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Grassroot has ‘high hopes’ for 2024 Hawaii legislative session

Hawaii’s 2024 legislative session is almost upon us, and the Grassroot Institute of Hawaii has “high hopes” that a lot of good will come out of it.

Speaking with radio host Rick Hamada last week on KHVH News Radio 830, Grassroot Policy Director Malia Hills outlined a few of the things the Grassroot Institute intends to be working on in the months ahead.

Now obviously,” she said, “one of our big things is we’re always out there trying to prevent taxes from going up, trying to … keep the state from getting even more costly to live in. So that’s always part of what we do. But there are some things that we’re trying to move forward.

“With housing,” she said, “we have a bunch of bills that we’re looking at that would help spur more housing growth, especially affordable housing … really just housing that people can afford, just across the board. …

“We also want to see more healthcare compacts. You know, we passed the physicians healthcare compact last year. And we’re looking at how can we expand that and expand it to nurses and psychologists and other … medical professions.

“And,of course, we like to get involved in consumer protection issues. We’re hoping to see a bill that addresses [medical] certificate of need, a bill that addresses the degree requirements or unnecessary degree requirements in government hiring [and] a cottage food bill to help small businesses be able to sell their goods. 

“And it’s worth noting that the cryptocurrency sandbox is going to end this year. So, you know, we will be advocating for a very crypto-friendly, innovation-friendly solution that still protects consumers.”

To hear the entire 16-minute conversation — which also covered the state budget, the debate over short-term rentals on Maui and other topics — click on the image below.

12-14-23 Malia Hill with Rick Hamada on KHVH News Radio 830

Rick Hamada: It’s 8:39 in the morning coming up to 8:40. Joe Kent has the morning off, but we’re delighted to reconnect with Malia Hill of Grassroot Institute of Hawaii. And Malia, I wish you the very happiest of holidays. Merry Christmas and thank you for joining us.  

Malia Hill: Merry Christmas. I’m so happy to be here. 

Hamada: Could you do us a favor? Would you mind just a brief background on yourself? To reconnect with our friends who may have not visited with us before. 

Hill: Yes, I’m Malia Hill. I’m the policy director at the Grassroot Institute of Hawaii. I work with Joe Kent, so if you know Joe, you kind of know what we do. We are really a voice for individual freedom and economic prosperity in Hawaii. And my job is just, you know, looking at these policy issues, trying to help come up with solutions, trying to make this less expensive for your state to live in.

Hamada: Sure. I understand. And it’s a lot of diligence being applied because our home, there is something going on every two seconds where their taxpayers and citizens need to be aware of. And it really is something else. 

There are some topics that we could cover and I’d like to start off if you wouldn’t mind, because during and post COVID, our state budget seemed to be about as flush as it could possibly be. And now, “turmoil” is a good word to describe our state budget scenario. Malia, what should we know about this?  

Hill: Well, yeah, this is a really, really alarming thing because even just at the beginning of the year, we were talking surplus, and then we were talking about, “Oh, there’s a light, smaller surplus than we thought.” But we said, “It’s still good.” And then at the end of the legislative session, we were saying, “The Legislature spent the surplus.” And we even, you know, when Gov. [Josh] Green sort of cut some of that, you know, we were really praising him. 

Now, all of a sudden, that surplus has disappeared, as far as anyone can tell. The Council of Revenues is looking at lower tax revenues. Basically, you know, you can tell if the economy’s not doing, you know, fantastic. If the economy is flat, revenue, tax revenues are going to be flat. So revenues are just sort of flat and steady, but that spending just goes up and up and up. 

So what we’re basically looking at is what little surplus there is, is supposed to carry us through the next couple of years, before they just sort of magically all of a sudden, everything is going to get better in, you know, starting around 2026 or so.

But, you know, revenues will go up and the budget will go down, according to the general fund financial plan that the government put out. If you believe that, I have, uh, land to sell you. 

Hamada: [Laughs]

Hill: But, you know, we are in danger of basically operating at a deficit. If it weren’t for the surplus, we would be. That, it’s just kind of gone away — the expenditures have gone way up, you know. And the revenues, the tax revenues, are flat along with the economy.

And on top of that, the state is you know, selling $750 million in bonds. So basically, they are borrowing, taking on more debt with the highest interest rates in two decades.

Hamada: Yeah. 

Hill: And that’s money that has to be paid back eventually, 

Hamada: You know there’s going to be those in powers of authority that will say, “You know, the reason why is the tragic consequence of the Maui wildfires, and the necessity to recover, invest and insure.” And, Malia, help us understand, first of all, if that is invoked, what role the Maui wildfires play in our state budget. 

But it is, you just mentioned, that bond float. Oh my goodness, the repayment of it, ridiculous.  But, are there particular expenditures that the state has either made or committed to that has erased this budget for us? 

Hill: Yeah, that’s a little bit gray because there’s also relief money in it. So, you know, we know that there’s been, you know, the SBA has seen about $260 million approved in disaster assistance loans. We know that the governor has been talking about a lawsuit fund. Um, and we don’t really see where how that’s going to work into the budget.

We know that they’ve put out about $250 million in the budget for relief and recovery.  So, some of this is, you know, some of this money is necessary, and that is, you know, one of the reasons for the expenditures. But that’s not — and to some degree, that’s one of the reasons for low tax revenues, because anything that, you know, economically affects the state economic, you know, affects the tax revenues. 

But it’s not the only reason. You can’t just point to Lahaina and say, “Oh, well, that’s why.” You know, these are problems that existed before. I mean, these are problems that go back years and years and years.  

Hamada: It’s interesting because we hear about the stadium project, entertainment development project; the appropriations, Department of Hawaiian Homelands; tere’s still an ongoing scenario with — I know it’s not directly —  but revenues in regard to rail that have state implications. 

So, we’ve had big, major expenditures. It’s the small ones we don’t get reports on from either government or the recipients. I’m really curious. $50 million here, $120 million here, $12 million there. The disbursements of funds out of this state have got to be just remarkable that don’t show up on a major budget report out of a particular department.  

Hill: Yeah. That’s one of the things, you know, you really nailed it. I mean, it’s one thing just to look at the, you know, the big budget numbers, but there’s all this, you know, all these little details like special funds.

And even the auditor has been after the state to fix these, you know, little special fund here, a little special fund there because of how it can just turn into a fiscal nightmare after a while. But it’s still, it’s just an ongoing practice, you know. $20 million here, $12 million here, and that does add up over time.

And that’s not even getting into the debt service and the issues with the unfunded liabilities, healthcare and pension. 

Hamada: Yeah. We’re talking with Malia Hill. Delighted that we have time together today. Joe has the morning off; we’ll rejoin at a future time. 

We mentioned [the] governor and Maui; Gov. [Josh] Green and Mayor [Richard] Bissen. I’m really struggling with this: to force short-term rentals on Maui to rent long-term. Does the Constitution play a role in this? I mean, it just seems, seems a little tough.  

Hill: Yeah, it feels a little scapegoating. You know, they are trying to persuade short term rental owners to open up and rent long term to victims of the Lahaina fires. And I think we can all see, you know, OK, that’s great. 

And they’re offering, you know, up to 400% of fair market value. You know, $11,000 a month for a four-bedroom home if you’ll rent for, you know, 18 months. And given that it’s currently costing us $13,000 a month to put people in hotels, that’s — I mean, that’s a good deal, technically speaking. 

But you know, giving incentives, that’s great. But you’ve got to realize there’s reasons that people might not be able to rent short-term. And so to follow that with this: And if you don’t, we will either ban short-term rentals or we’ll … One of the things that was talked about was we’ll just pass a huge tax hike on any tax hike on any short-term rentals that don’t participate. 

I mean, they’re talking 400% property tax hikes, things like that, ehich is, I mean, effectively like a moratorium. 

And you’re right, there are some constitutional issues here, even the governor knows that. He kind of did that whole thing where he says, “We don’t really want to do that because there might be a lawsuit.

Um, what are short-term rental owners supposed to take from that?

Hamada: Unreal. I just, uh — and by the way, sidebar note: Iis there any way a connection to emergency order authority that can be invoked in these regards? So he may say, “Well, we’d really like for you to, but under the emergency powers that I have, you’re going to do it, whether you like it or not.”

Hill: You know, it’s, well, the emergency powers of the governor in Hawaii are, at least under the law, extremely expansive. So, they can, he can try to do any number of things, and we’ve certainly seen governors in Hawaii try to do a lot. 

But it is important to remember that emergency powers do not supersede your constitutional rights. You know, the courts can kind of look at the, you know, they can give a little benefit of the doubt, especially, you know, in a really short-term sort of way. 

But, you know, your basic fundamental rights, they still exist in an emergency. And the governor isn’t supposed to be able to just wipe them away with the stroke of a pen.

But that still means that you have to do to assert them. And that’s where it starts to fall apart because you know, you’re in the court system. It’s not a very speedy way to deal with it.

It would be nicer if we would just kind of restrain the emergency powers a little bit, so it wasn’t so tempting to use them in these extremely broad ways.

Hamada: It is already 8:50 in the morning. Talking with Malia Hill of the Grassroot Institute of Hawaii, serving as policy director, and so glad she’s with us. 

I’m going to stay with a bit of property and real estate. And now assessments are before us yet again. I know that we had a cataclysmic 2022 in the assessments that property owners received. Do we have an indication of what’s ahead of us, Malia?  

Hill: Well, the good news is, it looks like assessments, at least in Honolulu this year, are going to be nothing like they were last year. Last year we were looking at double-digit increases which, you know, of course, just equates to much higher, higher property taxes.

People always say, you know, “You have low property taxes in Hawaii.” No, that’s not true. You have low property tax rates and extremely high property tax values, so you just sort of have average property taxes in Hawaii. The good news is that the overall property taxes are only supposed to go up about less than 1%, .79%.

Now that depends on where you’re where you live. So in some places, you know, the North Shore, for example, they’re actually going to go down. But in some places, like urban Honolulu, they will go up about 5%. So it’s not 100% good news, but for most people, it’s a very small increase or even possibly a decrease. 

Hamada: So what does that mean for the fiscal health of the City and County, because the lion’s share of revenue is derived from property taxes? If there were any budgets and or projects under last year’s revenue stream, and that becomes mitigated and shrinks, is there any concern at the county level that we might have some issues?

Hill: Well, I don’t… I guess whether this is good news or not depends on how you feel about how much the county has to work with in terms of its budget. But this should not create a budget crisis. It is still an increase, which means that they will still have, you know, as much or slightly more money to work with than last year — even with, you know, the tax relief that they’ve put into place.

And there might even be, one hopes, a little room to kind of stay with those tax reforms that they’ve put in place to deal with these rising assessments. 

So, this shouldn’t cause a crisis, but that doesn’t mean that, you know, they still can’t generate, you know, use some restraint, start looking at the budget with, you know, some fiscal responsibility in mind.

Hamada: Gotcha. And in the waning moments we have together with Malia. 2024: It’s upon us, it’s about 10 minutes away. What does Grassroot hope to accomplish in this upcoming legislative session? 

Hill: Well, we have really high hopes this year. There’s a lot we want to do.

Now, obviously one of our big things is we’re always out there trying to prevent taxes from going up, trying to get the, keep the state from getting even more costly to live in. So that’s always part of what we do. But there are some things that we’re trying to move forward. 

With housing, we have a bunch of bills that we’re looking at that would help spur more housing growth, especially affordable housing. But when I say that I don’t mean just things that are considered affordable housing by, you know, state laws that do that kind of thing. But really just housing that people can afford, just across the board.

So we have suggestions about being able to create starter homes with smaller lots that would be more affordable for people. We are looking at a “Yes in God’s backyard” bill, which would help people, allow nonprofits like churches and schools and such to build on their land by right.

We also want to see more healthcare compacts. You know, we passed the physicians healthcare compact last year. And, you know, we’re looking at how can we expand that and expand it to nurses and psychologists and other professions, other medical professions.

And of course, we like to get involved in consumer protection issues. We’re hoping to see a bill that addresses certificate of need, a bill that addresses the degree requirements or unnecessary degree requirements in government hiring. We’re looking at a cottage food bill to help small businesses be able to sell their goods. 

And it’s worth noting that the cryptocurrency sandbox is going to end this year. So, you know, we will be advocating for a very crypto-friendly, innovation-friendly solution that still protects consumers. 

Hamada: There’s a lot on the agenda for the new year, and Malia, can’t thank you enough for joining us. And we wish you all the very, very best during the holiday season. And once again, Merry Christmas and Happy New Year. 

Hill: Well, thank you very much. Merry Christmas to you all as well. 

Hamada: Thank you, Aloha Malia, and thanking Malia Hill very, very much indeed. 

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