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Sunday, August 13, 2017
August 13, 2017 News Read
By Andrew Walden @ 6:21 PM :: 4248 Views

The Grand Skim of Things, Part 2

2018: Service to Muslims Could Make Chin Lt Governor

SA: ...Many in Hawaii have mixed feelings about Attorney General Doug Chin’s multiple lawsuits challenging President Donald Trump’s Muslim travel ban….

The concern is more about Chin rushing Hawaii to the front of the parade instead of simply supporting larger states with greater resources that were making the same fight….

Some question Chin’s political motives in his pursuit of a higher public profile.

If Lt. Gov. Shan Tsutsui follows through on resigning to run for Maui mayor, Chin would be in line for the job until the next election if Senate President Ron Kouchi and House Speaker Scott Saiki decline, as expected.

With the crowded race he’d face to hold the office beyond 2018, the visibility he’s gained in battling Trump is a valuable asset….

AP: Another Muslim in Hawaii Thanks to Doug Chin

read … Chin Gubernatorial Campaign, 2022 -- is Allah Akbar Enough?

Maui Council: TAT Hike Makes Neighbor Islands Pay for Rail (but we still aren’t legalizing TVRs)

MN: …The Legislature could easily resolve the rail’s shortfall by extending or increasing Oahu’s general excise tax surcharge to complete construction with no impacts to the Neighbor Islands. Unfortunately, this solution has fallen to the wayside and the statewide transient accommodations tax is now a target. Aside from the TAT hitting tourists more than voters, increasing this tax for rail has no rational explanation.

For fiscal year 2018, in what has now become a common occurrence, the Legislature raided the counties’ TAT share by reducing it from $103 million to $93 million. The counties’ share was reduced at a time when TAT revenues are at an all-time high, with anticipated revenues nearing or exceeding $533 million in the coming year. By the end of this fiscal year, the state will have harvested $96 million more in TAT since FY 2016, or a 42 percent increase.

The state has increasingly taken more TAT revenues to help balance its own budget at the detriment of counties. Now the Legislature wants to raise the tax to fund rail?

Neighbor Islands receive no benefit from the Honolulu rail, and a TAT increase has major implications on the economy. Most visitors have a fixed budget for their vacation and an increase in the room tax will simply lead to less spending on restaurants, retail and activities. Every 1 percent increase in the TAT sends approximately $26.7 million to the state, instead of remaining in the Maui, Kauai and Hawaii Island counties….

Simple solutions other than raiding the TAT exist and the Legislature must consider these avenues.

An option would be to collect TAT from wholesalers and online travel companies such as Travelocity, Expedia,, Orbitz and Priceline.

In 2015, the Hawaii Supreme Court ruled that online companies indeed were subject to general excise tax and penalties on their respective portions of gross income from sales of visitor accommodations in Hawaii. It was also ruled, however, they were not subject to the TAT. Most of these companies still collect the TAT, but they pocket the funds instead of paying it to the state, which is legal, but not right.

The state must also work with counties to create a mechanism to identify vacation rental properties by working with companies such as Airbnb, VRBO, HomeAway and other platforms to ensure they are operating legally and paying appropriate taxes.

These fixes would generate millions of dollars, but instead it appears legislators are looking for an easy way out.

Members of the County Council also agree that increasing the TAT is not the solution, and passed a resolution this past week urging the Legislature to extend Oahu’s GET surcharge instead. The hope is that legislators will have a change of heart and avoid pulling the Neighbor Islands into the rail project and draining resources the counties need for their own projects.….

(But the Council did not take any steps to legalize TVRs in Maui County because council members are afraid of their own NIMBYs.)

June 9, 2017: TVRs: No Taxation Without Legalization!

read … Neighbor Islands should not pay for rail in Honolulu

Pay for Rail by Eliminating Pension Spiking

SA: …Overtime abuse by public employees has a hidden cost that far exceeds the overtime pay they receive. The Hawaii Employees’ Retirement System (ERS) determines the pension benefit for public employees based upon a percentage of their Average Final Compensation (“AFC”). A retiring employee’s three highest years of compensation is selected in calculating the AFC.

For public employees hired before July 1, 2012, under the current formula, compensation includes not just the annual base salary of an employee but also supplemental compensation such as overtime. As a result, overtime pay can substantially increase an employee’s AFC resulting in a sizable boost in the pension annuity a retiring employee is entitled to receive….

Theoretically it is within the scope of management to control overtime abuse. However, if management lacks the ability to curtail spiking or, worse yet, if management is complicit, then the system is unable to protect itself from abuse.

Certain government agencies are particularly susceptible to overtime abuse and spiking. Those with operations that extend beyond a normal workday have chronically suffered from the highest level of overtime among all agencies and disproportionately impact the pension liabilities of government. Collectively the cost of spiking has increased the unfunded liability of the ERS by tens of millions of dollars over just a few years.

Serious policy examination is warranted regarding whether any reasonable justification exists for awarding employees spiked pensions because of episodic increases in their compensation during a fraction of their years of career service.

Past initiatives promoted by the ERS to curb this abusive practice have been rejected. Instead the law was changed to exclude overtime in determining AFC only for new employees hired since 2012 — a small fraction of all public employees…. 

SA: Crack down on pension spiking

read … Real cost of OT abuse? Pension spiking

Rail Condemnation: Jurors Not Fooled by HART’s Appraiser

SA:  …Hoernig, at considerable expense, challenged the city’s efforts to condemn his 10,000-square-foot property for $2.7 million. Based on his attempts to find a new warehouse, he said he believes the land and building where he runs his business, Honolulu Hardwoods, is worth $2 million more than what the city offered.

For nearly a week, a jury heard painstaking testimony from the two dueling appraisers hired by the city and Honolulu Hardwoods. They also heard briefly from Hoernig himself.

But before they could hear closing arguments, the two sides reached a settlement to pay Hoernig $3.15 million plus $232,000 in moving fees…..

After they were dismissed, at least three jurors expressed strong doubts about the approach used by the city’s appraiser, Jon Yamaguchi, who testified that he’s appraised 85 properties needed for the rail line in the past eight years and averaged $110,000 to $150,000 annually in business for the transit project.

One of those jurors, Rick Chavez, said “it appeared (Yamaguchi) took shortcuts.”

Testimony from Hoernig’s appraiser, Steven Chee, convinced them that the warehouse property was worth at least $1 million more than what Yamaguchi had found.

Yamaguchi further testified that he signed a contract with the Honolulu Authority for Rapid Transportation in April for up to $1.26 million in additional appraisal work….

SA: Different appraisal methods led to $1M gap

read … First rail land trial ends in condemnation

Workings of Hawaii government hew to satirical Parkinson’s Law

Borreca: …The central principle is: “Work expands so as to fill the time available for its completion.”….

Parkinson’s Law spawned many corollaries, including one with a local angle.

One, dubbed the law of triviality, means “The time spent on any item of the agenda will be in inverse proportion to the sum (of money) involved.”….

This is the Honolulu Corollary to Parkinson’s Law: The bigger the issue, the less attention is paid; the more manini the issue, the more we scrap.

How long did it take the state Legislature to approve a plan to allow the counties to raise the general excise tax to build a rail transit system? Sixty working days was all.

Were there subcommittees on projected cost analysis; were there committee studies on how best to include public input; did the public get to vote on the specific route, the specific tax rate, how long the tax would last, and who would bear ultimate responsibility? Nope. Essentially the question was “Build ’um or no build ’um,” and 12 years later, it is more than 10 miles of concrete monolith looking for a blank check.

Compare that to a pair of intractable Honolulu dilemmas: the Haiku Stairs and the Waikiki Natatorium War Memorial…..

read … Workings of Hawaii government hew to satirical Parkinson’s Law

Roberts Hawaii Sees Money in Maui School Bus Debacle

SA: (Written by Roberts Hawaii) …The DOE has within its power the ability to immediately correct the school bus driver shortage problem on Maui, but has not yet taken any action by stating the current contractor is in default.

This crisis stems from the DOE’s flawed (Translation: Didn’t pick us.) procurement process and the DOE’s unwillingness to correct the problem (after all those campaign contributions we made). A DOE transportation panel scored Ground Transport, Inc. (GTI) higher than Roberts Hawaii when reviewing proposals for Maui school bus service. Roberts has been servicing school bus routes on Maui for more than 30 years (cronies) and has a large operation and experienced staff. By contrast, GTI had no operating experience, no drivers, no support staff, no buses and no baseyards on Maui — and yet was awarded 71 bus routes that represent 65 percent of the routes on Maui….

This prompted Roberts to protest the award since by all indications, Roberts should have scored higher on these service factors. However, the DOE did not change its decision for reasons that still remain a mystery.

GTI blamed its failure to meet its contractual obligations on Roberts. GTI claims it was unable to recruit drivers while the appeals process was under- way. However, the appeals process did not stop GTI from pursuing its employee recruitment efforts, just as the DOE’s notice to proceed did not stop GTI from purchasing school buses for Maui.

GTI also accuses Roberts of using “scare tactics” to keep our employees. We cannot scare our employees to be loyal to our company. They are free to leave at any time to work for another company. In fact, it has long been a practice of GTI to lure away our employees. It currently has on staff 25 former Roberts employees on Oahu, nearly 20 percent of its current driving workforce.  (And we know where they live.)

2012: Taken For A Ride: Roberts Hawaii's Very Own Race to the Top of School Bus Biz

read … Money

REIT Tax Losers Whine

SA: A years-long effort to begin taxing dividends paid out to investors by some of the largest commercial property owners in Hawaii was blocked this year by state Sen. Rosalyn Baker, a lawmaker who has received substantial campaign donations from lobbyists and executives who represent some of those same investors….

This year a bill to eliminate the deduction for most REITs was approved by the House in a 47-3 vote, but stalled in the Senate when Baker (D, West Maui-South Maui) refused to consider it in her Senate Commerce, Consumer Protection and Health Committee. Baker, who is chairwoman of that committee, also declined to schedule a hearing for a similar Senate version of the bill.

In an emailed response to questions, Baker said that “no one, not even the introducer, asked for the bill to be heard. It didn’t seem to be an important issue. There were many bills that didn’t get heard because of the volume of bills referred to my committee.”….

State Rep. Beth Fukumoto introduced HB 1012 with the support of seven of her colleagues, including then-House Democratic Majority Leader Scott Saiki, and said her office did try to get Baker to consider the bill.

Fukumoto said in a written statement that “we called and requested a meeting with the chair to discuss the bill, but the meeting wasn’t scheduled.”…. 

SA: REIT tax issue needs full debate

Meanwhile: A&B to Become a REIT

read … Losers

Maui Dopers Clean out Shelves at Weed Store

MN: …Maui’s first state-licensed medical marijuana dispensary to open for business will be closed Monday and Tuesday and change its operating hours while Maui Grown Therapies awaits action from the Department of Health’s State Labs Division, the company announced Saturday.

Action by the division is needed “to help unclog a backlog of products so Maui patients can have access to quality-assured medicinal cannabis products,”Maui Grown officials said.

The company had expected its most recent batch of flowers to clear lab certification by Saturday, but that didn’t happen.

“Due to high demand, the company sold out its first batch of certified flowers on Saturday,” the company’s announcement said. “To prevent patients from fruitless trips to its dispensary, the company will close on Monday and Tuesday.”….

SA: Pot dispensaries open new debates

read … Keep the People Doped up so They Don’t Notice

Money: Danner’s Annual Show Set for October

MN: …Registration for the 16th Annual Native Hawaiian Convention is now open.  The event, hosted by the Council for Native Hawaiian Advancement announced the convention will take place Oct. 9-11th, 2017 at the Sheraton Waikiki Hotel and Resort. Registration for the three-day event is open until Oct. 4, 2017….

read … Money


Muslim Relabeled as Grandmother upon Arrival in Hawaii

AP:  The Syrian grandmother at the center of Hawaii’s lawsuit challenging President Donald Trump’s travel ban on people from six mostly Muslim countries is expected to arrive in Honolulu today.

Ismail Elshikh, the imam of a Honolulu mosque, said his 52-year-old mother-in-law Wafa Yahia received approval from the U.S. government several weeks ago. She is scheduled to arrive at Honolulu’s Daniel K. Inouye International Airport this evening on a flight from San Francisco in a 28-hour journey that started in Lebanon, he said.

Elshikh is a plaintiff in Hawaii’s challenge to the travel ban. The lawsuit argues that the ban prevented his Syrian mother-in-law from visiting…..

(Until they started calling mother-in-law ‘grandmother.’)

read … More Muslims




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