auto insurance bill passed in May, and thought to be unconstitutional. Included in the measure is the transfer of medical costs from auto insurance to employers' pre-paid health care plans. State Farm Insurance, the state's largest auto insurance carrier, launched a massive PR campaign in support of the legislation during June. However, The Governor, a former plaintiff's attorney, vetoed the controversial legislation on June 20. At press time it was not clear whether another Special Session may be called to override and to deal with the new fiscal problems. SBH's Legislation Action Committee graded the regular 1995 Legislative Session a "D" for some effort, but little lasting substance in improving Hawaii's hostile business climate. The events since the Session underline the generosity of that grade. ---------------------------------------- Poole Draws Crowd on "Privatization" Robert Poole, who coined the term "privatization" more than 20 years ago, and who heads The Reason Foundation in Los Angeles, taled with members, Legislators and the public on June 8. 85 people, including more than 20 State Legislators, attended the morning program at the Pacific Club co-sponsored by the Reason Foundation-Hawaii Chapter, Small Business Hawaii and the Tax Foundation of Hawaii. Poole spoke on, "Privatization Now, Good News From the Frontlines," and detailed current efforts to get government out of business and private competitive business into saving taxpayer costs associated with a wide variety of public services. Two years ago, when Poole last visited, about 5 lawmakers came to hear his suggestions. ---------------------------------------- Chaminade Tax Forum Announced The annual Hawaii Tax Institute, a one-day seminar, co-sponsored by Chaminade University Tax Foundation and Chaminade University of Honolulu, is set for Friday, November 3 at the Hawaiian Regent Hotel. The in-depth workshop features local and national speakers on a host of important tax and fiscal topics. A complete program and reservation information will be included in a future issue of SB NEWS. For advance information, contact the Institute at 946-2966. ---------------------------------------- SMALL BUSINESS VIEWS By Sam Slom, President, Small Business Hawaii Swindler, convicted federal felon and former Hawaii Campaign Spending executive, Jack Gonzales, who escaped from Tacoma prior to sentencing for fraud, was given protection by the so-called "Independent Nation of Hawai'i." If Dennis "Bumpy" Kanahele, self-chosen monarch of the "Nation" wants to be taken seriously, then he should not have made Gonzales the Nation's "Minister of Foreign Affairs," but Minister of Finance instead. That way, Gonzales could handle Bumpy's personal finances the way he (mis)handled the unions' Unity House and individual investors. This fiasco gives legitimate sovereignty advocates a bad name. Even Haunani ("I hate America") Trask spoke out against Bumpy's phoney Nation. Bumpy, created and maintained by the local media, was an invited celebrity guest at the recent Waikiki opening of Planet Hollywood. Michael Qseng on KRTR-FM "reported" O.J. Simpson called Bumpy also seeking judicial protection. Dr. Jack Lewin is finally gone (to California's HMA) but not before having a going away fundraiser to help retire his campaign debt of '94. What's up, doc? The State Prepaid Health Council has once again ruled against consumers in general, and business employers in particular, in denying "added choice" plans and in again changing dependent-coverage status of existing plans. The State action increases the costs to employers while lessening choice. The Council isn't buying Mayor Jeremy Harris' political ploy to try and stuff five (5) union officials into 6 City Planning Commission posts just in time for next year's election. But the Council was wrong in banning smoking in restaurants (5-4), bars and clubs. Restaurants have complied with a growing list of costly demands for separate sections, filters, vents, etc. More loss of choice and individual freedom. But, congrats to Mayor Harris, who vetoed. Economic harm would occur (as elsewhere) and the question remains, if government continues banning personal actions where will it lead next? Mark Twain once said, "It is always easier to reform other people's bad habits." Is it just me or was this year's June graduation exercises in Honolulu bizarre? They included a Kailua High honor grad who was to be banned from making the valedictory speech because she wanted to thank God (profanity is ok); some Iolani students told they couldn't take part because the girls chose not to pay for expensive graduation dresses - the first time this student-adopted rule was enacted; then a Punahou Merit Scholar who entered college in her Junior year was refused permission to graduate with classmates she attended school with for 11 years. What's important here? The State's Green Party, has elected one candidate, County Councilmember Keiko Bonk-Abramson, but has demonstrated its political savvy. Keiko was the Republican swing vote on the 4-4 Council in December giving Elroy Osorio the chair; in June she switched to help the Democrats give Elroy the boot and became chair herself. Island Insurance stopped issuing Workers' Comp insurance and Prudential cancelled its 7,000 homeowners policies here. Will attorneys and unions allow real reform? Shame on Alabama for reinstituting chain gangs and expecting prisoners to work and be punished. As the ACLU points out, this is "dehumanizing" and hurts the self esteem of the criminals. We should do more for them; as we do in Hawaii. Prisoners' "rights?" Give me a break. Prison is supposed to be punishment for wrongdoing and not fun or comfort. We've forgotten that for too long, and it shows. Reinstatement of chain gangs is spreading. Look at the benefits: punishment, work done, plus some great songs and movies. In light of GTE Hawaiian Tel's massive proposed rate increases, two quick survey questions for your business: (1) do you have a single or multi-line business phone? (2) what is your total interstate access charge? Would you be kind enough to FAX me the answers (396-1726?) Will report results later. Goodbye Hamburger Mary's, Shelly Mazda and House of Adler ("If You're Not Plagiarizing the Tag Line from the House of Adler Commercials, You WERE Paying Too Much"), latest business casualties of note. Congratulations to Paul Casey, newly selected head of the embattled Hawaii Visitors Bureau. HVB nearly picked another political crony with no industry experience. Now if the HVB can only cut their umbilical to the State DBED and finance their own operations. Early retirements not just in government; Hawaii's big businesses changing too. Nearly 10% of Bankoh's 4,500 employees are eligible for early bailing. Future takeover target? Condolences to the family of Wesley H. Hillendahl, Bank of Hawaii Chief Economist from 1967-81 (and my former boss). Wes died in early June in Santa Rosa, California. Wes & I were together for 14 years and wrote and spoke then about how Hawaii's Political Machine was destroying incentive, innovation and investment in Hawaii. Celebrate America's Independence Day; not just another paid holiday. With government infringing on more of our rights, we should all take a minute and contemplate protecting our remaining freedoms while thanking GOD for our liberty and the many sacrifices others made to preserve our precious freedom. Don't take it for granted; freedom is still the exception worldwide, not the rule. ---------------------------------------- CAN THE CONVENTION CENTER Guest Commentary By Andrew Rothstein, Appraiser Gov. Cayetano: I'm glad to hear you questioning the environmental study for the Convention Center. Having read the "economic" studies that were used to justify the project in the first place, I believe that you will find that they were at least as faulty as the environmental study. If you don't have the expertise to adequately review the economic analyses, I am ready go over them with you. After the problems with the Honolulu Stadium management, the Kohala Task Force and the construction problems encountered with that Stadium and the one in Manoa, as well as with the deep draft harbor and the Capitol renovation, what gives anyone the confidence that the Convention Center will be built and operated within the parameters specified? If the hotel industry refuses to find a way to build this project, despite the fact that they spend millions to install all sorts of amenities on their own properties or to acquire amenities, such as golf courses and tennis clubs, on other sites, why is there even a hope that the convention center will be economically justifiable? How will we avoid the corruption problems recently publicized about the Jacob Javits Center in New York? Selling the site would go a long way towards alleviating our projected budgetary shortfalls. Does it make sense to start such a risky and expensive project in the case of continuing revenue problems? If we had been seduced into starting the rapid transit project based on the projections of 6.9% annual increases in the excise tax revenues, we'd be in a real hole today. Once the construction of the convention center begins, how will the State afford change orders and shortfalls in the operational projections? Already we have heard requests for a tax free zone for the center. Please, Gov. Cayetano, CAN THE CON (CENTER)! ---------------------------------------- ABERCROMBIE AND THE ART OF DECEIT Guest Commentary By Orson Swindle Hawaii Representative Neil Aber-crombie is on a mission. A true disciple of the welfare state, his recent propaganda binges ought to infuriate the people of Hawaii. His antics are those of a frenzied politician and party in panic. Abercrombie, Patsy Mink and associates have no new ideas and no acceptable agenda. The American people won't buy the social welfare state anymore, and that's all these Democrats have to offer. Shades of the 60's, old Neil, long hair flowing and rhetoric spewing, was recently on the UH campus carrying on about student loan programs that he says are gonna be eliminated. He predicted elimination of the Perkins Student Loan, the College Work Study Program, the Supplemental Educational Opportunity Grant, and he says the Stafford Loan program was going to be more costly to students. What's the real story here? There is no current Republican proposal to eliminate the Perkins Loans. With $6 billion of taxpayer dollars already invested in this fund, indeed there are some in Washington who believe additional taxpayer dollars are not necessary in order to preserve the program. President Clinton is one of those with that belief. He proposed to zero out the federal contribution to this fund in his 1995 budget proposal. Come on, Neil, be honest! There is no current Republican proposal to eliminate the College Work Study Program - not one dime of it! Republicans are working to save work study and other financial aid programs by trimming other parts of the federal budget and eliminating needless bureaucracy and the in-school interest taxpayers subsidy of college loans. Mr. Abercrombie is deceiving college students. I guess that's an improvement over deceiving elementary school kids in the despicable charade over school lunch programs. There exist no current Republican proposals to eliminate the Supplemental Educational Opportunity Grants as he claims. Show us proof of a single, valid legislative action taken by the Republican Congress that would suggest such a cut. Folks, Neil can't produce one because there aren't any. The Congressman may have come close to the truth on the Stafford Loan being a bit more costly. Of course, he was trying to panic the students with his calm, but just budget director, Alice Rivlin, who would stop the deferment of interest accrual on these loans while the student is in school. The savings to the taxpayer is estimated to be over $12 billion. For the average college student, the additional cost over the life of the ten year loan would be approximately 68 cents a day. It seems reasonable to have college students pay interest on their loans just like the working people do. Not in Neil's World. ust think, we've got this guy for another 17 months! ---------------------------------------- WORKER'S COMPENSATION PREVENTION By Pamela Gottlieb Worker's Compensation . . . we all have our horror stories to compare! As employers, Worker's Compensation affects us all. Skyrocketing costs and employer unfriendly legislation make the current Worker's Compensation system more difficult to work with. Even one claim can affect your experience modifier, which in turn affects the rates you pay for all of your employees, regardless of their classification. Small claims can have a negative impact on your Worker's Compensation experience modifier, just like a large claim. The best defense in this regard is a strong offense, including preventive programs, policies and procedures, education and information, and proper dealing with claims - including fraudulent ones. The State of Hawaii has a "Presumption Clause," which basically means that any person claiming to have been injured on the job is believed to be telling the truth. The burden of proof falls squarely on the shoulders of the employer to irrefutably prove otherwise. An employee who states he was injured when no one else was around would make it terribly difficult, if not downright impossible, for the employer to prove that it was not the case. Worker's Compensation containment and reduction starts at the pre-employment level. Effective pre-screening and interviewing techniques can help reduce your chances of hiring a "professional" Worker's Comp collector. The majority of Worker's Compensation claims occur while the employee is under the influence of drug or alcohol. In fact, these individuals are 4 times as likely to have an accident or injury. Some things you can do to protect yourself: * In your pre-screening process you should be on the lookout for gaps in employment. This can send up red flags for you to investigate further. Use your reference checking process as an additional measure to reduce your risk of hiring someone with a questionable background. * A strict "Substance Abuse Policy" can be an effective deterrent to workplace accidents and Worker's Compensation claims. If you do not have one currently in place they are pretty easy to start up. Let employees know that they will be drug-tested whenever there is an accident or injury. Have them sign a release for authorization of testing that states that they will be tested for cause, including any instance of workplace accidents, when they are completing their application for employment. If your company has a "Substance Abuse Policy," it is helpful to let applicants know that they will be signing a release for authorization of testing when they come in for their interview and that drug testing may be required after the interview. * Communicate your company's Worker's Compensation philosophy and expectations to all of your employees. Use posters and visuals that reinforce your safety message. Tell then that you do everything possible to create and maintain a safe working environment. Let them know also that you will investigate and fight all fraudulent claims. * Do a safety audit of your premises at least quarterly to ensure that the environment remains safe and healthy. Really look with a critical eye. Are there extension cords or cables in the aisles? Are the computer monitors at the proper ergonomic height? Are the exits accessible and clearly marked? Is the first aid kit and fire extinguisher up to date and accessible? Is the illumination good? Are emergency phone numbers posted conspicuously? Are the floors clean and free of debris? * Make it a policy that any and all accidents or injuries must be reported to the supervisor immediately. Make employees responsible and accountable for maintaining a safe working environment and following the safety rules. Let everyone know that violation of the safety rules will not be tolerated and will result in disciplinary action up to and including termination. * Do a safety orientation with new employees that covers proper attire, hazardous materials, general safety rules, safety equipment rules, machine and equipment operations, first aid procedures and general housekeeping practices. Safety videos can be very helpful in this orientation process and are available on the market at reasonable cost. * You may want to create a safety incentive program for your employees that remain injury and accident free. Monetary rewards can be very effective, as can gifts. These types of programs can go a long way towards reducing your Worker's Compensation claims. * When an injury occurs on the job, whenever possible, you should take the employee to the doctor and wait to obtain the diagnosis from the doctor. Let the doctor know that you have light or modified duty work available. If the doctor released the employee for modified or light duty, have some tasks of this sort available for them to do. This can save you a great amount of money because it reduces the lost wages that the employee can claim. One dollar spent for light or modified duty can save you a dollar and a half in Worker's Compensation premium. If the employee cannot return to work on the doctor's order, be certain that you stay in contact with them at least weekly to see how they are doing and to let them know that you are looking forward to their return to work. * Have the employee sign a statement detailing how and why the accident occurred, and the exact nature and extent of their injury. Also get a signed statement from their supervisor and any witnesses to the accident or injury. Worker's Compensation problems can bite you, but with some preventive programs, good communication and attention to the situation, you can take some of the sting out of it! ---------------------------------------- HMAA Takes Softball Title The victorious Hawaii Management Alliance Association (HMAA) coed softball team defeated Smith Barney, Inc. recently to win the SBH Softball League Spring Championship. There will be a summer softball season only if there is sufficient member response by July 15. Contact SBH at 396-1724. Let's Play Ball! ---------------------------------------- The Computer Corner by Melvin Ah Ching THE WORLD WIDE WEB The Internet and the World Wide Web are the latest buzz words these days in computer speak as well as in the general media. Everywhere you turn, someone or some organization is telling you to "send inquires to our e-mail address" or "see our home page on the world wide web." Some of you may be asking what is all this about? Let me explain. The Internet is the world's largest collection of connected (networked) computers. This vast computer network contains huge volumes of information presented in many different forms, of which the World Wide Web is one. The World Wide Web (or Web for short) is the hottest part of the Internet. The Web contains a graphical presentation of information complete with linked hypertext (text that you can click on to take you to other information on the web), photos, graphical representations of company logos, artwork, etc., and even downloadable soundbytes and quicktime movies. The web is very easy to use. It doesn't matter what kind of computer you have. You just need a modem, an internet connection (with the proper software configuration) and some kind of web browser software. Once you get this, it is a simple matter of logging on, activating your browser and you're ready to "surf the net." There is an estimated 30 to 40 million people worldwide who are on the Internet, and this number is increasing every day. It would be a safe bet to say that a vast majority of Internet users have web browsers and access. Needless to say, many businesses have established a presence on the World Wide Web. Just about everything imaginable is being marketed on the web... books, hotels, cars, computers, coffee, online stores, television stations, tourist destinations. You name it, it is probably on the Internet. There are several Hawaii-based Web sites where businesses can set up a Web presence. Small Business Hawaii members have the option of establishing Web pages on H4, Hawaii's Data SuperHighway, an SBH member business operated by Robert "Rabbett" Abbett. Small Business Hawaii has a web "homepage" on H4 that is accessible through the Internet at http://www.hotspots. hawaii.com/SBH.html. The SBH site, which is undergoing a gradual state of expansion and refinement, contains the latest information about Small Business Hawaii, online editions of the Small Business News, photos, logos and an online application blank for prospective new members to fill out. ---------------------------------------- OTHER ARTICLES COVERED IN THE PRINTED VERSION Due to space constraints the following articles are not part of any online issue, but can be found in the regularly printed issue of Small Business News. * SBH Board Adopts Revised By-Laws * Point of Service Plans No Longer Qualified Plans (Health Insurance) * Dohman Gives Forecast, Tips * Long Distance Rate Savings For Members * Small Business Hawaii Members in the News (briefs) * Letters to the Editor: TAGS, Illegal Toxic Dumping * Welcome New Members If you would like to read these articles you can either pick up a printed copy of Small Business News at the Small Business Hawaii office, or you can e-mail macpro@lava.net and the requested article can be sent to you via e-mail. _______________________________________________________________ About Small Business News & Small Business Hawaii Small Business Hawaii breaks new ground as it enters the information age with the online edition of Small Business News. This is a condensed version of the regular July 1995 issue of Small Business News. The newsletter is published monthly by Small Business Hawaii, a private, independent, tax exempt [501 (c)(6)] statewide association of more than 3,000 business firms dedicated to improving Hawaii's business climate and promoting, educating, and effectively representing small business in Hawaii, while helping to improve the quality of life of all residents of Hawaii. Small Business Hawaii invites you to comment on anything related to small business issues in Hawaii. Send us your comments and news of awards, promotions, etc., with photographs (if possible) to SBH by the 10th of the month for the next issue. Articles can be sent via regular (snail mail) to: Small Business Hawaii Hawaii Kai Corporate Plaza 6600 Kalanianaole Hwy., Suite 212 Honolulu, HI 96825 We also accept FAXED articles at: (808) 396-1726 (Sorry! faxed photos not acceptable.) You can also E-Mail your articles to macpro@lava.net All e-mail is fax forwarded to Small Business Hawaii. For more information about SBH call: (808) 396-1724 SMALL BUSINESS NEWS ONLINE July 1995 * Volume 20, No. 7 Editor & Publisher: Samuel M. Slom Directors: Joyce Edwards, Jean Fukuda, Jed Gaines, Kenneth T.G. Lum, Michael R. Marsh, Bob Sigall, Sam Slom, Jane Tatibouet & John Yanagihara. Computer Graphics: Melvin Ah Ching ISSN #0279-8395 Small Business Hawaii's OFFICIAL Web site is at H4, Hawai`i's Super DataHighway� at http://www.hotspotshawaii.com./SBH.html If you are copying this information for redistribution or web-posting, please contact Mel at macpro@lava.net for permission. This publication is Copyrighted 1995, Small Business Hawaii. No part of this newsletter may be reproduced without the prior, written permission. ________________________________________ Small Business News Online compiled by: MELVIN AH CHING PRODUCTIONS Desktop Publishing & Consulting Phone: (808) 946-2676 Internet: macpro@lava.net or M.AHCHING1@GEnie.geis.com END OF DOCUMENT