The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Senate Committee on Government Operations on Jan. 28, 2025.
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Jan. 28, 2025, 3 p.m.
Hawaii State Capitol
Conference Room 225 and Videoconference
To: Senate Committee on Government Operations
Sen. Angus McKelvey, Chair
Sen. Mike Gabbard, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
TESTIMONY IN SUPPORT OF SB1081 — RELATING TO LEGISLATIVE BUDGET OFFICE
Aloha Chair McKelvey, Vice-Chair Gabbard and other members of the Committee,
The Grassroot Institute of Hawaii would like to offer support for SB1081, which would establish the legislative budget office to produce fiscal analyses and reports on bills impacting state and county finances.
The fact that the Legislature often considers bills without any reliable estimate of what the proposed legislation will cost or save the government and taxpayers is a matter of great frustration to lawmakers and residents alike.
What would be irresponsible for a family budget — making purchases without any notion of their cost — is standard practice in politics.
The solution is to be found in the adoption of “fiscal notes,” an informed estimate of how much revenue a bill might generate or cost.
In 2022, the Council of State Governments evaluated the use of fiscal notes by states in six categories: intent or purpose of the bill, cost involved, projected future cost, proposed source of revenue, fiscal impact on local government and “other.” Hawaii, notably, failed to perform in any category and was the only state in the country without a process or independent office for generating fiscal notes.
In Hawaii, state agencies — especially the Department of Taxation — sometimes submit testimonies with projections of potential fiscal impact, but these are not reliable substitutes for fiscal notes. Agencies have their own biases and interests, and relying solely on agency estimates would undermine the Legislature’s independence.
SB1081 seeks to solve this deficiency through the creation of an office that will produce fiscal analysis and reports for the Legislature. Importantly, this analysis will also be available to the public.
Including fiscal notes in the legislative process would be an important step towards promoting greater fiscal responsibility and sound budgeting. Moreover, it would help lawmakers and the public in properly evaluating the true impact of pending legislation.
We urge the committee to pass SB1081.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
