BY MALIA ZIMMERMAN - HONOLULU — The Hawaii Health Connector, the local Obamacare exchange, has a new campaign to boost enrollment — “Tell a friend.”
“Let your family and friends know you care about their health and happiness; forward this email and tell them to get covered!” the ad says.
The exchange pushes government subsidies, as well.
“Many people are now eligible for new or improved coverage. You may be eligible for subsidized premiums if you make up to $52,920 a year as an individual or up to $108,360 for a family of four," it says.
The exchange formed partnerships with about 30 community agencies, issuing hundreds of thousands of dollars in grants to boost enrollment. The Sovereign Councils of the Hawaiian Homelands Assembly got the most recent grant, $675,000, on Tuesday. The group will try to recruit people by visiting homes of native Hawaiians who live on one of 34 state-managed properties for native Hawaiians.
Gov. Neil Abercrombie predicted “hundreds of thousands of people” in Hawaii would register for Obamacare, yet it has the nation's lowest enrollment numbers, a U.S. Department of Health and Human Services said last month.
The report says 4,467, people have signed up, but that number could be even lower because it's not clear whether those people have paid for their insurance.
The Hawaii Health Connector received $204 million from the federal government to set up the exchange through 2014, and it's supposed to be self-sustaining by 2015.
The current business model relies on a 2 percent sign-up fee from each plan, but that hinges on as many as 300,000 people signing up.
The House passed measures allowing the state to take over and increase fees. The legislation also asks for more transparency from the exchange, which, citing its nonprofit status, has refused to disclose key data.
House Health Committee Chairman Della Au Belatti said it will cost the state $15 million a year to subsidize Obamacare.
Based on expenditures in other states with similar populations, the cost could be higher — $18 million to $24 million a year — said Senate President Donna Mercado Kim.
Kim opposes a state takeover and points to the exorbitant cost for each enrollee — $45,668.
Hawaii, she said, has had a successful health-care system since 1976 , the Prepaid Healthcare Act, which requires business owners to offer insurance to employees who work more than 20 hours per week. Kim, a Democrat running for Congress, asked why President Obama failed to exempt Hawaii from federal law.
Kim has been critical of Montreal-based CGI Group Inc, which created Hawaii’s portal. The company got $53 million for the site, which for more than two weeks failed to work after it launched Oct. 1. The site relaunched Oct. 15, but ongoing complaints include cumbersome technology, frequent crashes after forms are filled out and submitted, confusion over plan pricing and scrambled information transmitted to the health-care providers.
Reach Malia Zimmerman at Malia@hawaiireporter.com
HONOLULU — Hawaii lawmakers want to help the state’s seniors avoid a situation where they’ve fallen — and can’t get up.
The Legislature plan to allocate $80,000 for a new “fall prevention coordinator” position in the state Department of Health’s Emergency Management Division.
As Hawaii’s senior citizen population grew 116 percent over the last two decades — more than double the national pace of 47 percent — health department officials say the position will help Hawaii’s seniors remain healthy, productive and active.
Stanley Michaels Jr., 73, an employee with the state Department of Health, is the state’s current part-time, volunteer falls prevention coordinator.
Michaels, who took a bad fall himself leading to a hip replacement, said 8,700 Hawaii senior citizens go to the emergency room each year, costing the state $10 million annually just for transportation.
An estimated $90 million is spent on emergency room and hospital visits for seniors who took serious falls in which they broke their hips or hit their heads, with rehabilitation costs at about another $90 million, Michaels said.
The costs are expected to increase as Hawaii’s elderly population age 65 and up reaches 20 percent of the population by 2030.
Michaels currently gives presentations to seniors and caregivers, recommending seniors get their vision checked annually and review all medication side effects with a doctor or pharmacist; “safety proof” their home so there is no clutter, extension cords, throw rugs, or items on the floor; and exercise and carry an electronic monitoring device.
The suggestion to expand his presentations through a state-funded full time falls prevention coordinator and a taxpayer funded educational campaign emerged from task force that met for more than year to study the issue and determine possible solutions, Michaels said.
Senate Human Services Committee Chair Suzanne Chun Oakland agrees the government-funded position is essential because no nonprofit or private entity could coordinate fall prevention in the state with the authority of the state government.
Oakland said a coordinator could help keep seniors out of the hospital and decrease costs to the state.
However, Senate Minority Leader Sam Slom, the only Republican in the 25-member Senate, is opposed to adding the cost to the state budget bill.
“There is no question that falls are a major problem for seniors, but this bill, which has been pushed for years, will not prevent falls,” Slom said.
“Government wants a coordinator for all of life’s risks,” Slom said. “Taxpayers should not fall for more bureaucracy.”
BY MALIA ZIMMERMAN - HONOLULU – Hawaii wants doctors to start measuring kids’ body fat, which will be recorded and sent to the local Obamacare exchange. Health insurance companies would be required to cover the expense.
Under a proposal gaining momentum in the Hawaii State Legislature, parents would be required to submit their children — 2 to 18 — to a Body Mass Index measurement when visiting a doctor.
Senate Health Committee Chair Josh Green, an emergency room doctor in Kona, introduced the measure with support from fellow Senate Democrats Suzanne Chun Oakland, Roz Baker, Russ Ruderman, Maile Shimabukuro and Laura Thielen.
Senate Health and Human Services Chair Suzanne Chun Oakland said she signed on to the legislation because it will help students to improve their Body Mass Index if they need to, and could prevent them from becoming overweight later in life. She said obesity can lead to diabetes and other medical conditions. "This is just another tool to help our young people," Chun Oakland said.
Dr. David Sakamoto, deputy director of health resources for the state Department of Health, says Hawaii has an obesity problem, which leads to chronic disease. Clinically assessed and electronically transmitted data on body fat would “enhance public health surveillance capacity,” Sakamoto said.
Hawaii was ranked as the healthiest state in 2013, according to America’s Health Rankings, for having “low rates of uninsured individuals, high rates of childhood immunization, and low rates of obesity, smoking and preventable hospitalizations,” but could improve its “higher than average rates of binge drinking and occupational fatalities and lower than average rates of high school graduation.”
Sakamoto, however, claims Hawaii’s adult population is relatively unhealthy — 82 percent of adults are battling at least one chronic disease, 53 percent are fighting two or more, and 31.5 percent have three or more.
Hawaii spends an annual $470 million on obesity-related medical costs, Sakamoto said, and another $770 million on diabetes-related medical costs.
“All Hawaii residents share the burden of chronic disease in terms of quality and length of life as well as their pocketbooks,” Sakamoto said. Obesity counseling is now “a required benefit” under the Affordable Care Act and requiring Body Measurement Index screening by physicians and pediatricians “will help identify children who can utilize this new benefit.”
Tracking people when they’re young will likely determine obesity in adulthood.
The bill got little public attention. Besides the state health department testimony, just a handful of people testified in support, none in opposition.
Hawaii resident Leimomi Khan supports the bill. She cites a National Initiative for Children’s Healthcare Quality study that says “approximately 34,000 of 128,000 Hawaii children between 10 and 17 years old — or 26.9 percent — are considered overweight or obese according to BMI-for-age standards.”
“With the high cost of nutritional foods, clearly low-income communities are probably the most affected,” Khan said. “The provisions of this bill would enable physicians to detect and address overweight problems at an early age.”
Senate Minority Leader Sam Slom cast the only vote opposing the bill, which passed the Senate Ways and Means Committee on Wednesday. He’s also the only Republican in the 25-member Senate.
“As a rule, I don’t support any government mandates. This should be an issue between a physician and parents, and not government,” Slom said.
Slom takes issue with the bill data being given to the “failed Hawaii Health Connector,” the local Obamacare exchange, and that insurance would be required to cover the procedure.
“This adds to the cost of all premium payers,” Slom said. “Better choice would be to measure the fat in government and slim down.”
Green and the co-sponsors could not immediately be reached for comment, but the committee report and language in the bill details the reasons for their support.
The bill must pass the full Senate and House and gain the approval of Gov. Neil Abercrombie before it becomes law.
BY MALIA ZIMMERMAN - HONOLULU — Hawaii has the lowest number in the nation of enrollments through its Obamacare exchange, Hawaii Health Connector, according to a Feb. 12 U.S. Department of Health and Human Services report.
“That’s horrible,” said state Rep. Bob McDermott.
Just 3,614 people enrolled in the state’s exchange, but the report does not disclose how many of those who registered also paid for their health care policies.
McDermott, who serves on the House Consumer Protection Committee, is one of several state lawmakers considering at least seven bills to “reform” the exchange, and launch a state government take over the nonprofit at a cost of $15 million a year.
The Republican said he sees are “dollar signs spinning in his head.”
“The exchange is already costing taxpayers $204 million, and the added bureaucracy is increasing costs for consumers and adding more layers for them to go through to get health care,” McDermott said.
The federal government allocated $204 million to Hawaii to operate its exchange and set up its network and website in 2013 and 2014.
By 2015, the Hawaii Health Connector must be self-funded. Funding can come from state subsidies, grants and fees charged to the health care providers on each policy sold. Internally, the Hawaii Health Connector reportedly planned on 300,000 sign ups during two years with a 2-percent fee charged on each policy.
Department of Human Services Director Pat McManahan professed during a Sept. 17, 2013, news conference that the Obamacare exchange would be “transformative” for Hawaii.
Gov. Neil Abercrombie praised the exchange, predicting “hundreds of thousands” of people would benefit in the state of Hawaii.
The governor also said the 100,000 people in Hawaii without health insurance would sign up — a prediction that fell short by about 96,386 people. So far, signups are under 1 percent of Hawaii’s 1.4 million population.
While the National Review called Hawaii’s exchange an “epic failure,” the Investor Business Daily, like Hawaii Reporter has in the past, did the math in a Feb. 14 article, noting the Hawaii exchange cost $56,819 per person.
“As the only senator who voted against the establishment of the exchange, I warned against a costly failure. That failure has now been confirmed,” said Senate Minority Leader Sam Slom.
Some local insurance industry experts said because Hawaii is unique in that it has had the Pre-Paid Health Act in place since 1976, which requires businesses offer health insurance to employees working 20 hours a week or more, Hawaii already has a high percentage of its population insured.
Because of the Pre-Paid Healthcare Act, the state also largely was supposed to be exempt from the Obamacare requirements, McDermott said.
House Health Committee Chairman Della Au Belatti said she wants the exchange to work, but thinks the state might be better suited to operate the Hawaii Health Connector. T
The state would need about $15 million a year, Belatti said in a recent news conference.
Her committee passed through measures that would allow the state takeover in 2015, and increase fees to help pay for the operation. The legislation also would require more transparency from the exchange, which has refused to disclose several key facts and figures to the media and to lawmakers, citing its independent nonprofit status.
The state also must tackle technical glitches that plague the site more than four months after its launch, state officials and industry experts have testified.
According to state technology guru Sanjeev Bhagowalia, the Connector portal is vulnerable to hackers who could expose private information.
Bhagowalia, the state’s IT director, supports a state takeover.
Expenditures, including the $53 million allocated to CGI Group to build the exchange website portal, also caught the attention of lawmakers.
Senate President Donna Mercado Kim, D-Moanalua, said she warned Hawaii Health Connector executives about past problems with the Canadian-based technology company. The state Department of Taxation spent millions on a GCI contract for a website that still doesn’t work properly.
As Kim predicted, the exchange’s website failed to work as expected for more than two weeks after it launched Oct. 1. Plans and pricing could not be displayed, and the system crashed when users tried to register.
Since the site relaunched Oct. 15, complaints include cumbersome technology, frequent crashes after the extensive forms are filled out and submitted, confusion over plan pricing and scrambled information transmitted to the health-care providers.
While the state House has introduced a number of measures to save Obamacare here, Kim said she’s not in favor of the state taking over the exchange operations, calling it a financial “black hole.”
The House has yet to negotiate the final outcome of the pending legislation with the Senate.
“I want to be clear that these measures are a work in progress and allows us to continue to establish a better framework and foundation so that the Health Connector can successfully move forward in fulfilling the goals of the Affordable Care Act,” said Belatti in a recent statement.
“Even as the (health care) landscape changes around us, we need to be able to respond to the developing rules and regulations to allow the Health Connector to move forward in achieving its mission.”
The measures must gain the approval of the majority of the 51-member House before moving to the Senate, and then it goes to the governor for consideration.
The Hawaii Health Connector, meanwhile, has stepped up its advertising efforts in recent days, purchasing exclusive media contracts the Connector won’t make public.
In one of Hawaii's most notorious missing person cases, Peter "Peter Boy" Kema Jr. vanished on September 11, 1997, on Hawaii Island at the age of 6, but his mother, Jaylin Kema, didn’t report him missing until January 1998.
Under a proposal pending in the Senate, Jaylin and Peter Boy's father, Peter Kema Sr., could be charged with felony for not reporting the death or disappearance of their child within 48 hours.
Peter Kema Sr. told police he took his son during the summer of 1997 to Aunty Rose Makuakane, a family friend he claimed lived on Oahu. Police could not confirm the woman existed or that the father was telling the truth.
In 2005, the state released 2,000 documents on his case that revealed the terrifying life this child endured, because of an abusive father. (See highlights in the Honolulu Advertiser archives)
According to the documents, Peter Boy's sister disclosed to a psychologist about a year after her brother went missing that she saw his lifeless body in the trunk of her father’s car and in a container in a closet in their home. The sister claimed the parents took the container to Honolulu.
The sister also disclosed that her father severely beat Peter Boy, stripped him naked, threw him into a trash bin and forced fed him feces. Her mother was also intimidated and beaten, the sister said.
Peter Boy was placed into a temporary foster home in August 1991 after being admitted to the hospital with injuries that suggested child abuse, records show. The documents also revealed Child Protective Services received other allegations of abuse and neglect involving the Kema kids.
Peter Boy would be 22 years old today.
There are dozens of children in Hawaii who go missing every year. The Department of Human Services web site features 71 missing children, including Peter Boy.
On Thursday, the state Senate will hear Senate Bill 2160, named Caylee’s Law after Caylee Anthony, which would make it a felony if a parent or guardian does not report the death or disappearance for more than 48 hours of a child.
The bill was introduced in several other states after the Casey Anthony trial, which revealed Anthony did not report the disappearance of her 2-year-old daughter Caylee Marie Anthony for 31 days.
The Hawaii bill, introduced by Senate Minority Leader Sam Slom with support from Senators Suzanne Chun Oakland, William Kahele, Malama Solomon and Glenn Wakai, also establishes penalties for caregivers who fail to report the death or disappearance of a child to law enforcement or who provide false information to law enforcement authorities.
BY MALIA ZIMMERMAN - HONOLULU — Hawaii has some of the most generous welfare benefits in the country, and one man took full advantage of them.
The man, who went by the name “Vaughn Sherwood” — a name he apparently stole — took more than $200,000 from taxpayers, the FBI said.
On Thursday, shackled in handcuffs and dressed in a white prison uniform, he pleaded guilty in U.S. District Court to four counts related to theft of government property, identity theft and illegal possession of a firearm.
Under oath, “Sherwood,” 67, willingly admitted to using eight names, nine Social Security numbers and six dates of birth to create a variety of identities to take welfare cash, food stamps, student tuition assistance, public housing subsidies and Medicaid.
According to Ron Johnson, the assistant U.S. attorney handling the case, the man inherited $360,000 from his deceased parents and, without disclosing it to the government, hid the cash in two safe deposit boxes at two banks. The federal indictment revealed Sherwood also owned a sailboat and a jet boat and drove a Mercedes Benz S420.
He lived in an apartment in Waikiki, yet he admitted Thursday he obtained $6,500 in welfare cash payments, $5,800 in food stamps and $24,000 in medical benefits from the state Department of Human Services over nine years. He claimed he was homeless.
Court records also show the man secured $109,000 in Section 8 housing assistance over a 14-year period from the city and county of Honolulu.
Sherwood acknowledged Thursday that his under graduate and master’s degree tuition at the three University of Hawaii campuses were paid with federal student tuition assistance.
Using a false identity and claiming to have heart failure, he applied with the Department of Human Services to be his own caregiver in 2009 and received $8,000 from Medicaid.
He obtained a firearm by mail using a third party, even though he was already a convicted criminal.
The FBI now knows in 1999 he legally changed his name to Kevin Patrick Halverson in Hawaii, and he stole several other identities, including those of Vaughn Sherwood and Kevin Halverson, who were living in other states.
Federal Magistrate Judge Kevin Chang was unsure what to call him in court and finally settled on “Mr. Halverson.”
“Keeping these public aid scams alive under so many identities was a full-time job for this defendant,” said FBI Special Agent Tom Simon, who worked on the case with other federal investigators and the Department of Human Services. “If only he would have put that time to legitimate work, he wouldn’t be sleeping in jail tonight.”
The man has been held in federal prison since being arrested Oct. 18. His sentencing is set for May 22. He could face up to 22 years in prison and may have to pay restitution and fines.
Reach Malia Zimmerman at Malia@hawaiireporter.com
REPORT FROM THE SENATE MAJORITY - HONOLULU - The Senate Human Services Committee is scheduled to hear Senate Bill 2346, a bill supporting seniors, on Tuesday, February 4 at 1 p.m in room 016 at the state capitol.
State lawmakers have proposed legislation to protect seniors from financial abuse, support healthy aging programs and increase public awareness of long-term care.
In the last 30 years, the number of seniors over 60 in Hawaii grew by nearly 140 percent and seniors over 85 increased by more than 430 percent. Studies project that Hawaii seniors over 60 will make up nearly a third of the State’s total population.
SB 2346, Relating to Aging, is a two-part bill that funds healthy aging programs and services, and provides resources for the implementation of a public education and awareness campaign on long-term care. Most successful senior programs recognize and build upon integrated health and social services.
The bill allocates a total of $6.6 million to support community-based programs that incorporate collaborations between health care and social service agencies.
The second part of the bill provides $500,000 for the Department of Health’s Executive Office on Aging to implement a public education and awareness campaign to help better prepare Hawaii residents in planning for future long-term care needs.
Congressional candidate Kathryn Xian is sponsoring state legislation to enact a Houseless Person's Bill of Rights,” introduced by Vice Speaker John Mizuno as House Bill 1889. Xian's proposal would contravene municipal crackdowns on homelessness, which include sweeps that confiscate homeless people's private property and attempts to limit access to public space.“We need to both uphold justice and maintain democracy. With the recent criminalization of the houseless and passage of city ordinances eroding the basic civil rights of our neighbors in poverty, we have put democracy in the backseat and dangerously established the legal sanction of a class of people based on lack of income,” said Kathryn Xian. To date, the City and County of Honolulu has spent more than $330,000 enforcing sidewalk nuisance regulations that went into effect last year, despite the recent recognition by federal courts that homeless people's property is protected by the Constitution's due process and the Fourth Amendment's privacy guarantees. “Between 2004 and 2008, the City of San Francisco, spent $9.8 million on incarcerating the houseless, which succeeded only in wasting taxpayer dollars. These laws did not solve their houseless issues nor did it increase public safety. We must not follow their mistake. We need proven solutions to address poverty reduction, including raising the minimum wage, offering tax relief to low-income workers and families, and investing in public education,” said Xian. Xian also believes that the measure advances Hawaii's fight against human trafficking by affording homeless and runaway youth the rights needed to stave off exploitation. “Many of our child survivors of trafficking are houseless youth. Criminalizing their vulnerability is not only immoral, but unconstitutional. Who will speak out for these children when the government proceeds with hurtful sweeps in blind persecution of their plight?” asked Xian. House Bill 1889 is currently referred to the Human Services Committee and Finance Committee.
BY MALIA ZIMMERMAN - HONOLULU – She promised she hasn’t inhaled, but House Majority Floor Leader Rida Cabanilla said she hopes to legalize cultivation, manufacturing and exporting of Marijuana and Marijuana food products in Hawaii to pay off the state’s billions of dollars in unfunded liabilities as well as make infrastructure repairs and fund public education and human services programs.
“This state would turn into a manufacturing state. Can you imagine factories that would be making 'Maui Wowie' cookies and making Marijuana macadamia nut candy for export? I think that would be wonderful,” said the Democrat lawmaker, who represents Ewa Villages, Ewa Beach, Ewa Gentry, Ocean Pointe, West Loch.
Hawaii has some $25 billion in debts, encompassing the state retirement system, the public employee union health fund, and outstanding bonds. The state also needs billions of dollars in repairs for roads, schools and infrastructure.
“I am not even a fan of it. But if that is what it takes for our state to be in the forefront where we can fix our roads, we can build more affordable housing, we can help the homeless - that is the route we should go.”
Her colleagues support the plan, Cabanilla said, but won’t necessarily come out and say it.
“…Even though the governor says we are $900 billion in the positive, (there is) this lingering problem about unfunded liabilities and funding preschools and more affordable housing. Those still have to be funded. For many years we have put on this thing about gambling and it doesn’t pass the House because they don’t want it here. … But this one, everybody benefits. The farmers, the manufacturers, and with the revenue that we are going to get, that proliferates in every household in the state,” Cabanilla said.
Billions of dollars is Cabanilla’s estimate of what the industry would bring to Hawaii.
“The state of Colorado made $1.6 billion in two weeks just by selling it. How much do you think we're going to make for producing it and selling it? When we are the best. We are the best. We have the best marijuana in the world. I haven't tried it but the people that have tried it say, ‘Wow!'" Cabanilla said.
The first step in Cabanilla’s plan is to pass House Bill 2124, putting the state’s Department of Business, Economic Development and Tourism and Department of Agriculture in charge of a working group that would outline a plan to legalize the cultivation of Marijuana in Hawaii for sale and export to foreign jurisdictions, such as the Netherlands, where Marijuana usage is legal.
Then when the federal government lifts restrictions on Marijuana use, Hawaii would be “ready to rock,” Cabanilla said.
“Commercial cultivation and distribution of Marijuana is a bold approach toward generating revenue while capitalizing on Hawaii’s inherent strengths,” Cabanilla said. “Hawaii’s rich soil coupled with its temperate climate provides ideal conditions for year-round farming and cultivation. Hawaii is well situated to provide an abundant supply of quality Marijuana to fill a growing international demand.”
While Hawaii already has among the highest overall taxes in the nation, Cabanilla said the taxes on Marijuana exports would be sky high – at least 25 percent.
“Whatever tax we can get, it will be enormous. Whatever tax we can come up with, it will be there. And people in Hawaii will be so happy, because this may be the state that they don’t have to pay property tax,” Cabanilla said. “This is going to be an economic engine unparalleled by anything else because we have the perfect soil, and we have the round climate to grow them and our farmers will never be poor again.”
Cabanilla has the backing of co-sponsor Rep. Richard Creagan, M.D., a Democrat who represents Naalehu, Captain Cook, Keauhou.
Even though recreational Marijuana use is illegal in Hawaii and moving Marijuana across state lines or on federal property is illegal, Creagan said a working group will prepare the state for future changes in drug policy.
“Our country is moving towards an eventual goal of legalizing marijuana. It's legalized in a host of states (including Hawaii) for medical reasons and when you look at the risk benefit of marijuana versus other things like narcotics the risk is small and the benefit is huge," Creagan said.
Rep. Faye Hanohano, a Democrat also from Hawaii Island, endorsed Cabanilla’s bill, and said she too has introduced four Marijuana related bills that do everything from legalize Marijuana to establish medical Marijuana compassion centers.
“It is already growing. Of course, it is illegal,” said Hanohano said about Marijuana on her island, which is known for its “Kona Gold.”
But advocates who hope Marijuana will be legalized soon in Hawaii, shouldn’t hold their breath.
Under her plan, the Marijuana Cabanilla hopes will be grown in the islands won’t be available to local people or other Americans quite yet – just to foreigners.
"I don't agree that our people should be using it, but I mean, if those countries that have accepted it for their people and they have laws in place for it – who am I to judge?" Cabanilla said with a shrug and a smile.
HONOLULU - In the interest of economic development, Rep. Rida Cabanilla (Ewa Villages, Ewa Beach, Ewa Gentry, Ocean Pointe, West Loch) has introduced HB2124 that asks the Department of Business, Economic Development, and Tourism in consultation with the Department of Agriculture to convene a working group to develop an action plan to legalize cultivation of marijuana in Hawaii for sale and export to foreign jurisdictions where usage is lawful.
All commercial activities from the production and export of marijuana and marijuana-related products will be taxed and revenues would be utilized for public education, health care and human services programs.
“Commercial cultivation and distribution of marijuana is a bold approach toward generating revenue while capitalizing on Hawaii’s inherent strengths. Hawaii’s rich soil, coupled with its temperate climate, provide ideal conditions for year-round farming and cultivation. Hawaii is well situated to provide an abundant supply of quality marijuana to fill a growing international demand,” said Cabanilla.
HONOLULU - State lawmakers on Wednesday announced a package of priorities to address affordable housing and homelessness for the 2014 legislative session.
Much of the package focuses on a variety of funding mechanisms to help put more working individuals and families who find themselves homeless into safe and stable living environments.
“About 40 percent of Hawaii’s homeless are people who work and just can’t find affordable housing,” said Sen. Suzanne Chun Oakland, chair of the Senate Committee on Human Services. “In 2011, the Hawaii Housing Planning Study revealed that 50,000 new units would need to be built between 2012 and 2016 to meet new demand generated by changing demographic and economic conditions. Of that amount and based on HUD Income Guidelines, about 19,000 new units are needed for household incomes of 80 percent of area median income and below.”
“One place where we can start to make improvements is supporting programs addressing the shortfall in affordable rental housing units,” she added. “We can do this by restoring to 50 percent the allocation of the conveyance tax collections to the rental housing trust fund. We reduced it to 20 percent during the recession to address the State’s budget crisis; however, it’s time we restored these funds, which would provide for about 30 million dollars a year to build more affordable housing.”
Other bills in the package provide support for Housing First, creates a universal children’s savings account program, and establishes a home ownership revolving fund, among others. (See below for list of all measures introduced as part of the Housing & Homeless Legislative Package.)
The package is a collaborative effort of the Housing and Homeless Task Force, which was created to bring together homeless service provider, businesses, developers, financial institutions, current and former homeless individuals, and representatives of all levels of government. It aims to address Hawaii’s housing shortage and to create viable solutions to address homelessness.
Priorities of the 2014 Housing & Homeless Legislative Package
HB1934Relating to Housing
Part I: Appropriates funds to the department of health for substance abuse treatment, mental health support services, and clean and sober housing services. Part II: Appropriates funds for a rental assistance program, also known as a shallow subsidy program. Parts III and IV: Appropriates funds to the department of human services to continue to administer housing first programs for chronically homeless individuals and to reestablish the homeless prevention and rapid re-housing program. Part V: Appropriates matching funds for the federal continuum of care permanent supportive housing programs to provide rental assistance in connection with supportive services. Part VI: Appropriates funds for the homeless assistance working group. Part VII: Transfers the homeless assistance working group from the department of human services to the legislature. Requires the chairpersons of the senate and house of representatives committees on human services to convene the homeless assistance working group instead of the director of human services, or a designee.
Similar: HB2059Relating to the Disposition of the Conveyance Tax Collections to the Rental Housing Trust Fund
No HBRelating to Housing
No HBRelating to Affordable Housing
Appropriates funds for the rental housing trust fund to build affordable rental housing projects, including projects with micro units, family units, and elder housing units.
No HBRelating to Housing
Establishes the homeownership revolving fund to assist households whose income does not exceed eighty per cent of the area median income by allowing the households to pay no debt service at zero per cent interest for the first sixty months and then pay interest on a graduated scale.
No HBRelating to Universal Children's Savings Accounts
Creates a Universal Children's Savings Account Program under the Department of Budget and Finance. Establishes and appropriates funds into the Universal Children's Savings Account Trust Fund.
Others bills in the 2014 Housing & Homeless Legislative Package
SB2265 – makes an appropriation to the Hawaii Public Housing Authority to improve the existing public housing stock and increase the supply of public housing units in the State
SB2267 – makes an appropriation to the Hawaii Housing Finance & Development Corporation for the construction of micro apartment housing units
SB2536 – appropriates funds to the Department of Hawaiian Homelands to build housing for beneficiaries on homestead land
SB2537 – appropriates funds to the Hawaii Housing Finance & Development Corporation to build affordable housing projects for veterans
SB2532/HB1947 – provides an exemption from, or reduction in, school impact fees for housing developments in which at least 40% of the units are rented or sold to persons or families earning up to 80% of the area median income
SB2539 – allows the Hawaii Community Development Authority to sell reserve housing, without legislative approval and in fee simple under certain conditions
SB2268 – requires a portion of the general excise tax to be deposited into the Hawaiian home administration account for operational expenses
SB2269 – requires the Hawaii Public Housing Authority to designate a resident manager at each federal housing complex and state low-income public housing project
SB2540 – establishes a rental deposit loan program within the Hawaii Housing Finance & Development Corporation to assist low income and homeless individuals and families in obtaining affordable rental housing
SB2534/HB1841 – establishes the Hale Kokua Program to incentivize homeowners statewide to set aside dwelling units for rental by families or individuals classified as employed but homeless
SB2541 – appropriates funds for the redevelopment, design and construction of the Hawaii Public Housing Authority's administrative offices on School Street and the creation of elderly housing
SB2538 – establishes the Hawaii Home Loan Guarantee Program to assist residents who have a steady, low or modest income, and yet are unable to obtain conventional financing with obtaining a home loan from a commercial lender that is guaranteed by the Hawaii Housing Finance & Development Corporation.
SCR2 – Concurrent resolution to encourage the Hawaii Public Housing Authority, Department of Hawaiian Homelands, Hawaii Housing Finance & Development Corporation and Hawaii Community Development Authority to build sustainable, multi-generational, mixed income and mixed use housing.
To access the Housing & Homeless Legislative Package online, visit www.Capitol.Hawaii.Gov and click on "Reports and Lists" then "Measures by Package" and select
"Housing and Homeless Legislative Package".
2014 State of the State address by Neil Abercrombie, Governor, State of Hawaii, Tuesday, Jan. 21, 2014 at the Hawaii State Capitol, House Chambers
Madame President, Mister Speaker, members of the Hawaii State Legislature, former governors, distinguished justices of the courts, mayors, representatives of our Congressional Delegation, other elected officials, honored guests, family and friends. Aloha.
As we begin our session I ask that we set aside our political preoccupations and reflect on the privilege we have to serve and the responsibility to look to horizons beyond our own concerns. I ask that we begin today with a moment of silence to honor Hawaii National Guard Sgt. Drew Scobie of Kailua, who died earlier this month in Afghanistan. He was only 25 years old. He leaves behind his wife, his 4-year old son, and another child yet to be born. Our hearts and best thoughts are with his family during this time. On March 25, the Legislature will hold its Joint Session for the Hawaii Medal of Honor Ceremony to recognize fallen soldiers with Hawaii ties. I, and I think everyone here, want to work for the day when we have no more fallen to recognize for their ultimate sacrifice, no more families to console for their loss. But, prior to that day, I ask for us to join in a moment of silence and reflection in honor of Sgt. Scobie and his family.
[MOMENT OF SILENCE]
When I entered office, we issued a call for a New Day in Hawaii. We presented and implemented a plan that has guided this administration and our state over the last three years through difficult times. We faced hard choices and had to make tough decisions. I am grateful for the Legislature’s collaboration as we navigated through troubled waters. The question before us then, is – what direction shall we now set our sights?
Where do we see our Hawaii – our people, our keiki and kupuna, our aina, and our businesses – in the future? To answer that core question, we need look no further than our island values. We must be trustees with a duty not just in the present, but to the long-term future of our islands. We must be stewards with a responsibility to protect our identity and our precious human and natural resources to become more self-sufficient.
The State Budget
For three years, we have strategically managed our resources, endured shared sacrifices, made fiscally prudent decisions, and have seen our economy improve. This has resulted in a general fund balance of $844 million in fiscal year 2013, a historically unprecedented figure that represents a turnaround of more than $1 billion since 2010! I want to extend my appreciation to the Legislature for helping to make some of those tough decisions, our public sector employees who made sacrifices, and the people and businesses of Hawaii whose faith and patience made this effort possible.
I am able to report to you, our state government’s financial house now stands on solid ground.
We are now entering a new phase. The administration’s package and supplemental budget do not rely on any new taxes or fees! On the contrary, as you will see, I believe we may be able to reduce taxes in key areas. We have the resources to deliver services to the people of Hawaii while living within our means. And, what is most important, is my administration’s budget philosophy ensures our budget is sustainable. Our financial plan accommodates fluctuations in revenue projections in the years to come.
We are stabilizing future costs and expenditures. We are concluding collective bargaining agreements, several of which are for multiple years. We have taken affirmative action in addressing our state’s unfunded liabilities – for medical benefits for retirees – and pensions, salvaging both from fiscal disaster.
We are committed to strengthening the finances of the state with a plan that builds our state reserves up to 10 percent of general fund revenues. These reserves will allow us to weather possible future economic downturns and to guard against the public service cutbacks of the recent past.
Financial rating agencies recognize our efforts and have improved their outlook assessment from negative to “stable” to “positive.” What then of the future? I shall outline a few central elements for your attention this morning, and I will address other issues in more detail – such as housing, agriculture, and energy – though messages to you in the days immediately following.
There is no more critical issue before us than early childhood development and education. I look forward to strengthening relationships with the private and nonprofit sectors by the passage of the constitutional amendment to provide for partnerships in early education. I appreciate the Legislature’s support last session for our expansion of the Preschool Open Doors program.
Administrative rules are nearly complete. The program envisions providing assistance to 1,200 families of 4-year-old children that will no longer be eligible to attend kindergarten as of Aug. 1 this year.
This modest approach is not enough. Some 5,000 4-year-olds will be affected by this change in the age-requirement. Some families have the financial capacity to afford the average pre-school rate of $8,100 per year. Many middle income families will struggle and have to make difficult choices. Most lessor-income families will be precluded from the option of making any choices.
We know that the early years of a child’s development are crucial in setting the foundation for a child’s behavior and lifelong learning. From birth to age 5 more than 85 percent of a person’s brain development takes place. An alarming number of our children are entering school without the basics needed to succeed in school, such as, wanting to read, vocabulary acquisition, and learning how to behave within a group.
Investing in our children’s early years will pay dividends down the road in the form of healthy and contributing adults, reduced crime and incarceration, and less dependency on social services.
We invest in ourselves by investing in early childhood education.
Our plan is to build and strengthen Hawaii’s mixed-delivery system of early learning programs. Community-based preschools are now and will be a key component. To expand access for 4-year-olds, we are proposing direct services in 32 classrooms across the state, half of which are on the neighbor islands.
We are seeking additional resources for Family-Child Interaction Learning programs. We are proposing support for families who participate in Preschool Open Doors. These requests total approximately $8 million. Our plan is targeted, aimed at helping those who otherwise have little or no options. These initial investments will serve an additional 1,040 children and their families.
I realize this is an election year. Political agendas and ambitions are being formulated. But let us take children out of these equations. Let us resolve – all of us – to be champions of children. You have my pledge and my word on that.
Our unemployment has improved to the fifth lowest in the nation. Three years ago, the Unemployment Compensation Trust Fund was practically bankrupt. Our progress over the last three years has allowed us to reduce Unemployment Insurance tax rates for 2014 by 35 percent. Employers will pay $130 million less in taxes, or $300 less per employee on average for 2014.
A hard-working sector in our community has gone seven years without seeing their wages rise. Therefore, I will be proposing a bill to increase the minimum wage by $1.50 to at least $8.75 starting in January 2015. Average weekly earnings have increased 16 percent since 2007. For minimum wage workers, it’s zero. Currently, 21 other states plus the District of Columbia have higher minimum wage rates than Hawaii while our minimum wage earners are confronted by much higher living costs.
It is a myth that increases to the minimum wage just benefits entry level workers, mostly teenagers. In Hawaii, 85 percent of minimum wage earners are 21 years old or older. The last four times the minimum wage was raised, on average, the number of jobs increased by of 2.2 percent over the following 12 months. Twenty percent of our children under six years of age, or 22,000 keiki, live in low-income working families.
I am aware the issue of tip credit in the hospitality/restaurant service sector was the stumbling block last year. I am prepared to accept a reasonable accommodation on this point. Employees who earn tips, as I did waiting tables at Chuck’s Steak House in Waikiki, have the opportunity to earn tips and to add to their income. Minimum wage earners in other jobs do not. They cannot offset any deductions. Let’s move quickly and resolutely on this issue.
Homelessness is an issue for which there is no simple answer. In 2011, I established the Hawaii Interagency Council on Homelessness. The council is comprised of state department directors, federal agency representatives and community, religious, and business leaders. Mayors and county councils across the state are united in coming to grips with this issue. On Oahu, where the need is greatest, we could not have a better partner than Mayor Kirk Caldwell and the City Council lead by Council Chair Ernie Martin.
In December, the interagency council submitted an action plan to you for your consideration. »We must now deliver on the Council’s plan; for example, by giving support to the “Housing First” program, which houses and cares for the chronically homeless and those who suffer from a disability. »Housing First, an evidence-based best practice, is being used in Denver, Seattle and Utah. It has established that providing housing and support services under this mode saves taxpayers money and reduces homelessness.
When I took office, many inmates served their sentences out of state. This sent Hawaii dollars out of state and took many inmates away from appropriate facilities and alternative programs here in the islands. In addition, it often decreased the chances of successful rehabilitation as prisoners were away from their families. Hawaii had no plan or commitment to do or act otherwise.
Nearly 2,000 prisoners were in Mainland facilities. At the end of the last fiscal year, we reduced that number by 600. Starting this July, more prisoners will be coming home when we re-open Kulani Correctional Facility on the Big Island.
It is clear that we need additional facilities. Most of our current decades-old structures are deteriorated, over-capacity, and poorly designed.
The Department of Public Safety has issued a request for information to procure a comprehensive plan to return prisoners, build facilities with sufficient capacity to keep those prisoners who present a danger to our community properly incarcerated, and provide programmatic options while keeping our communities safe.
And here may I add a personal note of gratitude from me and my wife, Dr. Nancie Caraway, to this legislature. You have passed and we are now implementing a Domestic Workers’ Bill of Rights – only the second such law in our nation. Headlines from around the world, as recent as yesterday, confirm a sordid picture of exploitation and degradation. You have also strengthened laws against domestic violence and human trafficking.
Thanks to all of you, the intense work of the Attorney General’s office, the Department of Labor and Industrial Relations, the Civil Rights Commission, the State Commission on the Status of Women, and the Office of Community Services – these crimes against our common humanity will not be tolerated in Hawaii.
Turtle Bay and Dole Lands
There are times for planning, and there are times for acting. Now is the time to preserve open spaces at Turtle Bay.
The dispute over the expansion of the resort into adjacent coastal and open lands has been going on for decades. Whether in the courts, in permitting proceedings, within the North Shore community, or the community at large – this issue has been divisive and disruptive.
I am requesting authority to use general obligation bonds to obtain a conservation easement of more than 600 acres at the site. This guarantees these lands will remain open and free of development, and open to Public Access in perpetuity.
Similarly, I am requesting general obligation funds to enable the state to work with a renewable energy company to purchase agricultural and conservation lands currently owned by the Dole Company – nearly 20,000 acres of open space between Wahiawa and Haleiwa on the North Shore of Oahu.
We need to make this investment to secure these lands so that they do not become a temptation for development and urbanization. Moreover, this purchase will ensure a combination of energy production and contemporary farming.
Mauna Kea is Hawaii’s gift to the world – the best place on the planet to observe the universe. It is without peer. It provides an unparalleled opportunity to advance our knowledge of our universe. Today, we celebrate 50 years of astronomy in Hawaii with 13 observatories from 11 countries and over a billion dollars in infrastructure atop Mauna Kea. One project will solidify Hawaii’s position as the world’s premier astronomy center – the $1.3 billion Thirty-Meter Telescope (TMT). The TMT will be the catalyst for the development of high tech and high paying jobs. TMT is partnering with the Institute for Astronomy’s Akamai Workforce Initiative to train local college students for technical fields. The initiative promotes STEM initiatives relating to local robotics and science programs. TMT is also investing $1 million every year in education so our keiki can reach for the stars. Our state must support and ensure that this tremendous opportunity comes to fruition.
This leads us to the reality of climate change, which is becoming more and more evident across Hawaii and the planet. Our islands are especially vulnerable to the impacts. We cannot wait to act.
In the fall, I was appointed by President Obama to serve on the State, Local and Tribal Leaders Task Force on Climate Preparedness and Resilience. At the first meeting in Washington in December, governors, mayors and tribal leaders from around our country discussed the effects of climate change in their jurisdictions. One thing was apparent despite our vast geographic, topographic and community differences – today’s climate changes are warning bells signaling the necessity for preparedness now.
At the forum, we emphasized that the Hawaiian Islands are a learning laboratory for scalable, innovative mitigation, adaptation policies and techniques, and providing a model on local and regional collaboration.
The State Office of Planning has been instrumental in coordinating efforts to update our Ocean Resources Management Plan. We have a state sustainability coordinator in the Department of Land and Natural Resources with authority to work across department lines for planning purposes.
The Senate-House Majority Package includes the Hawaii Climate Adaptation Initiative, which supports research, planning and coordination. The Interagency Climate Council plays a key role in this initiative. I will be convening Resilient Hawaii Forums this year to engage stakeholders – Native Hawaiian organizations, natural resource managers, the military, tourism officials, agricultural representatives, researchers and government at all levels. These forums will create a climate change roadmap for Hawaii.
Protection of our environment from invasive species must be a top priority. We are experiencing a biological crisis and deadly threat to our isolated ecosystem, our natural resources and our economy. A multitude of invaders – such as the little fire ant that can blind animals and destroy nesting birds and hatchlings, the coconut rhinoceros beetle, and parasites attacking coffee crops – graphically illustrate the seriousness of the issue.
The work of the Interagency Hawaii Invasive Species Council is tasked with combatting this menace. I endorse legislative initiatives proposing up to $5 million to meet operating costs of Invasive Species Programs.
This session, my administrative package will include a sustainability investment strategy to advance targets in clean energy development, local food production, natural resource management, waste reduction, smart growth, green jobs creation, and housing for the working middle class.
This includes funding to support watershed protection, farming infrastructure, invasive species management, e-waste recycling, transportation planning and creating jobs and meeting needs.
Early in my remarks, I commented on the necessity of providing pre-school education as a foundation for the future of our children. That observation needs to be bookended by consideration of ways to promote security and dignity on the other end of the spectrum of life – those of us experiencing our senior years.
Not only do we need to protect seniors from fraud and abuse, and assist with care issues, but I believe we can provide tax relief measures that will have practical and immediate benefits for seniors.
I will be asking the Legislature to look at the way we tax seniors in order to provide more equity and fairness for those on fixed and middle incomes to see that more of their money remains in their pocketbooks. We need to bring parity to way we look at and tax retirement income.
I accept and understand the message on pension income and taxation. If you have an employer-sponsored pension, it is exempt from income tax. That will not change. But everyone may not be aware that other pensions – not employer-based – are being taxed right now. Thousands of Hawaii seniors are paying income tax even on low- and middle-income retirement benefits.
I propose to exempt any presently taxed income from all sources for taxpayers age 65 and older with an adjusted gross income (AGI) of $25,000, AGI of $35,000 for heads of households, or AGI of $45,000 for joint filing.
This assures these seniors will not have their retirement income taxed. This will affect as many as 25,000 or more seniors throughout Hawaii.
I propose to double the current refundable food/excise tax credit for taxpayers 65 years or older whose AGI is less than $50,000. This is a direct payment to the senior taxpayer. This will affect as many as 110,000 Hawaii seniors or more.
I am requesting we increase the Kupuna Care budget by $4.2 million and make it permanent. This program enables seniors to remain in and receive care in their homes. This is an investment that will pay big dividends as our senior population ages, grows in numbers, and lives longer.
These proposals address the practical everyday reality of expenses for seniors, provide across-the-board fairness in application, can take effect immediately, and fit comfortably into our long-term financial stabilization plan
I began my remarks today in sad recognition of the sacrifice of his life by Sgt. Scobie. I have spoken of other sacrifices we have made or need to make in acknowledgment of our responsibilities to and for each other and to advance the common good of us all.
Referencing that sobering context, please allow me to conclude my thoughts today with some reflection on the passing of our beloved Loretta Fuddy. It is difficult even now more than a month since her death to accept its finality because of the vitality of her presence. I said at the time our hearts were broken but I also know she would remind us of the Biblical admonition that life is for the living – the duty to carry on, to offer the hope and encouragement to others that marked her life – every day of it.
I would like to thank the University of Hawaii Foundation for setting up the Loretta Deliana Fuddy Memorial Scholarship in Health, Human and Public Service. This will provide a lasting legacy to University of Hawaii students on any UH campus, who are committed to pursuing a career in health, public and human services.
Loretta was a lifelong supporter of public health measures. She was a lifelong advocate for families and children. She set the standard for helping those in dire need of services that promoted and nurtured their health and well-being.
I am requesting additional funding for the Department of Health’s Early Intervention Services. The program provides critical services to children with developmental delays from birth to three years of age. The program provides positive intervention in the crucial areas of cognitive and physical function, social and emotional well-being and adaptive skills. Loretta Fuddy was their champion.
There are, of course, several budget requests and bills that will be proposed for the Department of Health, all of which are important. Nonetheless, I am asking for specific attention to make funding for Early Intervention Services a priority. This will serve as a fitting tribute and appropriate legacy to honor Loretta. There will be lasting benefits for the affected families and children – the children she loved and cared for passionately to her last day.
None of us knows with any certainty how much time will be given to us. What we do know is that the time given us as public servants is a public trust. We justify that trust only by acting in the public interest.
The financial stability we’ve achieved, coupled with our long-term plan to sustain it, presents us with the opportunity to act both with confidence and dispatch. Public trust and the public interest can meet and be joined – now. Let’s do it – together.
HONOLULU– The Hawaii House of Representatives convened yesterday the 2014 Legislative Session. In conducting the official business of the day, the House voted to pass several measures including one designating committee assignments changes for members.
“I’d like to congratulate and welcome Representative Creagan to the House, as our newest member,” said Majority Leader Scott Saiki (D, Downtown-Kakaako-McCully). “In addition, my thanks to the following individuals for their service to the House. Every organization goes through frequent fine tuning to ensure that it optimizes its most valuable resource: human resources. These appointments and assignment changes reflect a part of that ongoing process.”
This morning, the House voted to approve HR2, which details changes to committee assignments as follows:
· Representative Mark J. Hashem was appointed Chair of the Housing Committee and a member of the Health Committee and Human Services Committee; will no longer be the Vice Chair of the Labor & Public Employment Committee and a member of the Public Safety Committee and Transportation Committee; but will remain as a member of the Finance Committee.
· Representative Gregg Takayama was appointed Vice Chair of the Transportation Committee and a member of the Labor & Public Employment Committee and Public Safety Committee; will no longer be a member of the Agriculture Committee, Economic Development & Business Committee, Veterans, Military, & International Affairs, & Culture and the Arts Committee, and Tourism Committee; but will remain as a member of the Finance Committee.
· Representative Kyle T. Yamashita was appointed Vice Chair of the Labor & Public Employment Committee, and will remain as a member of the Finance Committee, Public Safety Committee, and Transportation Committee.
· Representative Richard Creagan, who was appointed as a member of the House of Representatives from the Fifth District to fill the vacancy created by the resignation of former Representative Denny Coffman, will be a member of the Consumer Protection & Commerce Committee, Judiciary Committee, Health Committee, Housing Committee and Human Services Committee.
· Representative Ken Ito was appointed to the Economic Development & Business Committee, and will remain as the Vice Chair of the Veterans, Military, & International Affairs, & Culture and the Arts Committee and a member of the Consumer Protection & Commerce Committee and Judiciary Committee.
· Representative Jessica Wooley was appointed to the Economic Development & Business Committee and Veterans, Military, & International Affairs, & Culture and the Arts Committee, and will remain as the Chair of the Agriculture Committee and a member of the Judiciary Committee.
· Representative K. Mark Takai was appointed to the Tourism Committee, and will remain as the Chair of the Veterans, Military, & International Affairs, & Culture and the Arts Committee and a member of the Education Committee and Higher Education Committee.
· Representative Sharon Har was appointed to the Transportation Committee, Labor & Public Employment Committee, and Public Safety Committee, and will remain as the Vice Chair of the Judiciary Committee and a member of the Consumer Protection & Commerce Committee.
· Representative Scott Y. Nishimoto was appointed to the Energy & Environmental Protection Committee, Ocean, Marine Resources, & Hawaiian Affairs Committee, and Water & Land Committee, and will remain as the Chair of the Legislative Management Committee and a Vice Chair of the Finance Committee.
· Representative Mele Carroll will no longer be a member of the Consumer Protection & Commerce Committee and Judiciary Committee, but will remain as the Chair of the Human Services Committee and a member of the Health Committee and Housing Committee.
· Representative Mark M. Nakashima was appointed to the Consumer Protection & Commerce Committee and Judiciary Committee; will no longer be a member of the Education Committee and Higher Education Committee; but will remain as the Chair of the Labor & Public Employment Committee and a member of the Public Safety Committee and Transportation Committee.
· Representative Linda Ichiyama will no longer be the Vice Chair of the Transportation Committee but will remain as the Vice Chair of the Higher Education Committee and a member of the Education Committee, Labor & Public Employment Committee, Public Safety Committee, and Transportation Committee.
By Eric Boehm | Watchdog.org
MINNEAPOLIS – Coast to coast, states are leaving taxpayers on the hook for massive debt payments over the coming decades as state governments continue to abuse their metaphorical credit cards.
A new report released this week says state governments have more than $5.1 trillion in debt, largely because of pension obligations to former and current state employees, which states now lack the assets to pay off. Pension debt accounts for more than $3.9 billion of that total, but the report also includes outstanding bonded debt, unemployment compensation trust fund debt and debt in the form of “other post-employment benefits,” or OPEB, which is closely linked to pensions and includes retired public employees’ health-care costs.
Though the totals vary significantly from state-to-state, it adds up to an average of more than $16,000 of debt for each man, woman and child in the United States.
Given states’ propensity for putting things on their credit cards, it’s those children who probably have the most to worry about.
Bob Williams, president of State Budget Solutions, the fiscally conservative state policy think tank that authored the report, said the trillions of dollars of debt are the result of “broken promises, reckless leadership and fiscal irresponsibility.”
“Millions of Americans who interact with or rely on their state governments each and every day must understand their state’s true fiscal condition,” Williams said. “Unaddressed state debt will take its toll on state budgets as the money once expected to fund education, health care and more will have to be redirected to pay for these broken promises.”
California leads the pack with $778 billion in state debt, mostly as a result of the state’s $584 billion unfunded public pension liability. New York ($388 billion), Texas ($341 billion), Illinois ($321 billion), and Ohio ($321 billion) round out the top-five states with the largest amounts of state debt.
Residents of Alaska ($40,000 per resident) and Hawaii ($33,000) have the highest levels of state debt on a per capita basis, followed by Connecticut ($31,000), Ohio ($28,000) and Illinois ($25,000).
At the other end of the scale, residents of Indiana have the lowest per capita debt, but they would still be on the hook for more than $6,300 per person.
The point of the study is not to suggest that states should — even if they could — send each resident a bill for their part of the debt at the end of the month. But breaking down the burden to an individual level gives an indication of how much money state governments will have to drain out of the economy to pay off their borrowing.
In some ways, it might be better to send a bill to each resident and be done with it. Instead, states generally pay back bonded debt over a 20-year period after each round of borrowing, and interest costs mean taxpayers end up paying even larger amounts.
In Illinois, more than $1.45 billion on this year’s general budget will be used simply to pay interest on the state’s $130 billion in overall debt, largely driven by borrowing to cover pension obligations.
“Every dollar spent on interest is a dollar not spent on some other pressing need,” said Judy Baar Topinka, the state comptroller.
Illinois has been heaping more debt on beleaguered taxpayers. The state has borrowed $16 billion in the past four years, and taxpayers are facing debt service costs of more than $1 billion per year until the 2030s.
Across the board, pensions are the largest drivers of debt in almost every state.
State Budget Solutions maintains that many states are using inaccurate accounting in determining their pension debt – essentially, states assume they will earn larger returns in future investments and use those assumed future returns to hide part of the debt. In their report, the think tank used a lower rate of future returns in an effort to have a more accurate picture of what taxpayers owe in the coming decades.
“No other debt issue Oklahoma faces holds a candle to the unfunded pension liability. Other than the pension liabilities, the vast majority of the state’s debt is within acceptable, conservative ranges and managed very responsibly,” John Estus, spokesman for the state Office of Management and Enterprise Services, told Oklahoma Watchdog in response to the report.
As sobering as the State Budget Solutions’ report may be, it may not tell the whole story.
The report did not include off-budget borrowing authorities established in many states to take on debt for economic development purposes or to run highways and bridges.
The Pennsylvania Turnpike Commission holds more than $8 billion in debt, ultimately backed by the drivers and taxpayers in the state, but that does not show up on the State Budget Solutions report. Ditto for the $18 billion in debt held by the Port Authority of New York and New Jersey, which oversees the bridges, tunnels, ferries and mass transit operations linking northern New Jersey with New York City.
Dozens of similar authorities exist in every state across the map.
It also does not consider municipal-level debt that taxpayers will ultimately be responsible for paying off, a particularly bad problem in large cities buried by pension costs, such as Detroit, Cincinnati and Chicago.
In New Jersey, for example, the report says residents owe $214 billion in debt. Including local and county pension obligations would increase that figure to more than $277 billion, NJ Watchdog reported this week.
But there are signs state governments might be starting to take their debt problems seriously.
In California, the state with the highest amount of total debt, Gov. Jerry Brown this week proposed spending $11 billion next year to pay down a chunk of the state’s long-term obligations. He said the state must address its “wall of debt.”
The state’s official estimated debt is $450 billion, but State Budget Solutions estimates California to have more than $770 billion in debt to pay off.
Either way, $11 billion is a start. But California and other states have a long way to go.
Boehm is a reporter for Watchdog.org and can be reached at EBoehm@Watchdog.org. Follow @EricBoehm87 and @WatchdogOrg on Twitter for more.
BY MALIA ZIMMERMAN - HONOLULU — The Hawaii Republican Party has turned down a plea from the Hawaii Health Connector to use party leadership and legislators to recruit for the exchange.
In a Dec. 27 email to Kayla Berube, executive director of the Hawaii Republican Party, Ria Baldevia of the health connector asked whether GOP leadership and lawmakers could help uninsured Hawaii residents secure coverage.
But in a scathing response, Berube said the Hawaii Republican Party is willing to promote policies that ensure people have better access to care and allows them to keep their plans and doctors, but the Affordable Care Act fails to do that.
Berube also noted a number of concerns about the connector’s performance.
The federal government allocated $204 million for the Hawaii exchange, including $53 million for its website, but the site has had a number of technical issues that have prevented people from getting insurance.
“The Hawaii Health Connector has received over $200 million in federal funding, which would seem like plenty of money to avoid the failures we have witnessed in the first three months. Where did that money go?” Berube asked.
The technical glitches were no surprise, Berube said, since the Hawaii Health Connector hired CGI Group over the objection of Senate President Donna Mercado Kim, who warned the connector that CGI botched upgrade of the Hawaii tax-collection system.
“We believe Hawaii residents should be able to securely sign up through your website, but the National Review reported it is one of many state-run exchanges vulnerable to wi-fi attacks, allowing hackers to intercept personal information of those trying to obtain health insurance,” Berube said.
The news organization deemed Hawaii’s exchange the “nation’s worst.”
“It is quite embarrassing for Hawaii, a state which embraced the Affordable Care Act, to have ranked dead last in the nation in December as the worst state-based exchange,” Berube said.
Sanjeev Bhagowalia, the state’s IT director, told state representatives at a Dec. 12 hearing the website still has a number of glitches, and he is worried it’s not secure enough to keep “very sophisticated foes” — hackers — from obtaining confidential information from the site.
“This is a very serious area and we are not prepared,” Bhagowalia said.
Low enrollment, the cost for each successful sign up and rising rates are issues, too.
Hawaii Health Connector Interim Director Tom Matsuda, who took over Dec. 9, said a total of 2,034 people who have enrolled in a health plan and 296 businesses have applied for a health plan through the Hawaii Health Connector as of Dec. 25.
But Berube said that still breaks down to about $100,000 spent per person and small business that successfully signed up.
The law’s mandates are already driving up premiums, Berube said, including premiums with Kaiser and HMSA, Hawaii’s two primary insurance providers, which will increase as much as 9.2 percent on thousands of individual and small businesses.
In addition, the Hawaii Health Connector still isn’t effectively connected to the state’s Medicaid system, which means low-income applicants are stuck in limbo, Berube said.
Meanwhile, Hawaii’s Democrat lawmakers are criticizing the exchange.
Rep. Justin Woodson, D-Maui, pressed state Insurance Commissioner Gordon Ito at the Dec. 12 hearing when he admitted the exchange would not lower health insurance rates in Hawaii. Ito told lawmakers the insurance plans obtained through the exchange would probably increase 8 percent to 10 percent per year, in part because of the fees assessed on insurance companies to fund the exchange.
Gov. Neil Abercrombie and the Hawaii Health Connector’s board and administration assumed at least 100,000 people — all of the state’s uninsured — would sign up for health insurance over the next two years. Initial financial plans for the connector were based on 300,000 people — or 24 percent of the state’s population — buying health insurance. But that prediction falls far short.
State officials told lawmakers the Hawaii Health Connector isn’t financially sustainable and, because of that, should be converted from an independent nonprofit to a state agency.Bhagowalia told lawmakers they should consider allowing the state to take over the private nonprofit exchange because 3,000 to 4,000 people signing up through the exchange — out of a potential 1.4 million — is “not a good outlook for us,” and is a business model that won’t survive.
Pat McManahan, the state’s human services director, as well as representatives from Kaiser and HMSA health insurance, agreed.
Once the $204 million runs out the exchange will be expected to fund its $10 million to $14 million in annual operations through fees on local insurance companies. The fees, now at 2 percent, are generated through a percentage of sales made through the exchange.
BY SAM SLOM - Retail Sales Up, Down. Final numbers are not in, but it appears retail sales in brick 'n mortar stores declined or increased marginally while online sales are up. A less than genuine economic recovery, parking woes at Ala Moana Center and fears of credit info theft, as occurred at Target, all contribute to the final results. Speaking of Target's loss of personal data, do you really think the Obama Health Exchanges will protect your information? Really?
ID Cards Offer You Savings. Speaking of last minute Christmas gifts, the Hawaii ID Discount card is a great investment. You can save 10%, 15% or more at many restaurants, car rentals and other locations with the card. SBH is selling the $40,12-month card for $30 as a year-end fundraiser. Great stocking stuffers. Interested? Call Susan at SBH at 396-1724 to purchase several now.
Author Patrick Snow to Keynote 38th Annual SBH Business Conference. Best-selling author and motivational business success speaker, Patrick Snow, will be the SBH's Keynote Luncheon Speaker, Wednesday, February 19, 2014, 8 am - 2 pm, for the 38th Annual SBH Business & Investment Conference at the Ala Moana Hotel. A great line up of exciting and informative speakers and issue topics, networking, business exhibits and more. Sponsorship and booth exhibit opportunities still available. Contact Malia (306-3161) or Susan (396-1724) for details.
January 30 SUNRISE Features Medved. SBH SUNRISE returns Thursday, January 30, 2014 in the Ala Moana Macy's Pineapple Room with national Salem radio talk show host and author, Michael Medved. To reserve your seat, call 396-1724.
Can You Help SBH? SBH, a (501(c) (6), would appreciate your private or business donation. If you like what SBH does for business, consumers, and an improved Hawaii business and investment climate, we need your support. There is still time for a 2013 donation in any amount to SBH (6600 Kalanianaole Hwy, Ste 212, Honolulu, HI 96825). We also have a 501-c-3 foundation that could use your support so we can continue to do outreach and education in the community, media and at the legislature. Mahalo for your consideration.
Storfer, Hazelton-Giambrone on Board. SBH is pleased to announce that Mark Storfer of Hilo Hattie, and the Chairman of the Retail Merchants of Hawaii, and Naomi Hazelton-Giambrone of Pacific Edge Magazine joined the Board of Smart Business Hawaii. Welcome to our newest volunteer board members.
Hawaii Connector to Cost You More. According to Malia Zimmerman's report in Hawaii Reporter, state officials said the Hawaii Health Connector isn't financially sustainable and, because of that, should be a state agency.
More from the report: "The nonprofit state exchange received $204 million in federal money. Once that runs out, the exchange will be expected to fund its $10 million to $14 million in annual operations through fees on local insurance companies. The fees, now at 2 percent, are generated through a percentage of sales made through the exchange.
"But numbers as of Dec. 7 released by the Hawaii Health Connector show just 683 people in Hawaii bought plans through the exchange, or less than 1 percent of Hawaii's 1.4 million people. Another 6,615 accounts were established, 220 of which were small businesses, but they have not completed the paperwork to buy insurance, exchange officials said.
"Sanjeev Bhagowalia, the state's IT director, and Pat McManahan, the state's human services director, as well as representatives from Kaiser and HMSA health insurance, told state representatives at a Dec. 12 hearing they should consider allowing the state to take over the private nonprofit, which the Legislature set up to implement the Affordable Care Act here."
Fed to "Dial Back." Citing an improved economy, the Federal Reserve will "dial back" on its QE bond buying by $10 billion starting mid January.
Unemployment Rate to Decline. Good news for employers: the State Department of Labor & Industrial Relations released the tax rates for employers for 2014 and there is a slight UI tax reduction. No employee pays UI tax; only employers. The 2014 taxable age base per employee is $40,400 and the new employer tax rate is 3.4% (from 4.5% in 2013) PLUS 0.01% Employment & Training Tax Rate. Maximum rate is 6% (down from 6.4%) and the maximum weekly benefit increases to $544.
UH Hearing. Last Friday, the State House and Senate Higher Education Committees once again examined problems at the state's only public institution of higher learning, the University of Hawaii. Financial problems, management of the UH Cancer Center in Kaka'ako, the failing athletics (football) program and the expanding backlog ($487 million) of repair and maintenance were among the areas of interest of lawmakers who repeated their strong support of UH. The university complained about its annual $35 million electric bill (and said it is developing alternative energy projects), lack of staff and problems that could sink the UH Hilo College of Pharmacy. Not all issues associated with the 2012 "Stevie Wonder Blunder" concert have been resolved. UH is still seeking a permanent President to replace MRC Greenwood.
City Auditor Strips HART's Propaganda Machine Bare. The long awaited report by the City Auditor on the operations of the Honolulu Area Rapid Transit cabal, HART, is interesting reading. It details nearly $14 million in PR propaganda, and political blogs meant to discredit critics of the $9.03 billion steel-on-steel heavy rail, and political destruction of candidates (such as Ben Cayetano) who ran on fiscal integrity. Read it and remember, you're paying for all of this. And more.
Duck Dynasty Distress. It seems 2013 will be the year when free speech died in America. The politically correct crowd scored major victories this year in quashing speech THEY don't like. I never watched "Duck Dynasty" on A&E but the attack on its reality star, Phil Robertson, is over the top. He was interviewed in GQ Magazine and gave responses about his beliefs, traditional marriage and homosexuality. A&E was quick to suspend him and the show, and to re-pledge their total support for the LBGTXYZ sexual community (which of course is their right). When Chick-fil-A was attacked and boycotted for some of the same reasons, the so-called activist civil libertarians remained silent as they have in this case. It used to be that Social Security was the third rail in politics and open discussion; now it is abortion, vouchers and sexual orientation. Those that celebrate the silencing of this dissent should remember history when a silencing of one belief leads to many other bans and retaliation.
Long Red Lights in Wahiawa, Hawaii Kai. The City stopped its traffic light computer system while major road resurfacing continues in Wahiawa and Hawaii Kai. The result? Longer red lights and more traffic disruption. The resurfacing will continue through March 2014.
Gregoire Featured. Winners' Camp Founder, SBH Foundation Director and civic leader, Delorese Gregoire, is featured in the January issue of Hana Hou, the magazine of Hawaiian Airlines. The dynamic Gregoire deserves the accolades. You may be surprised to learn of her challenging background.
"In 1985, Gregoire launched Winners' Camp, a week-long motivational retreat for teens. Campers tackle ropes courses and attend workshops in etiquette and public speaking-skills Gregoire worked hard to develop as an adult. The nonprofit program has received national recognition and produced 14,000 graduates. Thirteen years ago, Winners' Camp found a permanent home on Kamehame Ridge. The abandoned Army barracks overlooking Hawaii Kai were a disaster. Graffiti covered every surface that wasn't smashed or rusted through. The challenge of renovating the dilapidated kitchen and dorms didn't dissuade Gregoire in the slightest. Today they're clean, cozy and wallpapered with inspirational quotes of her own invention."
HAL Appoints Parker. Hawaiian Airlines appointed Lisa Parker as director of the Shared Services, Training and Development division. In this role, she is responsible for designing, building and delivering high-impact and sustainable programs that enable Hawaiian Airlines to attract, engage and retain top talent.
Honor Saiki. On Thursday, January 30, 2014, there will be an event to honor former Hawaii Congresswoman Patricia Saikiat the Waialae Country Club. Starting at 6 p.m. with a VIP Reception, and 7 p.m. dinner and program, this special evening is an opportunity to salute Congresswoman Saiki for her 25 years of public service and to thank her for the many significant achievements that have made her one of our country's National Treasures. Contact Miriam Hellreich at the Republican Party of Hawaii for reservations at 284-3235 and see details by clicking here>
Reagan Dinner, February 6. The Hawaii Republican Assembly has announced the first annual Ronald Reagan Freedom & Liberty Dinner on February 6, 2014. The special guest speaker will be heavyweight American Conservative Union chairman, Alberto Cardenas, who headlines the annual CPAC in Washington, D.C. Tickets $75. ContactHawaiiRepublicanAssembly.comYou're Invited -January 14! SBH member Talent HR Solutions is inviting you to lunch at Dave & Busters in Honolulu, Tuesday, January 14th, at 11:30 A.M. There's going to be over 30 business owners to socialize and network with. Talent HR Solutions will give a presentation on the many advantages of utilizing a Human Resource Administration firm and will have their health care specialist give a short presentation on the Affordable Care Act and how it impacts your business. Bring business cards and brochures because they'll have a separate section for you to promote your business. There's no charge. Call The Reservation Line Now 489-0036 or visit talenthrsolutions.com
Want More Business? JOIN SBH! Is YOUR business a member of SBH? No? Lots of benefits. Strong networking organization. Call 396-1724 or go online to smartbusinesshawaii.com.
Hawaii Reporter.com, Hawaii's first electronic daily newspaper launched in 2002, has all the breaking news and unlike other publications in town, is still free. Award winning Hawaii Reporter and Malia Zimmerman report daily (M-F) on the Rick Hamada Show heard on KHVH radio on 830 AM at 7:05 am. Malia will share the news behind the news.
Tune in to Panos Prevedouros.SBH Director and UH Engineering Professor Dr. Panos Prevedouros is a weekly guest on Rick Hamada's morning radio show every Tuesday from 7:05 a.m. to 8 am. Tune in!
Read SB NEWS.Don't forget to read your current (November) monthly SB NEWS by PDF attachment or link. More expanded news and views for the Hawaii business community. A limited number of printed copies are available for mailing if you call SBH (396-1724).
Advertise Here.Some readers have inquired about placing an ad on the right margin of these weekly blasts, which reach more than 15,000 people. Interested? If you want your business ad posted, the cost is $50 for one placement or $150 per month (4-5 placements). Contact 396-1724.
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