Three weeks have elapsed since a devastating fire decimated much of the historical town of Lahaina, leaving countless lives upended. And Joe Kent, executive vice president of the Grassroot Institute of Hawaii, says more people are starting to understand its many ramifications.
During a conversation with radio host Rick Hamada on NewsRadio 830 KHVH on Thursday, Aug. 24, Kent first talked about the status of healthcare in Hawaii, but then shared a dire update on the situation.
Kent, who was on the ground in Maui last week, said he met with many individuals who fortunately escaped the flames, but whose livelihoods have been effectively eliminated — particularly those in Maui’s tourism sector.
“[T]here was a wedding planner that we saw who said they lost all their bookings,” he said. “And that’s connected to, you know, musicians and photographers and hotels and food vendors.”
Kent said the fire “deleted thousands of properties,” spelling trouble for the county which relied on those properties for tax revenue. He cautioned that the diminished tax base could place Maui County’s bond rating — and even that of the state — in jeopardy.
“[W]e are going to be looking at cuts right at a time when the county is going to want to spend more on emergency response than ever,” he said.
Asked about the various state and county-level emergency funds, Kent said these funds might help fill in the budget shortfalls for a time, but won’t be solutions for the long term. Instead, government officials likely will “put out the knives and forks and look at taxpayers.”
Kent said the investigation into Lahaina’s water system is ongoing and that more forensic analysis will be needed to determine what exactly happened. In any case, he said, “The state should make it easier to use water if there’s an emergency.”
In the meantime, Kent urged lawmakers to provide survivors with a clear timeline of recovery efforts when when they can expect to reenter Lahaina.
“[I]t’s hard to plan your life, especially after a tragedy, with no time frame at all,” he said. “So, I think that’s the best thing they could do on a human level.”
To hear the entire interview, click on the image below. A complete transcript follows.
8-24-23 Joe Kent with host Rick Hamada on NewsRadio 830 KHVH.
Rick Hamada: All right. As mentioned before, it is time to get together with Joe Kent of Grassroot Institute of Hawaii. And it is another broadcast day, another broadcast week.
And brother Joe, wanna welcome you back and thank you so much for being a part of the program.
Joe Kent: Good morning, Rick. Thanks for having me.
Hamada: Good morning to you. Remind us about Grassroot Institute.
Kent: Well, we’re a watchdog that watches the government, see what they do, and try to hold the government accountable while also advocating for solutions like lowering taxes and regulations, generally.
Hamada: Now, Maui, of course — top of mind. However, there are other issues that are percolating here in our state.
Kent: Oh yes.
Hamada: If you wouldn’t mind, a couple of headlines in that regard, and then we can transition over to Valley Isle.
Kent: Sure, yeah. Well, I mean, I saw that the [Kauai Community Health Alliance] recently closed. This clinic was on its last leg for a while. And due to, of course, the government’s rules regarding how difficult it is to run a health clinic in Hawaii or any health service.
We’ve got the highest taxes on doctors and health services in the nation. And so, that makes it very difficult to run these small clinics, especially in the rural areas.
And this is something that that clinic on Kauai has been warning for a long time about. But now, they can’t warn anymore; they’re closed. And that means that Kauai residents will have fewer options to seek health care and so on.
And we want the government to really pay attention to this because there’s a lot that they could do. I mean, we’re the only state that taxes health care and one of only two states that taxes Medicare, Medicaid and so on.
And so, there’s a lot we could do, if we would just sort of make it easier for doctors to exist here. We always talk about the doctor shortage, but let’s do something about it.
Hamada: There are claims that there was some forward progress in doing that this past session.
Kent: Yes, that’s right. And the governor did up the amount of Medicare matching that the state does. So, that’s a small modicum of help. But, you know, we need … This is death by a thousand cuts; we can’t just remove one of the cuts.
Hamada: One of the things was an initiative to provide affordable housing to those in healthcare, but that failed at the big square building.
Kent: Yeah, that’s right. And there was even an effort to allow for relaxed regulations for nonprofits who want to build affordable housing. That would be a no-brainer as well. And it would help the healthcare industry as well, but that failed too.
I mean, these people are just so afraid to touch the machine right now. But that’s really what we need to fix the system, is people who will get in there and identify the problem and find a solution.
So, you know, it seems like a no-brainer to allow nonprofits who want to build affordable housing to just go ahead and do it; you don’t have to go through all these hoops. So, hopefully, we’ll see that in the next session.
Hamada: Well, I’ll tell you what: We’re at the bottom of the mountain. Because in order to achieve any substantive, to where … And by that I mean, many times, those in the big square building, it’s a very incestuous environment. You talk to the same people; you go to the same social events; you have the same donors — all of that.
I think there’s a distant removal for what the reality is. Because I’m tired of hearing that an appropriation or a policy statement, it means: job done. And it’s not, it’s not.
Kent: Yeah, that’s right. When the government fixes so-called “a problem” by giving more money to it, that helps one year. But if you want to fix the problem in the long term, that requires regulatory restructuring because it’s the regulations that get in the way.
And so, it’s almost like, you know: “Give a man a fish — you know, teach a man to fish.” It’s similar to that concept. So yes, spending does one thing, but regulation is a whole ’nother ball game and that’s what the lawmakers need to engage with.
Hamada: I’m just going to say one quick thing: We are on the brink of a total upheaval of the value of the U.S. dollar in international commerce. And when the time comes — and it’s right about 10 minutes away — we are going to see fiscal deterioration on a biblical level.
We are not dissimilar here in the state of Hawaii. We are being run like a for-profit commercial enterprise. The state wants to profit off of us and retain massive amounts of fundamental balances that belong to us.
And this in Kauai — what’s happening there — totally, absolutely inexcusable. When at some point we had billions of dollars at our disposal, and we pissed it away. I’m sorry Ed.
Kent: [chuckes] Well, it’s like the state is similar in structure to a parasite and we’re the host. But if the parasite sucks too much from the host, the host dies. And so, yeah. They’re shooting themselves in the foot.
Hamada: Sorry, I’m getting a little fired up today.
If we could — and we’ll track this with Grassroot Institute of Hawaii: Maui.
Kent: I was just there again this week, checking on my friends. But more and more people are starting to uncover the ramifications of what the Lahaina fires mean and how they’ll affect Maui County and how they’ll affect the state.
This is millions of dollars — hundreds of millions of dollars — in cuts to the county budget. It’s a small county. They just reached a billion dollars in revenues, and now, you know, it might snip a hundred million —two hundred million. They’re still estimating and we’re trying to get those numbers, but that’s a big mismatch in terms of the payroll costs that they spend out annually and the revenues that they expect to come in.
We just had this tragedy strike which deleted thousands of properties, and that means that those property taxes will forever be gone from the county budget. So, what is the county going to do? I mean, we are going to be looking at cuts right at a time when the county is going to want to spend more on emergency response than ever.
I mean, the capital improvement spending needed to rebuild the infrastructure are in the billions. And then the bond rating for Maui County I would predict is in jeopardy because their ability to tax is far diminished.
Hamada: Yeah.
Kent: And at the same time, they’re probably facing lawsuits, too. You know, so many entities are facing lawsuits, but the county absolutely is, I think, on guard for that.
And so, that could be even more money that the county’s set to spend out to pay for that. But who’s ultimately going to pay for that? It’s going to go back to the taxpayers. You know, it’s not that the county officials take it from their pocket; they take it from your pocket.
And so, what does this really mean in the long run? I don’t think anyone has done the math yet; we’re still trying to do the math.
But, you know, I don’t think that counties in the state of Hawaii have the ability to go bankrupt. But it almost doesn’t matter at some point because if they have to raise taxes so much on a citizenry that’s not ready for that, then the county might as well go bankrupt.
Hamada: Well, speaking of bankruptcies, I mean, the lawsuits you mentioned before — and I discussed this at length yesterday — with a topicality of inverse condemnation and what transpired in 2020 with PG&E [Pacific Gas and Electric Co.], that HECO [Hawaiian Electric Co.] is facing a daunting challenge — we have two vacancies on our state Supreme Court now; those appointees will have great influence on decisions in these suits.
So, we’re facing — and let me cut to the chase with time remaining — is that when there’s going to be a diminishment of revenue, because there’s a contribution, if I’m not mistaken, could be updated. But there is over $5 billion annual generation that was contributory to our general fund.
With the loss of that and the business at hand, you gotta make it up somehow. There’s been an exhaustion of federal infusion of monies. We’re going to have to do it ourselves, and that usually means …
Kent: Taxes.
Hamada: Exactly.
Kent: Yeah. And let’s not forget that tourism is falling. I was looking at the tourism numbers yesterday and they went down from like 8,000 tourists a day — or passengers per day on Maui — to now around 2,000.
So, that’s a huge drop off a cliff for the tourism. But you know, let’s not forget that the state gets money from Maui. And so, the state is going to lose money too.
Now, the state is saying that, you know, “Let’s try to give money to Maui to help in the recovery of efforts.” But with what money? With whose money?
And so, this isn’t like COVID where the feds rained money on Hawaii. You know, billions and millions of dollars to all across the nation. I don’t know if they’re going to rain anything directly into the county coffers or the state coffers or anything. If anything, that money is going to go to individuals who are directly affected.
And so, the county and state are in a really weak position. And like you said, they put out the knives and forks and look at taxpayers when that happens.
Hamada: Yeah. Gov. [Josh] Green triumphed, trumpeted rather, a rainy day fund for the state in his latest budget. And can you remind us of what that dollar amount is and is it accessible? Is it a fluid amount? Is it a special fund? What’s the categorization and can it be tapped in to help Maui?
Kent: It can be tapped in. It’s about, I believe, $500 million for this year and $500 million next year, which would be, you know, make up a total of a billion. But now that the revenues have faltered, those numbers are going to be very different.
So, I mean, I’m going to be watching the next Council on Revenues meeting where all of that will come to light. And, you know, even the state, I wonder if their bond rating is going to take a hit for this. That would make it even more difficult to respond to this type of disaster because, you know, they wouldn’t be as able to get loans for this.
So yes, there are some emergency funds. The county has emergency funds too — around $80 million. But if you’re trying to plug a $100 million annual budget loss, you know, that’s just not going to do it. So again, it’s going to come down to, these one-time emergency funds may help, but I’m looking at the long term and the state is reeling for the long term.
Hamada: What is our unemployment insurance balance and the dispersion? It’s going to be coming very soon.
Kent: That’s right. I believe it was around $300 million, last I checked — which it’s supposed to be around a billion, so it’s far-diminished. And that looked OK when the state was regenerating its economy after COVID. But now with this, there’s already thousands of unemployment claims that the fund will have to pay out to.
And that means that the unemployment tax may ratchet up again automatically. Remember, when the fund goes down, the tax goes up automatically. And so, we’ve already seen the tax go up by 50% to 80% — on some businesses, 100%. It depends. But that might double.
Hamada: Yeah, that’s the “crystal ball” that I would like to paint over so we can’t see.
Kent: Yeah, I know.
Hamada: I don’t want to see all that happening.
What do I have to do? Do I have to do this? Sorry, just let me get this in. It’s gonna take just a couple of moments. Want to thank brother Joe Kent, Grassroot Institute of Hawaii, onboard with us. Conversation continues in a moment.
All right. Time remaining, adjusted our schedule to accommodate more time with Joe Kent in our studios.
Joe, there’s a lot of controversy that still exists in regards to decision making. I was very cautionary in previous programs: Listen, let’s take a look; let’s get the facts; let’s get more information. But we have.
The decisions in regard to water. Could you walk us through what the decision-maker — who the decision-maker is? What was decided? And now that we’re almost two weeks out, we’ve had a chance to examine: What is this whole scenario about?
Kent: Well, in Lahaina, the fire started in the morning around 6 a.m., and it was put out with private water around 9 a.m. But then it flared up again around 3 p.m. and took over the town, as we know.
But during that time, there was a request from a local water company to the [State Commission on Water Resource Management], that basically asked the state to lift the rules to allow them to take more water from the streams to use for fire mitigation. But the state delayed their approval of that request until 6 p.m., which is, you know, after the town had been taken over by fire.
So, now there’s a lot of nuances in this story. You know, was the water really going to help the situation? And, it looks like: No, that water was probably going to … it would have helped some people, but the water was so far away from the center of town that it wouldn’t have prevented the whole town from being burned down or anything like that.
Although, it could have if we look at the county water department. Remember, the hydrants were losing water; they were dry. Firefighters were holding hoses with no water coming out of them and those are plugged into the county hydrants. Those county hydrants went dry because of the fire was so hot that it was bursting pipes in the town, which was sort of draining the water supply.
But we have to actually do a forensic analysis to see what actually happened there, because the county is also subject to the state rules which limit the use of water from the rivers and streams. And so, could the state have somehow quickly lifted the water limit for both the county and the private water companies, which may have allowed more water to get to them?
I mean, it’s kind of like if you have a broken water system. Yes, water is spurting out everywhere, but you can still get water through the system if you have enough water. And so, it’s complicated.
Hamada: I’ll tell you what. It is, I’m getting a little …
Lahaina, you have water from the county, state regulations — oh wait a minute, you have an ocean …
Kent: Well that’s a great point, yeah.
Hamada: … right there!
Kent: Yeah, I know.
Hamada: I just — I’m flummoxed.
Kent: That’s right. And, of course, it was too windy to fly that water over and dump it. But was there some way to spray that water? And you know all these types of — we’re getting a lot of these questions.
And then look at the Upcountry water too.
Hamada: Yeah.
Kent: That’s another one where the streams from East Maui are being diverted to Central Maui to fight those upcountry fires. But the state today said that they didn’t have enough water to fight those fires, and that’s another water fight.
So, this is the “water wars” on Maui playing out in an emergency situation. The state should make it easier to use water if there’s an emergency.
Hamada: Oh my goodness. It is 8:57.
Recent Maui County Council hearing took place. General public was invited to share their thoughts. What were some of those thoughts?
Kent: Yeah, I attended that hearing, and of course, a lot of anger, trauma, tragedy, you know, tears. I think people are still putting their thoughts together about how to think about this whole thing. And a lot of stories of people who escaped the flames — and we’ve heard those.
But there’s remarkably a lot of stories from people who were not in the fire, but have businesses on Maui who are being affected now, with the loss of tourism and so on.
I mean, there was a wedding planner that we saw who said they lost all their bookings. And that’s connected to, you know, musicians and photographers and hotels and food vendors.
Think of the hundreds of thousands of jobs that are affected by this. So, we’re just starting to get a sense of what this means.
Hamada: We’re dialed in and a few moments remaining.
Joe, I want to turn it over to you for something we may not have mentioned as of yet. About a minute and a half.
Kent: I think lawmakers are grasping for what they can do to help. But I think in Lahaina, at least, the message that I’m getting is people want a timeline.
I mean, there are people whose homes have been burned down. But there’s also people whose homes are still standing, but next to it. And all of these people are left out; they can’t get into Lahaina. Some people are worried about, you know, “Is my home going to be looted? And what is the timeline for getting back?” There’s just nothing.
And so, it’s hard to plan your life, especially after a tragedy, with no time frame at all. So, I think that’s the best thing they could do on a human level.
Hamada: Understand.
Grassroot Institute, we have just about 10 seconds. Website, where do we go?
Kent: Grassrootinstitute.org
Hamada: And we’ll do that. With Joe Kent joining us each week at this time. Thank you so much for being here.
Kent: Thanks so much, Rick.
