Sunday, June 23, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, July 21, 2019
The Special Land and Development Fund
By Tom Yamachika @ 5:00 AM :: 3920 Views :: Hawaii State Government, Small Business

The Special Land and Development Fund

by Tom Yamachika, President Tax Foundation Hawaii

In this week’s spotlight is the Special Land and Development Fund or SLDF, which is administered by the Department of Land and Natural Resources (DLNR). Into that fund goes all land rents the State receives for land that is either leased or used under a revocable permit (such as those used by airport or harbor-based businesses).

The fund is also fed by earmarks on two taxes. HRS section 248-8 gives it 0.3% of the highway fuel tax up to $250,000, and HRS section 237D-6.5(b)(5) gives it $3 million of the transient accommodations tax, each year.

Recently, the State Auditor came out with Report No. 19-12 concentrating on this fund. The Auditor raised some questions about the way the fund and some of the underlying state lands were managed, and the Department of Land and Natural Resources (DLNR) took umbrage with quite a few of the Auditor’s findings.

Just to give you a flavor of the underlying mentality, the first page of DLNR’s response to the audit findings touted “the Land Division’s planning, implementing and accounting efforts [such that] the annual revenues for the SLDF increased exponentially from $6.3 million in 2010, to over $20 million in 2018.”

In response, the Auditor thought it interesting to use 2010 as the starting point because it was a tremendous drop from the prior three fiscal years, where revenues averaged $8.4 million. Also, part of the increase was due to the $3 million from the TAT earmark, which took effect in 2016 (Act 117 of 2015), so how could DNLR’s Land Division take credit for that?

Also, there seemed to be some problems with basic math. In 2018, DLNR told the Auditor that the SLDF consists of a parent account and 24 subaccounts. That information was used to create Report No. 18-19. This time, the Auditor pointed out that 23 subaccounts weren’t reported to the Legislature. DLNR’s response was that the SLDF has only one subaccount, and that the 23 other subaccounts, which together contained over $1 million, were sent to other divisions within DLNR.

Huh? Even if the 23 other subaccounts were being managed by different divisions within DLNR, the subaccounts are still under the SLDF as the parent account and are still within DLNR.

Apparently, DLNR’s Land Division apparently has a “silo mentality” that is so strong that “we don’t manage it” means “it doesn’t exist.” But the response to the Auditor isn’t supposed to be Land Division’s response, it’s DLNR’s response. The response was on DLNR letterhead and signed by its chairperson, so why doesn’t it contain input from the other affected divisions?

Finally, let’s focus on another statistic the Auditor pointed out: the delinquency rate on State lands rented out. As of the end of June 2017, DLNR had $7.3 million in accounts receivable. $2.1 million of that, or 29%, was more than 60 days unpaid. Of the $2.1 million, DLNR determined that $1.6 million, or 75%, was uncollectible.

DLNR’s response: “However, the Auditor’s report fails to cite to comparable delinquency rates from other State or County landlords … or the private sector. Therefore, the Department believes this criticism lacks support and is unwarranted.”

Excuse me? Rent is being charged for state lands (less than market rate in many instances), the rent isn’t being paid on time 70% of the time, and it will never be paid more than 20% of the time. True, those statistics apply to just one point in time, but if you were the landlord and those statistics came from your property management company, wouldn’t you at least be asking questions? Would you even care about “comparable delinquency rates”? By the way, you’re a taxpayer so you ARE the landlord.

Stop shooting the messenger and concentrate on cleaning house!


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii