DOES A SPECIAL
LEGISLATIVE SESSION LOOM?
Governor Cayetano May Want One to Deal With "Revenue" Enhancement

A Special Session of the State Legislature may be called this month or in August by Governor Ben Cayetano. Steadily declining tax revenues, estimated at about $90 million for the fiscal year just ended June 30, is the primary reason for reconvening the Legislature, even though the Neighbor Island counties and hundreds of small businesses begged for a Session to deal with the privatization issue.

The 1997 regular Session of the Legislature adjourned May 1. Under Hawaii law, either the Governor, or the Legislature, may call a Special Session.

As discussed previously in SB News, public union boss Gary Rodrigues doesn't want a Special Session to deal with the botched issue of privatization, and he is supported by his "puppet," Senate President Norman Mizuguchi. The inescapable trend of tax shortfalls, coupled with soaring bankruptcies and an accelerating exodus of business from Hawaii, points up the State's fiscal failures.

The Governor and Speaker of the House Joe Souki, look favorably at raising taxes already the nation's highest burden rather than cutting government, regulations, and implementing privatized contractors.

During the '97 Session, majority Democrats proposed taxing annuities, pensions, increasing the General Excise Tax, adding County sales taxes, and increasing "sin," transient accommodations and fuel taxes.

Most of the the last remaining tax credits for Hawaii's already over-taxed residents were removed at that time. Incentives are gone too.

While the U.S. economy, and 49 other states, do well, not Hawaii. Hawaii businesses have fled to more "tax friendly" and competitive business climates, such as Las Vegas, Phoenix, Seattle, Portland and Denver. Government in Hawaii still doesn't get it. Hawaii's problems are not caused by a lack of tax revenues, but by a lack of honest leadership.

The SBH "YES" Young Entrepreneurs are sponsoring a summer fling potluck picnic in the sun, surf and sand. The event will feature volleyball, tennis, horseshoes, miniature golf, and a good time for all.

The "YES" Picnic is on Sunday, July 27, 9 am 4 pm, at Bellows Beach. A special location in picnic area "C" behind the Beach Club at Bellows is reserved for YOU! Everyone welcome, but RSVP required.

For more information, and to provide a headcount and potluck item, call Jeanine Fukuda (H-395-0068, O-951-0931, e-mail 71031.2446@compuserve.com) or the SBH office, 396-1724.

Cost of Government
Day is July 3

No one can be truly independent -- or sovereign unless he or she enjoys both political and economic freedom. Before we celebrate July 4, there is "Cost of Government Day" July 3.

Cost of Government Day is the date counting from January 1, according to the Americans for Tax Reform Foundation, on which we taxpayers have earned enough in gross income to pay for all government spendingfederal, state and localand the cost of regulations. The total is estimated at $3.519 trillion, up from $3.375 trillion in '96, or $13,500 for every man, woman and child in America.

That means we spend more than half the calendar year working to pay for government; but it doesn't qualify us for government employee benefits. Think about this when you celebrate the 4th of July.

HEMIC Begins July 20 as New Workers' Comp Insurance Company

By Robert L. Dove, President and CEO of HEMIC

Hawaii Employers' Mutual Insurance Company, Inc., HEMIC, will begin issuing workers' compensation insurance policies with inception dates on or after July 20. HEMIC was created by the 1996 legislature to address problems in the Hawaii workers' compensation insurance market. Upon the issuance of HEMIC's first policy, the assigned risk pool will cease issuing policies. Employers currently insured through the assigned risk pool will receive notices of non-renewal approximately 60 days before their policies expire. Through their agent, employers can continue their protection by placing coverage with HEMIC.

While HEMIC serves as the Hawaii residual market, it is available to all Hawaii employers. HEMIC offers several advantages to all employers. First, we are dedicated to being an industry service leader. We will emphasize safety, loss prevention and medical cost management. Next, our premiums will be competitive. We intend to run an efficient operation. Finally, we are dedicated to the Hawaii market...to Hawaii employers. We will be here year in and year out. Employers placing their business with HEMIC will be insulated from the feast or famine cycles that are common in the insurance industry. There are lots of carriers looking for business today, but where were they last year...and where will they be a year or two from now?

HEMIC is a private, non-profit mutual insurance company. It is capitalized with private funds and is owned by its policyholders. HEMIC has no State money, and the State has no financial risk regarding HEMIC or its operation. HEMIC's mission is to enhance the availability of workers' compensation insurance, to promote competitive pricing and to stabilize the market.

The creation of HEMIC is particularly important to small employers. Many small employers were placed in the assigned risk pool simply because they were small. They paid high prices even though they had good loss performance. Their premiums subsidized employers who had unsafe operations and bad loss ratios. That will not be true with HEMIC. The only employers who will pay a surcharge will be those defined as "high risk." To be "high risk" an employer must have had multiple losses and a three-year loss ratio exceeding 100% or have a demonstrated disregard for workplace safety.

HEMIC will not surcharge employers with good loss histories, regardless of premium size. We will provide safety information, training and support that will help safe employers continue to provide safe workplace and will give employers with unfortunate loss histories an opportunity to improve. Then it is up to the individual employer. The employer will control his/her future workers' compensation costs. It all depends on how hard they want to work toward providing a safe working environment. For information, call (808) 536-5688.

Chamber Continues Downward Slide

Despite successful sponsorship of the recent Small Business Trade Expo, the Chamber of Commerce of Hawaii continues its downward fiscal and membership slide. Financial and legislative uncertainty envelope the Chamber.

Last month, the state's largest chamber laid off 4 more employees including the publications editor, military affairs chief, legislative aide and longtime small business advocate and effective lobbyist, Jim Proctor. The staff is down to 8 employees from a high of 31 three years ago. The Retail Merchants of Hawaii broke from the Chamber to form their own independent organization three years ago.

Chamber president Stanley Hong, former head of the state-subsidized Hawaii Visitors and Convention Bureau, has been the subject of controversy and criticism for his guiding the Chamber in new directions with positions perceived closer to dependent, regulated big business and labor unions than small business. Hong insists the Chamber must do things differently and be more flexible, and that personnel cost-cutting is a fact of life in Hawaii.The role of the Chamber in the Small Business Coalition (NFIB, HBL, SBH, SB Congress) is now in question with Proctor's departure.

Third Annual ReDiscover
Hawaii Kai Set

Small Business Hawaii will again be a corporate sponsor of the Rediscover Hawaii Kai community event in November.

SBH will join with the Hawaii Kai Shopping Center, Hawaii Kai Towne Center, Koko Marina Center, BHP Hawaii, Saturn of Honolulu and others, to sponsor the Third Annual "Rediscover Hawaii Kai" celebration Saturday, Nov. 10.

The theme will be educational support in the East Honolulu community and Kaiser High School, celebrating its 25th anniversary, will be a primary beneficiary of corporate fundraising efforts.

Additional community input and participation is welcome. The activity seeks to unite Hawaii Kai residents with neighbors from around the state as well as our visitors. A complete schedule of events will appear in a future issue.

SBH member Ginger Peterson of Peterson Cheng and Fleishman is coordinating all efforts. If you would like information regarding sponsorship or entertainment, contact Ginger at 735-7877.