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Tuesday, November 20, 2012
November 20, 2012 News Read
By Andrew Walden @ 12:38 PM :: 5123 Views

DoE Receives School Bus Report, Keeps it Secret

Bankers Pleased by Abercrombie's Tax Hikes, Buy $866M Bonds

Lawyer: New DoTax Solar Tax Credit Rules are Retroactive

Kawailoa Windfarm Begins Operation

Hawaii County Police earn accreditation from national agency 

Hawaii Charter Schools Seek Board Nominees 

Hawaii Construction on the Rise?

HGEA, UPW Contracts Expire June 30, Allow Campaigning on County, State Time, Facilities

WHT: Union contracts trump the county ethics code, the county Board of Ethics said Monday in dismissing a complaint about United Public Workers employees attending events where union-endorsed candidates campaigned on county time and in county facilities.

The board voted 3-1 that it had no jurisdiction over the issue, even though Section 2-83 of Article 15 of the Hawaii County Code of Ethics prohibits county employees from using county time, equipment or facilities for campaign purposes. Union contracts allow the rank and file to be called to two-hour quarterly “educational and informational sessions”and requires the county to provide a meeting place if the union doesn’t have one.

Two unions, the State of Hawaii Organization of Police Officers and the Hawaii Fire Fighters Association, prohibit candidate endorsement or unlawful campaigning during these sessions. But the UPW and Hawaii Government Employees Association do not.

Balsis suggested the county could negotiate to have UPW and HGEA bring their contracts into line with SHOPO and the Fire Fighters. The current UPW and HGEA contracts expire June 30. He also said that the Hawaii County League of Women Voters, which has gone on record urging the Ethics Board to enforce the ethics code in this matter, and other interested groups could “put pressure on the union to stop this sort of action.”

Chairman John Dill was the lone dissenting vote in dismissing the matter.

“I feel that any county employee that knowingly goes to a campaign function at county facilities and county time would be in violation,” Dill said. “This board has no jurisdiction over union activities. However, county employees who are subject to the county code of ethics and are union workers must abide by the county code of ethics.”

The complaint was filed by Kailua-Kona resident Cheryl King after a West Hawaii Today article described how 538 county employees and their state counterparts were sent to two-hour educational and informational meetings on the clock at the West Hawaii Civic Center and other county facilities to listen to a union-endorsed lineup of candidates. The candidates’ opponents were not invited.

“Some county workers were uncomfortable at having to listen to speeches by candidates they did not support and did not want to cause problems with their co-workers or supervisors by openly protesting. … The county code of ethics should have protected those workers. It did not,” King said. “If the Board of Ethics does not take a strong stand against this practice it will happen again and public confidence in the county’s code of ethics and the county’s boards and commission will be undermined.”

read … Something that should be on the table June 30

Star-Adv: Repeal lawmaker ethics loophole

SA: State legislators were urged to be careful in making changes to the state ethics code applying to members of state task forces to constrain their dealings. Instead, the lawmakers approved a key change that broadens their own exemptions from ethics restrictions. Sen. Josh Green, for one, already appears to have benefited by the exemption, which should be repealed quickly in the upcoming session.

It's unclear how (Clayton Hee’s Senate Judiciary Committee made sure) the legislators' provision was inserted in the bill intended to apply to members of Legislature-created task forces, a measure to prohibit state employees from using their positions to gain unfair advantages for themselves or others. Allowing anybody such exemption to the restriction "would not only set a bad tone, it could well start things down a slippery slope," JoAnn Maruoka of the League of Women Voters warned legislators in February. We agree. Imagine, then, Maruoka's and our collective surprise to learn later that the bill also exempted legislators from the ethical prohibition….

The amended law enacted by the Legislature this year resulted from concern about whether members of a mortgage foreclosures task force were subject to the ethics code. Even on that score, lawmakers' dubious action would now allow task force members to use confidential information obtained through their duties to benefit themselves or their private employers.

LINK: Clayton Hee did it

read … Ethics Loophole

Report: Kauai Mayors Have been Siphoning Gas for Decades

HR: Minkin’s report, submitted to the auditor in May of this year, said, “Mayor Carvalho’s use of County fuel demonstrates questionable fiscal policies that range from poor accounting to a possible breach of public trust.

“Further,” the report continued, “the lack of legal authority for the Mayor to use County resources (fuel) for personal purposes, such as commuting to and from work, evidences a misappropriation of County property with resultant possibility of criminal liability.”

And the County’s failure to report Carvalho’s gasoline usage as a job “fringe benefit” raised questions about possible tax liabilities, the report said.

But the report cautioned that before a determination of criminal conduct could be made, further investigation needed to be made into whether Carvalho had guilty intent when he used the gasoline.

“Law enforcement authorities are equipped with the necessary investigative and subpoena power to accomplish this task, which is well beyond the scope of work undertaken buy this firm,” the report said.

“The logical referrals are the Kauai Police Department and the Kauai Prosecutor’s Office,” said the report.

The independent investigators noted that he auditor had “concerns” about “potential conflicts of interest in the Police Department and Prosecutor’s Office.”

But it went on to say that any decision about such conflicts had to be made by those agencies and not the auditor.

“In an abundance of caution, the matter should also be brought to the attention of the State of Hawaii Department of the Attorney General as this department has both investigative and prosecutorial capabilities,” the report said.

The question of possible tax liabilities should be referred to the Kauai Department of Finance, said the report.

“If the County fails to take any corrective action regarding the taxing issues, the Auditor’s Office may also be required to make appropriate reports to the Hawaii Tax Department and the Internal Revenue Service,” the report said.

Minkin’s report also noted that previous Kauai mayors have been allowed to use county gasoline in their personal vehicles.

“Numerous individuals interviewed during this investigation indicated this (gasoline) usage is a known practice that dates back to multiple prior mayors,” investigators at a Honolulu law firm reported to the Kauai County Auditor in May.

But no one interviewed by the investigators could cite “appropriate legal authority” for the practice, the report said.

“A clear and articulated policy regarding the Mayor’s fuel usage should be promulgated to avoid the historical usage of fuel by the Mayor without the proper and appropriate authorization,” said the investigators.

November 17: Stole $5000 Gasoline? Warrant Not Issued for Arrest of Kauai County Mayor

read … Kauai Mayor's Attorney Denounces Prosecutor And Police Chief After Cabinet Member is Indicted for Theft

Seitz: Kauai Mayor Victim of ‘Personal Animosities at Local Level’

KGI November 20, 2012: The indictment against County Human Resources Manager Janine M.Z. Rapozo was released as public record Monday.

An arraignment is scheduled for Nov. 27 in 5th Circuit Court. Bail was set in the amount of $500.

Rapozo faces a second-degree theft charge for allegedly aiding Kaua‘i Mayor Bernard Carvalho Jr. in illegal use of a county fuel card in 2009 and 2010. She also faces 21 misdemeanor charges of falsifying business records.

“I think the charges are baseless,” said Rapozo’s attorney, Craig De Costa. “They are based on speculation and should be dismissed.”

De Costa said there is no criminal wrongdoing, and that he will be filing a motion today to dismiss all charges in the indictment….

The indictment also implicates the mayor. However, the document does not name him as a co-defendant, and as of Monday there had been no separate indictment filed with the 5th Circuit Court.

County officials declined to comment on the mayor’s appearance in the indictment. But his personal defense counsel did.

Attorney Eric Seitz said the mayor wishes to avoid the same kind of inflammatory statements that turned this administrative issue into a criminal matter. He disagreed with what he called an outgoing prosecutor’s actions, and said there is no substance or value to the charges.

“This situation will pass and it will be explained,” Seitz said. “I don’t want to polarize the issue. I want it to be resolved.”

The County Council sought the Attorney General’s opinion rather than allow personal animosities to play out on the local level, Seitz said. The mayor was willing to talk and cooperate in two investigations, he said.

November 17: Stole $5000 Gasoline? Warrant Not Issued for Arrest of Kauai County Mayor

read … Personal Animosities

Borreca: Fiscal Cliff OK, Abercrombie Will Pay for What Inouye Cannot

Borreca: Perhaps not as well-known is that along that fiscal cliff, there is a Hawaii ledge.

The Pew Center on the States last week released a report on how the threatened drastic cuts in federal spending will impact the states.

Hawaii gets a special mention. Noting that all state economies are vulnerable to cuts in federal spending, Hawaii could lose a lot.

"In 2010, federal defense spending on procurement, salaries and wages made up almost 15 percent of Hawaii's GDP or gross domestic product," the report said.

So far there is just uncertainty regarding how much will change in Washington regarding the "fiscal cliff," which Pew describes as a series of federal tax increases and spending cuts set to start in January.

Besides the possible federal cuts to Hawaii defense spending, there is $32 million in state programs possibly at risk.

"All the programs that we care about the most are going to be significantly hit," Kim Gennaula, president of Aloha United Way, said according to a report in this paper.

If we don't want to spend Thanksgiving petrified, here is some relatively good news: The state has a lot of money. Perhaps not as much as we need or more than we plan to spend, but a $300 million surplus is not bad.

At the end of the last fiscal year, Gov. Neil Abercrombie announced that the state was doing well enough to be able to count a $300 million surplus. The news was not greeted with great cheers of joy because the administration, the Legislature and the public worker unions all have their eyes on the money.

Still there is now an official report on how well Hawaii is doing.

Fitch Ratings, one of three bond rating companies that check Hawaii's fiscal temperature, just finished a report to accompany an $800 million bond sale.

"Although debt and other long-term liabilities are likely to remain well above average for a U.S. state, Hawaii has demonstrated its ability to manage these costs," Fitch said.

read … About a Dog Chasing its Tail--or Taxing its way to Prosperity

Carlisle: $1.55B is on Track, Get Out of the Way

SA: "It's very, very disappointing to have Sen. Ino­uye start talking about how this will relieve traffic congestion when he knows this is one thing that it will not do," Slater said.

City officials acknowledge traffic will increase but say congestion would be even worse without rail.

Slater pointed out that the rail project still faces state and federal court challenges, and "they take precedence over the money." He said he thinks a federal judge will issue an injunction next month requiring that the city stop work on the project.

If that happens, "they may get the money but they can't spend it," Slater said….

Carlisle said the $250 million appropriation for Hono­lulu that Obama included in the proposed FY2013 budget is the single largest amount for any New Starts project in the United States. (The FTA's discretionary New Starts and Small Starts program is the government's main financial resource for supporting locally planned and operated transit "guideway" capital investments.)

Inouye promised to work "in a bipartisan fashion" with other members of Congress to win continued funding for the project.

When asked by the media what message he would give to rail opponents, Carlisle said, "Rail is on the way. We've got the money. Get out of the way."

read … Railroaded

Slom: My Opposition to PLDC and TOD has not Changed

CB: On Friday Sen. Sam Slom was appointed vice chair of the Senate Committee on Economic Development and Housing, which will be chaired by Sen. Donovan Dela Cruz.

"Senator Slom is a small businessman, and sometimes we need to look beyond the partisanship and get to the skill sets," explained Senate Majority Leader Brickwood Galuteria. "That's the primary reason he will serve as vice chair, and why we are crossing the aisle."

As the lone Republican, Slom already has a seat on all committees, which now number 16, up from 14 during the 2011 and 2012 sessions. Whether Slom will have any real power is unclear, however. Leaders in the Democratic majority will still call the shots on which bills are heard or not.

As a vice chair, though, Slom can schedule Economic Development and Housing hearings and preside over them if Dela Cruz allows it. Though Republicans have had little success in seeing their own legislation passed, Slom thinks he will be able to hear GOP bills that are related to economic development and housing.

"I think I will have real influence," he said.

Slom said Senate President Shan Tsutsui approached him about the post. And Dela Cruz also has assured him his views will be fairly heard.

"Let's face it," Slom said, "oftentimes appointments are made or offers of committees given with the tacit understanding that everybody will be singing 'Kumbaya' — that we will all be on the same page. And anyone who knows me knows I respect working with colleagues but will not change my views. So, that was clear (to Tsutsui and Dela Cruz), to their credit.

"And we are speaking specifically about my opposition to transit-oriented development and the Public Land Development Corporation and fast-tracking of government projects. I will not change my position just because I am vice chair."

read … PLDC

Solar Tax Credits: A Constituency of Dependency

Marco Mangelsdorf, CB:According to published reports, the hit from this tax credit on the state’s General Fund was close to $35 million in 2010, about $70 million in 2011 and is projected to be over $170 million this year. And due to the 24.5 percent refund option in lieu of the 35 percent credit, about a third of that $70 million from 2011 filings was refunded to photovoltaic system purchasers with a substantial portion of those refunded dollars having left Hawaii and gone to mainland banks and investors.

These growing sums and the belief that there has been a lack of adequate clarity in the letter and application of the rules by the Department of Taxation led DoTax to issue new rules on Nov. 9 to govern how homeowners and businesses can take this tax credit starting in January 2013.

This action has led to some of the most hysterical and over-heated rhetoric that I have heard in my 34 years in the renewable energy business with some in the industry and their supporters warning of an impending apocalyptic collapse of the industry if the tax credits are reduced, not eliminated, but simply reduced. Beyond this dependency that has been created and the predictable reaction to a threat to the subsidy amounts, what’s been lost in this discussion is the intent and purpose of such a tax credit in the first place….

By the end of 2012 it’s likely that there will have been about as many PV systems installed across the state in the past year as there were over the previous 10+ years combined. And the installation of those approximately 10,000 systems in 2012 was in large part made possible by one of the more generous state subsidies in the nation along with the 30 percent federal tax credit which is scheduled to last through 2016. An economy of scale has been reached here. The cost to go solar electric has never been cheaper with no sign of prices going up in this hypercompetitive market. It is the time to have a serious discussion on whether the rationale still exists to have a state taxpayer-funded subsidy for PV system purchasers and if so at a level that reflects a very different playing field compared to when the existing tax credit law was enacted years ago.

read … Solar Tax Credits: A Constituency of Dependency

OHA for Everyone

HR: On November 18, 2012, Derek Kauanoe wrote a letter in the Star Advertiser that complained about out-of-state contributions to people running for OHA Trustee by critics of OHA. As a staunch, long time critic of OHA, who was born and raised in Hawaii but lives in California now, and as a contributor to Keli'i Akina's campaign this past election, Mr. Kauanoe was speaking specifically about me. In the spirit of open communication, I'd like to take the time to directly answer his three questions laid out in his letter.

Related: Demographics: OHA Cronies Panic over Kelii Akina Campaign

read … OHA for Everyone

Film Office: Pornos Not Eligible for Tax Credits

HNN: "I think we'll be more wary," Hawaii state film commissioner Donne Dawson said.

She said being a bed for porn production could hurt Hawaii's family friendly image. There is a safeguard in state law that outlaws porn shoots on public property.

"It does require of us to be constantly vigilant to make sure productions conduct themselves in a manner that is in keeping with our community," she said.

Adult film producers can't qualify for Hawaii's film tax credit. Even if they were granted a permit, they'd have to have $1 million dollars in general liability insurance and $1 million in auto liability insurance. Plus, a Hawaii statute prohibits producing or directing porn performances for money.

Enforcing it is another matter.

Despite the road blocks, religious liberties attorney James Hochberg is concerned by Flynt's comment.

"I certainly hope the prosecutor is wiling to take this on. And if not, that the legislature will take this on," he said.

Dawson said porn companies have applied in the past for Hawaii permits but were denied permission.

"Once you figure out what it is, you put two and two together," she said.

Totally Unrelated: Fukunaga Running to Continue Act 221 Tax Credit Scams

read … No Porn 

Senate bill rewrite lets feds read your e-mail without warrants

CNET: Proposed law scheduled for a vote next week originally increased Americans' e-mail privacy. Then law enforcement complained. Now it increases government access to e-mail and other digital files.

read .. Leahy

Fiscal Health of States Shows Growing Divergence

WSJ: “We are seeing a widening, or pulling apart, of our highest and lowest-rated states,” said Paul Mansour, a managing director at Conning and one of the report’s authors.

Factors such as growing unfunded pension liabilities and burgeoning fixed costs related to programs like Medicaid are weighing down weaker states, while stronger states are benefiting from improved business conditions and strong employment growth, he said.

A closer look at some specific metrics shows this fiscal disparity. Economic debt as a percentage of personal income in Hawaii is 48%, but that percentage is only 1.8% for South Dakota, the report said. Conning rates Hawaii 38th among all states in its report, while South Dakota is rated seventh.

Conning’s measure of economic debt includes net tax-supported debt, as well as unfunded pension liabilities, other unfunded health and retirement benefits and state borrowing from the federal government for unemployment benefits programs.

read … Hawaii 38th

JPAC's accounting for MIAs both essential and obligatory

SA: The efficacy and value of JPAC were recently questioned by Dr. Michael Rethman in a commentary ("JPAC's honorable mission no longer worth the cost," Star-Advertiser, Island Voices, Nov. 14). His views are markedly different from the perspectives of many who know JPAC's work. His facts differ as well.

JPAC is not just about the money, and our mission is more than obligations that are codified in federal law. In short, JPAC is far from being a "non-essential government operation."

This year alone, we've identified more than 113 unaccounted-for service members, not the one identification yearly claimed by Rethman. Given Congress' goal to build capacity and capability for 200 original identifications annually beginning in 2015, I'm certain we'll significantly add to the more than 1,800 heroes we've already brought home and identified since this noble mission began in 1973….

Above the door leading into the JPAC laboratory is President Calvin Coolidge's sage advice: "The Nation which forgets its defenders will be itself forgotten."

read … JPAC's accounting for MIAs both essential and obligatory



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