The Economic Revitalization Task Force
Price of Paradise · Hawaii Public Radio · aired 1998-05-03
Guests: Bob Bonar (Executive Director, Hawaii Youth Service Network); Charley Ice (Chair, People's Water Conference); Sam Slom (State Senator; President, Small Business Hawaii)
Duration: 1:00:59

[00:00:00] Randall Roth: This is Randy Roth, host of The Price of Paradise show. We're broadcast live Sunday mornings on KHPR and KKUA, and rebroadcast Sunday evenings beginning at 8:00 on KIFO. Our name, The Price of Paradise, comes from an old quote attributed to Thomas Jefferson, that the price of liberty is eternal vigilance. We like to think The Price of Paradise, our island home, is eternal vigilance as well. Everyone who works to bring this program to you is a volunteer, who believes in the importance of lively informed public dialogue. We believe that the brightness of any community's future is directly related to the level of activity in its marketplace of ideas.

[00:00:39] Randall Roth: Our sponsor is the Hawaii Community Foundation, an organization that encourages grass-root efforts to improve the quality of life in Hawaii and that administers charitable funds with efficiency and compassion. As just about everyone knows, the state legislature here in Hawaii is scheduled to close in two days, but every indication suggests that the session will have to be extended. The primary difficulty in getting things done on time this year seems to be related to the budget. In fact, I'm told there's the possibility they'll adjourn without a budget.

[00:01:10] Randall Roth: Rather than focus simply on specific areas in which the House and Senate differ, we hope this morning to talk more generally, and perhaps even philosophically, about the budget process and the assumptions that are being made. With me in the studio this morning are two outsiders of sorts. Sam Slom, actually is in the Senate, but as one of only two Republicans, he generally finds himself outside its circle of power. My other guest, Bob Bonar, is Executive Director of Hawaii Youth Service Network, a coalition of over 40 organizations serving children, youth, and families.

[00:01:44] Randall Roth: Concerned about where this year's legislature seemed to be heading, he and others formed something called the Community Revitalization Coalition, and we'll be hearing more about that in just a bit. We invited some insiders too, but they are preoccupied with the last-minute wrangling over the budget and won't be joining us this morning. Well Bob, why don't you get us started by telling us just a little bit about the folks from the social services sector that came together to form your coalition, and what it's all about?

[00:02:14] Bob Bonar: Yes, thank you, Randy. We really came together very early, just at the start of the legislative session, as a result of conversations we've been having among ourselves, and then met with some legislators to express our concerns over the recommendations of the ERTF.

[00:02:37] Randall Roth: And the ERTF is the Economic Revitalization Task Force, and I know that was put together by the Governor, and from what I've read, your group was as concerned about how it was put together as their recommendations themselves?

[00:02:51] Bob Bonar: Oh, yes, very much so. We felt the process was one not of inclusion, and including many of the stakeholders that should have been there. Stakeholders like the counties, like Health and Human Service people, like environmentalists. I've also noted the lack of women involved on that Task Force.

[00:03:16] Randall Roth: So, your perception was that it was the existing power structure that might be expected to preserve the status quo, and maybe not watch out for other interests that weren't at that table?

[00:03:29] Bob Bonar: Yes, very much so. When it was first constituted, most of us had some concerns about what might come out, and what came out seemed to validate those concerns.

[00:03:41] Randall Roth: Give me, give me one example of how their recommendations somehow validated the concerns that you've expressed.

[00:03:48] Bob Bonar: Well, I think it was heavily biased in terms of big business, big tourism, big labor, and big government, too. I think that it did not reflect a community base, as it should have. And the results out of it looked to me and looked like meant to many others, that it served big business, big government, big labor, instead of serving our communities and moving us in the direction that we were hearing from the communities that they wanted to move in.

[00:04:26] Randall Roth: And this morning's advertiser, the op-ed page, page B3 of the focus section, you and Charlie Ice state generally what your group came up with in terms of a framework if you will for approaching all this. Real quickly, what's that about?

[00:04:41] Bob Bonar: Well, very much what we wanted to reflect and our real approach from the beginning was, you got to get out to the community and listen to what the community was saying. And so that article I think reflects what we were hearing from the community. Now we had put together a community speaks process and we had included 350 people in 49 different groups, and what we seemed to get out of that is the concerns that we need to make personal income tax brackets more progressive. Those people who have the least should pay the least. We should support increased spending power with income tax cuts at the lower and middle income levels.

[00:05:23] Bob Bonar: Those are the levels that which people can will get that money back into the economy the quickest. Also support the maintenance of essential public services, the environment, housing, Health and Human Services. Simplify government policies and procedures and practices to improve services and reduce unnecessary overlap. And very clearly we were hearing from the communities that they didn't want an excise tax increase.

[00:05:56] Randall Roth: Okay, well that probably is a great segue into Sam, your, your general thoughts. Anything that Bob has said you want to pick up on initially and then I want to get your thoughts on the budget process itself.

[00:06:09] Sam Slom: Okay, fine. Well, good morning, Randy, good morning, Bob. Uh yeah, just a couple things. I think Bob and I share a number of points of view in terms of the Economic Revitalization Task Force. I would just say, however, that I've been involved in a number of groups, notably Small Business Hawaii, the Hawaii Small Business Congress, and the bipartisan Legislative Small Business Caucus that came out pre-ERTF. We came out during and immediately following the 1997 legislative session. We suggested things that could be done, should be done, and they're along the lines that Bob has suggested here.

[00:06:44] Sam Slom: The primary point being, go to the community. Don't announce to the community, here is the plan. Take it or leave it or take it or, you know, too bad. We try to get as much input as possible. As a matter of fact, the Legislative Caucus plan was published in the Sunday advertiser in August. You know, three months before the ERTF plan came out. And the hallmark of all of these programs was no tax increase. That you could do things, you could rearrange things, you could get the community input and we had plenty at that time, but we were asking for more, no tax increase.

[00:07:17] Sam Slom: It's also interesting to note that we were very critical when the ERTF was formed, uh, because of the the over dominance of as Bob said, big government, big labor and big business. The lack of women, I pointed that out immediately. But the point was, here was the Governor saying, these are the only people that can solve our problems. These are the movers and shakers of our community, and my response to that was, well where have they been? If if they're the movers and shakers and they have such power, why haven't they used their power for good and for improvement?

[00:07:49] Sam Slom: Why did they stand by on the sidelines as we watched our economy continue to go down?

[00:07:53] Randall Roth: You know Sam, I was talking to somebody who is on the Economic Revitalization Task Force again, which many people are calling the ERTF. I was talking to them the other day and they were bemoaning the fact that the legislature doesn't seem to be uh working in the direction of really adopting a significant portion of their recommendations anyway.

[00:08:15] Randall Roth: So their perception is whether you liked what they came up with, didn't like it, whether you like the way that group was formed or didn't like the way that group was formed, uh the legislature doesn't seem to be doing what it thinks should be done and I get the impression that the legislature isn't doing what Bob Bonar thinks should be done. Bob, is that reasonably accurate?

[00:08:40] Bob Bonar: Tough question. Um, I, yeah, I think there are a variety of things where I certainly would do things differently than the legislature.

[00:08:48] Randall Roth: Okay. [unintelligible — audio glitch] I got to come back to that specific. But my question Sam to you is what are they doing if the ERTF people are unhappy? Um your article in this morning's newspaper was quite critical of of what's going on and the choices that seem to be made and how they're being made.

[00:09:06] Sam Slom: Well, let me address that specifically because I think they have a valid uh criticism and a valid concern, meaning the ERTF uh people, that regardless of of who was on a committee and and what the recommendations were, uh there would have been a reluctance by the legislature, uh or anyone else to change. And and that's right because we're talking about change, we're talking about major changes that I believe are necessary.

[00:09:27] Sam Slom: However, the composition of the task force, the fact that they met behind closed doors, closed to the public and the media in every one of their meetings, the fact that they ignored their own working group's recommendations, the fact that to this day they keep saying there's no other plan out there when here is Bob is sitting here with his plan, I'm sitting with my plan. We have the Senate, uh part of the Senate had their own plan, ignoring reality and then insulting everybody by saying in the community, you don't get it. You folks are not smart enough so we're going to spend a million dollars to try to propagandize you.

[00:09:58] Sam Slom: And then leading off out of 60 proposals, leading off with a proposal to raise taxes on the poor, the retirees, those on commission and small business. It was doomed from the start. So I I think it's a question here of of arrogance personified and that's what did it.

[00:10:12] Bob Bonar: Bob Bonar, Yeah, I think one of the things that's very striking to me through it all is they held these 19 dialogue sessions out in the community and they heard the same thing from in the community that they heard that we heard when we did our community speaks program. So when when we speak of arrogance, I think there is an indication of it if you just disregard out there.

[00:10:35] Sam Slom: Not only not only did they hear it Bob, because we sponsored one of those 19 meetings in in East Honolulu, all of the recommendations, they were very well organized, and all of the recommendations, everything that was said at those 19 meetings, was dutifully reported, was recorded, was transcripted, and they had copies of it. And so then they went, you may remember after the 19 meetings, they said uh they went behind closed doors again and they came out and said, well, our plan is still the best and we don't need to listen to anything else.

[00:11:00] Randall Roth: That was it. You know as I sit here, I'm I'm thinking to myself, you know, those folks, I think did a well-intentioned effort to to get things going. I know Bob Bonar's folks have done a well-intentioned effort and and have come up with a plan to get things going. Sam, I know you've got your plan over here too, uh equally well-intentioned. I'm sitting here feeling like we're we're kind of arguing about the deck chairs if you will, and there seems to be a a sinking ship or at least my feeling is that this economy is in bad shape.

[00:11:30] Randall Roth: And it's more than just the economy, but from the outsider's point of view, I'm looking at that legislature and I'm wondering, well what is going on if if you're unhappy, Bob's unhappy, the ERTF people are unhappy. Uh is there a vision that's emerging? And if so, whose vision is it? What's going on over there?

[00:11:52] Sam Slom: Well, two comments. First of all, when you introduce me, you said that I was outside of the the power group, uh and uh admittedly and proudly so. Milton Holt never invited me to any lap dancing or anywhere else. Um but uh it's it's certainly true, it is the power group, those that are in power and those that would keep them in power that are holding fast to not making changes or not listening to the public. So we have all these different plans and and you're absolutely right, the public has a reason to be skeptical, cynical, uh confused and all of that.

[00:12:24] Sam Slom: Uh but the ideal situation would have been, as Bob said, to bring all the stakeholders together. Okay, here's the five or six or seven plans. Let's bring them together, let's put them down on the table. Now let's see just like when we go to the cafeteria, what would you like as your appetizer? What would you like as your entree? What would you like as your dessert? and pick and choose from the best of them. Argue them out in public, make sure that they stand the scrutiny of of open and honest discussion and then come up with a modified, adjusted plan and do it, implement it. That's the key.

[00:12:53] Randall Roth: Bob Bonar, uh are you equally critical of what you're seeing going on in the legislature right now so far as the process is concerned? Because Sam, between what he's saying now and what he's written in the newspaper this morning, uh is is just concerned I think among other things about how so much goes on behind the closed doors and and there seems to be a at least my feeling is there seems to be kind of an almost dishonest face put on what's really going on. Your thoughts?

[00:13:19] Bob Bonar: Well, I, I agree with that point. I, I do have problems with the whole process and the legislature of what's going on. I think that uh data and information, um the relative accuracy of what they base decisions on, um is problematic. I think the whole structure of what we ask them to do within the time frame we ask them to do it is is very challenging. Um, that's really an overall thing separate from just the budget process itself. Um, I think we need to find different ways to behave as I say in the the article. I think government needs to behave differently than it has in the past.

[00:13:59] Bob Bonar: But I think we as citizens, I'm not quite as ready to let the public off the hook because we put those folks there and we reelect them and we don't hold their feet to the fire, perhaps as much as we should as citizens.

[00:14:13] Randall Roth: You're listening to The Price of Paradise radio show. My name is Randy Roth, and we're talking about uh the budget process and perhaps some of the assumptions that are going into the discussions right now in the state legislature over just what sort of budget we should have. Everyone is concerned about how that budget is going to shape the future of Hawaii and their competing visions out there as to just where we want to go and how we're going to get there. And this morning we're talking to Bob Bonar and Sam Slom in the studio and as many of you who would like to join in this conversation from home.

[00:14:44] Randall Roth: So if you'd like to ask a question or make a comment, now's a great time to grab the telephone and give us a call. Our number is 955-8821, or if you're on a neighbor island, it's 1-800-955-8821. Again, we're talking about the budget process and possibilities, and with me in the studio is Sam Slom, who has headed up Small Business Hawaii, an association of about 4,000 small businesses here in Hawaii. He's headed that up for 14 years and has been a member of the State Senate for two years. Also Bob Bonar, Bob has a Master's degree in Educational Psychology, uh for most of his working life, he's been developing programs for at risk children and adolescents.

[00:15:29] Randall Roth: He's been the Executive Director of the Hawaii Services, the Hawaii Youth Services Network for three and a half years and before that, he worked with the Maramed Foundation and the Kahie Mohala Hospital. Uh the number again 955-8821, we go to Ken in Waipahu. Good morning, Ken.

[00:15:48] Ken: Hey, good morning. How are you? I'm fine. What do you have for this morning?

[00:15:51] Ken: Well, the question I wanted to ask is uh whether or not your speakers felt that there was some uh complicity uh with some of the media in Hawaii. Uh not this program of course, but uh because you do uh point out when there are problems, but uh it seems like uh when there are big tax protest rallies and uh a lot of alternative programs being offered, the it seems that the uh media almost seems to want to collaborate with those in power by putting the thumb up and saying, well, well, there's really no problem here and and just ignoring the alternatives.

[00:16:25] Ken: And I'm wondering if the if your two guests uh feel that way about the media in general or if they, if maybe I've missed something.

[00:16:32] Randall Roth: Okay. Ken, stay on the line. We'll give you a chance to say something else. But Bob Bonar, if something is is broken, what's the media's complicity in this?

[00:16:42] Bob Bonar: In in reflecting over the past couple months, I guess [unintelligible — audio glitch] feeling has been that uh there there's been a lack of balance in the media, and I haven't seen the kind of analysis I'd like to uh to see. Um, you you use the metaphor of rearranging the deck chairs. Um, I I guess in some ways my sense has been for some of the plans proposed, the emperor has no clothes. And um I just think there there were not sufficient merits, um and that should have raised questions for the media that they spent more time looking in more depth at.

[00:17:24] Randall Roth: Okay. Sam Slom.

[00:17:25] Sam Slom: Oh jee, the media at fault? Well, let me see. Complicity. Let's start off by re reminding everybody uh that the two newspapers enjoy a monopoly status granted to them by the state legislature. That's the first thing. Uh the second thing is that uh re let's remind everybody that the former publisher just recently, the former publisher of the Advertiser, was a member of the ERTF Task Force and so has used that as a vehicle to sustain not only the call for the ERTF package but also for the status quo.

[00:17:57] Sam Slom: Um we might also uh remind our listeners that they can probably get more information on a daily basis about the Miss Universe uh contest and the background and statistics on each and every one of the lovely women that are here than they can on the budget process or the questions uh that Ken wants the newspapers to ask. And finally, even in my own column this morning, which was sliced and diced and uh really uh chopped up, it doesn't get the essential part that it is the government not doing its business and the government utilizing the budget and other people's money for political rather than economic purposes.

[00:18:33] Randall Roth: Back to you, Ken.

[00:18:34] Ken: Well, thank you. That's uh that's very much what I uh what I suspected. Uh I know Sam was down uh recently at a rally at the uh uh at the Capitol in protesting the tax increase and uh both of the rallies that appeared in the last couple weeks uh almost nothing appeared in the newspapers. I was amazed.

[00:18:54] Randall Roth: Okay. Ken, we appreciate your call this morning. Let's go to Lloyd in Waikiki. Good morning, Lloyd.

[00:18:58] Lloyd: Yes, hello.

[00:19:00] Lloyd: Aloha. Um yes, there's two things that I want to say. One thing, if the governor would have used the original uh budget that his uh economy group had last year instead of getting his own group, another group to see what he wanted to hear, I think we'd be in less trouble than we are today. And secondly, um why are people thinking that we're going to continue with this boom that we had back with the Japanese uh situation. We have to live with what we have. I don't know if we're having economic uh problem or if we're just going to have to adjust to a downgrade and quit thinking we're going to keep going up all the time. I mean, to me, it's it's ridiculous to keep thinking that we're going to be back four or five years ago. Uh I don't I think that's impossible.

[00:19:43] Randall Roth: Lloyd, you raise an interesting point. Bob Bonar, is it your impression that the legislature is operating on the assumption that what we're going through is is temporary and if we just hold our breath long enough, um you know, we'll we'll get some air here real soon? What what's your impression of underlying assumptions along the lines of what Lloyd is raising?

[00:20:03] Bob Bonar: Well, clearly, what the ERTF's uh package was counting on was a the whole reason that they had for reducing taxes at the high end was for reinvestment in Hawaii. Um I think our group has said, wait a minute, um is that really likely to happen? Or can we depend on just the tax credits locally or the tax uh benefits uh locally to go right back into our economy? Where when our past booms, both the uh '60s and early '70s, and then in the '80s as well, uh were dependent on outside investment and focused on structures, building structures. Um and so we doubt [unintelligible — audio glitch] in itself, it isn't the tax changes that are going to make a difference.

[00:20:56] Randall Roth: Sam Slom. Well, Aloha, Lloyd. Aloha. Uh first of all, it's been uh closer to eight to nine years rather than four to five years, and uh people have uh lived with this, uh except uh the people that are out of jobs and the people that have moved away. And I think part of the problem is that uh uh a number of people up until the recent uh couple of months, were still arguing that this is a cyclical problem that just wait a little bit longer and it'll it'll pull itself out. And if you listen to some of the governor's uh economists, they they're already saying, see, look look, it's already turning up right now. It's starting to turn around. Well, they're wrong about that, because it is not cyclical, it is structural. And if it were cyclical, you would see the same kinds of things happening in other states or other countries, and you see exactly the opposite. We are on the bottom of the feeding chain. 49 other states are all progressing uh from a little bit to a lot, and we are not, because we're doing exactly the the opposite things. We have failed to diversify our economy, we have failed to listen to other voices. We have pinned all of our hopes on government-subsidized tourism. Uh and it's not a question, however, though, that we have to adjust to downgrade. Uh I think uh uh that's a very unfortunate thing if we say, well, it's going to get worse and worse and you just have to do worse and worse and and you know, if we do that, we will lose all of the the creative, innovative, hardworking people in our community. What we must say is we must go in a different direction. And again, that gets us back to the point. If you keep electing the same people, if you keep electing uh people without vision or without a clue as to what to do, or people that will not listen to others, you will get the same results. And then as Bob said, we as citizens have to take responsibility for that, because we put them there, we maintain them there. Um lots of times people throw up their hands and say they're powerless, but they have a great deal more power. So I'm optimistic from that standpoint. We're going to see an awful lot of changes come uh Tuesday, November 3rd of this year.

[00:22:51] Randall Roth: Lloyd, thank you for your call this morning. We go to Alma from Kailua. Good morning, Alma.

[00:22:56] Alma: Good morning. I'm probably going to make myself unpopular with all my military friends, or retirement military, but it seems strange to me that with their large military presence in the islands, um and their spending, that they do not have to pay any general excise tax. After all, they're using many of the state's facilities. Um uh I know they're federal employees, but there are other federal employees, I'm sure here, who um cannot use PXs, and therefore have to pay general excise tax. What's your comment on that?

[00:23:32] Sam Slom: Well, it's true that we've carved out exemptions in in certain areas, but uh there's an awful lot of uh military personnel that of course uh shop well beyond their the PXs and the B BX's, and they are paying general excise tax. Uh and the the really sad thing is, as we noted a couple of years ago, there's an awful lot of military families that are on uh food stamps and that uh can't even care for themselves. Um but I I think your your point is well-taken that uh when we look around, for example, there were a lot of people that did not realize that the banks do not pay the general excise tax. Instead, they pay a tax called the franchise tax. Uh and so a lot of people thought that uh it was very presumptuous at at best for the banks to be advocating a 34% increase in the general excise tax for others uh while they were advocating a 50% decrease in their corporate income taxes and their franchise taxes. But again, I guess it goes back to whoever is making the decisions and uh to hold those decisions up to the light. Uh that's why I stress this idea of having things in the open rather than behind closed doors. Uh so we have to do that and and uh if we do that, we'll find uh possibly there's a a tremendous amount of leakage not only in the general excise tax but in personal income taxes as well.

[00:24:46] Randall Roth: We go to uh Alan in Lanikai. Good morning, Alan.

[00:24:48] Alan: Yes, good morning, Randy, Sam.

[00:25:17] Randall Roth: Morning, Alan. Yeah. uh a couple of points, and I'd like your comments. First, when I understand that in recent years, New York, Michigan, Arizona, New Jersey, and Massachusetts, which I gather are high-tax states, uh substantially cut the tax burden on their people, and as a result, their net tax revenues went up, because their uh their economy responded, the tax base improved, and the state's coffers actually benefited by reducing taxes.

[00:25:47] Randall Roth: Hey Alan, stay on the line. I'm going to come back to you, but I I want to hear Bob Bonar's reaction to what you've just said and then I will come right back to you. Bob Bonar, cuz I get the impression, Bob, your group might approach this one a little bit differently than what we're hearing from Alan so far.

[00:26:37] Bob Bonar: One of my concerns has been the use of data, and I think we can point out specific things in other places. Appreciate what's happening nationwide economically is not the same thing that's been happening in Hawaii. We have been uh with a stagnant economy for seven years. Um the the ERTF's approach was to say we needed major growth in the area of tourism and major support for tourism. Um and and it's kind of surrealistic to find myself agreeing with Sam as much as I do on on some of this.

[00:27:31] Randall Roth: I won't tell Bob. Okay. Right. But uh I think the whole what we're hearing from the community is we need to diversify the economy. That it is not the taxes that are going to revitalize our economy. It's not the changes in taxes. And if you look at what happened in those other places, it wasn't just that. That was one of the elements perhaps, but that wasn't the engine that changed things around.

[00:28:33] Alan: Yes, I'd like to echo those last two comments there. Uh I summarize it this way. You, I, me, in Hawaii, we have more government than we can afford. And let me just give you one neat little example. Number of years ago, on the island of Hawaii, there was a major construction project. My understanding is they they had to get 52 permits. And as a taxpayer, I don't want to pay for the bureaucracies that had to approve 52 permits. I would think a half a dozen would be plenty.

[00:29:33] Sam Slom: Yes, thank you. Hi Alan, I just want to respond to a couple things. First of all, um I stand square uh for reducing cutting taxes, not not holding them the same or raising them a little bit, but they should be cut because my my whole philosophy is our problem is not one of lack of taxes, it's one of lack of leadership. It's not one of lack of money. We have plenty of money. We've wasted it, and I'd like to expand on that later. But um it certainly is true that these other areas not only reduce taxes, but in combination, they reduced regulations, they utilized privatization as a tool, and most importantly, they had a can-do attitude that encouraged existing local small businesses and individuals and encouraged others to come in.

[00:38:00] George: But you know, we're not doing anything. We're we're blaming uh people in office that were put in office primarily by public employee unions. And we're not blaming ourselves for failing to get out to vote. And I would guess that a fairly large percentage of your listeners didn't vote in the last election. Now that's where the fault lies. And I'm not going to be pointing fingers at at individual legislators because the people who didn't vote put them in office. That's all I have to say.

[00:38:34] Randall Roth: Just a listeners know, George is the founder and now columnist for Hawaii Business News. And I'm sorry, Pacific Businesses, that's right. Thank you, George. We go to our, oh, so we've got a our our producer is putting notes in front of us. We go to Janet from Kaila. Good morning, Janet.

[00:38:54] Janet: Well, good morning. I'm happy to hear your program. I'm a resident in Kaila and I have two questions. Uh is anyone in the legislature uh pushing the uh copying the federal tax? I have heard that if uh we would do that, we would have a less regressive tax. And so, I'm interested in anybody pushing for a copy copying the federal tax program. Secondly,

[00:39:23] Randall Roth: Okay, Janet, let's let's get a quick response to that one. And by copying, I assume you mean where we would pay a percentage, let's say a third or something like that, of whatever we pay to the federal government in income taxes, we'd pay that to the state government.

[00:39:36] Janet: Uh, I'm not sure what people meant when they'd say that if we were like uh if we were to tax in the same way that the federal government does, we would be less regressive, whereas we are very regressive here. Okay, let's get a let's get a reaction to that from each of our guests, and then I'll come back to you. Janet I know you've got another point to make. First, Bob Bonar.

[00:39:56] Bob Bonar: Yeah, in the community revitalization coalition, the CRC, we looked at a whole host of different uh kinds of taxation schemes. Uh what was talked about most was setting the state tax rate at one third of the federal rate. And I can't remember at the the moment what the problems were with that, but it it did reflect a significant uh deficit in terms of the plans that were being talked about, and Sam certainly knows more than about that.

[00:40:28] Sam Slom: Well, certainly uh uh Janet, there were a number of organizations and individuals uh that have proposed uh either taking a percentage of the the federal taxes or uh taking the tax code entirely. And so there's two things there. Uh first of all, if you took a percentage uh of the tax code, uh the the IRS, as Bob pointed out, you would have less revenues here. That's why it's being opposed here. It has been a hallmark of the House Republican tax restructuring plan. But the other part of it is, we adopt almost every year, portions of the changes that are made in the internal revenue uh service code. But I I tell you portions because, for example, if you just recently did your taxes, you'll notice that a personal exemption in Hawaii is worth less than a personal exemption in your federal. Uh long term care benefits, other benefits that have been passed nationally have not been adopted here, and as Bob points out, the primary reason for that is the change in revenue. Our state wants more money from you and that's where it lies right now. Janet, back to you.

[00:41:26] Janet: Thank you, that's a help. Uh and the other question is, an opinion that I think the uh tax on services like the dentist, the doctor, optical, and food is criminal. I think that's terrible for low income people and I see it in the neighborhood I live in.

[00:41:47] Randall Roth: Now, be clear about which side you're on on this, Janet.

[00:41:50] Janet: I'm on the side. Okay. I am concerned about everybody who earns uh less than say 35,000. Okay. And they shouldn't be paying any of these taxes.

[00:42:04] Randall Roth: Janet, I really appreciate your call this morning. Thank you. We go to Jerome from Kaimuki. Good morning, Jerome.

[00:42:10] Jerome: Good morning. I have one question and one comment, please. Um the question is, did the economic revitalization Task Force study our current transportation condition, especially in Oahu? And the comment is, we just had a gentleman speak at a Rotary Club about tourism in Hawaii and I hear almost nothing about what people actually come to Hawaii for. I hear all these statistics about tourism, but what do people come to Hawaii for? And I'd like to suggest that this is an excellent opportunity to seriously look at uh promoting Hawaiian culture once again. I mean, we're in an economic downfall, and I think people come here for the land and to experience the culture and I think it's a a critical issue that we're overlooking, and I'd like your comments on that, please.

[00:43:01] Bob Bonar: I certainly agree that that's what people come to uh Hawaii for. I I think this reflects back on one of CRC's position also, something Sam mentioned earlier, the need to diversify the economy. I think it's a mistake anytime we focus on one aspect of a the economy, and uh keep depending on that as the engine. We need to look at other possibilities and create tax credits to promote and develop forward looking local business, uh agricultural research, alternative energy, uh niche marketing and other forms of tourism that better respect the land and the culture.

[00:43:46] Sam Slom: Very quick very quick answer because Jerome asked a specific question. Did the ERTF uh study the transportation condition? The answer is no. The ERTF had a very narrow focus and so they did not uh talk about that at all. And the other thing is uh our problem here in Hawaii is that we no longer have an identity. What does Hawaii stand for? There are other places that have good climate, beautiful beaches and all of that. As Bob says, and those of us in the business community certainly agree, we should be talking more about the our cultural uh positives, ecotourism, sports tourism. There's all kinds of things that we can do. And that's why it's incumbent not to have the government subsidize any business or industry. Let people do it on their own.

[00:44:26] Randall Roth: You say the uh ERTF had a a narrow focus. We had those folks in here a while back and and they were saying that really it was it was not a focus at all, that it was uh an attempt to to get way above things, you know, 30,000 feet, I think was the the reference. And and as I understand it, they felt that more important than the specific details, the specific changes, they felt that that in order to get out of where we are right now, there had to be something bold, something big, some sort of shake-up, if you will. And I guess as I'm listening to the criticism of the ERTF and I'm watching from afar what's going on at the legislature, I get the impression that while we might disagree with each other's specifics, I don't see anything bold going on and perhaps that's a problem, Bob Bonar?

[00:45:19] Bob Bonar: Uh, I I agree that some uh dramatic steps um would be very helpful. Um I would just not choose the dramatic steps that I saw in that particular plan. I I think uh looking at the difficulty at the uh the lower end and I'm not an authority on taxes by any stretch of the imagination, um but I I look at how the self-employed person is, um hits that top rate at $20,000, and I just think the we need to be conscious of the ease of entry and exit from doing business. And if we really want to generate um business and be forward looking, it's exactly those people, the entrepreneurs at the lower ends, the early stages we want to be encouraging in any way we can.

[00:46:18] Randall Roth: Better those people would have come down from the 30,000 feet because I I think that a lot of them didn't have oxygen up there. Would have come down on the streets and listen to the people. I didn't mean to set you up for that step. Um, I I've got to get moving so that we can get to uh the folks who have been waiting real patiently, but Bob Bonar you had something you wanted to add briefly.

[00:46:34] Bob Bonar: I I think one of the fascinating things for me is looking at the metaphors that are used by the various groups, the deck chairs on the Titanic and all that metaphor uh holds but looking at 30,000 ft, I'm I'm mindful that one of the challenges of modern warfare and one of the criticisms is you don't see who you kill when you're dropping bombs from 30,000 ft. And while I appreciate and respect many of the people on the ERTF and they did given the context with which in which they function, they did an admirable job of coming up with a consensus. It just didn't include the people in the communities who were going to be uh hurt by the fallout from those recommendations.

[00:48:05] Randall Roth: In case you tuned in late, this is the Price of Paradise radio show. My name is Randy Roth. With me in the studio is Bob Bonar and Sam Slom and we're talking about this year's budget process and uh just where it might go and where it might take uh the state of Hawaii. We've got some folks who have been waiting patiently. We go next to Oscar Curran from Honolulu. Oscar's been a guest on our show before. Good morning, Oscar.

[00:48:43] Oscar: Good morning, Randy. Uh my question is to uh uh Sam Slom, and it has to do with the uh $23 million appropriation that the Ways and Means Committee does not want to approve for adolescent child mental health services. But before I ask this question, I want to make this general observation that professional providers of mental health services as well as consumers generally regard the state mental health service system as a disaster. And it's been my experience that in contrast to most uh mainland communities, mental health services have been have been decentralized and have been turned over to community voluntary as well as privatization arrangements rather than maintaining a very rigid sterile state bureaucracy that Hawaii has. So that's been a major issue. Anyway, the question I have is this, do I understand that the $23 million request has been submitted to the ways and means committee without a plan for the expenditure of these funds, which I find incomprehensible?

[00:49:41] Sam Slom: Well, you're absolutely right, Oscar, about several things there uh in terms of the state, as we know the state uh uh was charged by the federal government uh with not doing a proper job in terms of mental health services. And as far as the the 22-23 million dollars, um there really is a lack of planning and that's why I I keep saying, our problem really is not one of money but it is of leadership or lack of leadership. And certainly, if you're going to talk about the delivery of services uh whether you're talking about mental health services or even education, my feeling is that the best delivery is at the community level and uh getting a lot more people involved in it, people that have more of a passionate commitment than doing it uh to do it rather than those people that are just number crunchers.

[00:50:24] Bob Bonar: Yeah, I I find myself agreeing a little bit with Sam again. Um, this makes me nervous. Um the the uh the need for being being community-based and strengthening communities and their capacity to respond to the the needs is critical. We need to centralize that whole whole thing. Want to This is really off of the CRC and I want you to know what I say now, in no way reflects um the CRC.

[00:50:55] Randall Roth: And that's the community revitalization coalition that you helped put together. Correct. Um, that consent decree, the state uh departments were given uh the opportunity to create the plan and the implementation plan in response to the consent decree. One of the problems with that is it maintained current structures in terms of the delivery of services. Um that whole thing is undergoing tremendous change right now, um but what it's all based on is a consent decree signed in, I believe it was October 1993, um that provided the time for the state to come up with the plan and then implement a plan by the year 2000. Um, unfortunately uh we've hogtied ourselves, I think with many of the regulations and administrative rules we have within government in um preventing us from getting those services out to the community and uh the problem is planning again.

[00:53:05] Randall Roth: Okay. Uh Oscar, appreciate your call. We're getting down to the last eight or nine minutes. We've got uh a bunch of folks all our lines are are full and these folks have been waiting a while so I'm going to try to get to each of them but I would ask that that each try to keep their comment as as short as possible so that we can get to the rest. Let's go to Rene in Punch Bowl. Good morning, Rene.

[00:53:22] Rene: Yes, good morning, Randy. Um, I just wanted to make a short comment um because I'm hearing that, you know, people are blaming the voters for a lot of what's going on, and that really um kind of irritates me because people feel powerless, like they just can't do anything, right? But they feel and that's why they don't vote. But they feel that way because we we were manipulated by manipulated information. We don't get enough information to rationally think about the problems. Mostly we get a particular point of view, that whatever is good for business is good for us, for instance. Even when we look at the projected loss of revenue and tax changes obviously will hurt us, it's in the millions of dollars. For instance, they only, you know, on your show, the the person mentioned only seven states who lowered taxes and and therefore the economy rebounded, but they don't mention all the others who raised taxes and the economy rebounded. You know? So people don't vote, they don't get involved because the quote unquote, movers and shakers, consciously attempt to hide um information from us and manipulate and confuse us, especially information that's against their point of view. For instance, talking about Moody's. What Moody's said Moody's said is, don't come and tell us as a result of the tax package economic development is going to surge. And that's you know, when Mr. Slom was mentioning um you know, change your point of view, uh this ERTF package will not make the economy surge. You need to look at something else. That's what they were referring to. So information about all points of view will empower us and that's what make will make us vote more, I think, when we get involved in the process.

[00:55:16] Randall Roth: Thank you, Rene.

[00:55:18] Bob Bonar: Thank you.

[00:55:18] Randall Roth: Bob, you had a quick comment.

[00:55:19] Bob Bonar: Yeah, I I'm just not willing to let the voters off the hook. And I agree with everything you say about how information is handled. And uh I guess the word that comes up to me is obfuscate, and I couldn't even find that in the dictionary, but it has to do with with that confusion that's created that the deliberate confusion. You know, I looked for that the other day. It's not in my dictionary either. Interesting. We go to Lehua in Kalihi. Good morning, Lehua.

[00:55:55] Lehua: Good morning. Thank you very much, Randy. My comment has to do with how people define define community based. Often times, I feel that people tend to view us in a plantation mode or quote island mode and as a community, we can be educated. I don't need someone telling me how I should think. And I believe that if each of the legislators, any of the leaders, whether they're private or public servants, need to understand that Hawaii people understand, we can read, we can listen, but you need to give us the information in ways that we can make a decision. If you tell me that community-based operations is a process, then make sure that you're of a commitment to the way the consensus comes about. I don't see that with our legislators, I don't see it in the news that comes out, they editorialize, they select and then they come back and tell us, well, you haven't voted.

[00:56:41] Randall Roth: Okay. Lehua, appreciate your call this morning. Thank you. We go to Bill in Kailua. Good morning, Bill.

[00:56:56] Bill: Well, good morning, gentlemen. I am not hearing anything about vigorous revival of agriculture to replace the decimation of sugar and pineapple. Okay. And also I hear no uh thought about utilizing the example of Puerto Rico, which uh where they offered its very interesting tax incentives to bring businesses into the island. All right. Bill, I'm sure that we do that here. I'm sure there are businesses that can find a comfortable home in Hawaii. Bill, I appreciate appreciate your call. We've got 30 seconds to hear from Samad before our guests in the studio sum up their thoughts. Samad from Honolulu. Good morning.

[00:56:57] Samad: Good morning, Randy. I have one question: why historic and present bias a fact of schizophrenic bias for progressive taxation?

[00:56:58] Randall Roth: Okay. We'll let's let's take that as as a comment. Uh, and I appreciate your call this morning.

[00:56:59] Randall Roth: You know, we're down to to the last few minutes and um and I want to get closing thoughts from Sam Slom and and Bob Bonar. Um, but I got to quickly add my my own little two bits here. Number one, you know, we talk so much about tax change and I don't think I've heard anyone during this entire conversation, I'm talking about over the last few months, uh refer to any of the tax review Commission studies. These are the people who are recognized as experts who spent a tremendous amount of time studying the system, coming up with recommendations for what they at least feel would be more efficient, more fair, etc. And it's interesting to me that we as a community can somehow engage in this conversation and not at least refer to what a group like the Tax Review Commission has done. And I'd go on but I don't have time. Because we ignore them. We we have tax we have study groups, we have commissions, we have task forces and even if they do a good job, then we ignore them, just like we ignore as I say the legislative auditor's reports. And I think that's really unfortunate because there've been some very good ideas and that's why I said earlier, you should put all the things on the table, everybody meet around the table in the open and say this is good because, that's not good because and and make your decision there. Okay, I've got one minute for each of you to say what hasn't been said or to emphasize what needs to be emphasized, Bob Bonar.

[00:57:00] Speaker 1: are similarities, and we tend to go on and on. I think one of the best is Kaelahoku, which really attempted to set out a vision for the future. And it was based upon what our children were seeing.

[00:57:00] Bob Bonar: Oh gee, I think I think uh Sam mentioned all the studies that have been done. I'm conscious of all the community processes that have been done where they're.

[00:57:15] Speaker 1: And what's fascinating to me about that is that it reflects completely all the other different community planning activities that have gone on. The children are telling us what they want for a Hawaii tomorrow. And they also set out the Kaelahoku process, sets out benchmarks and indicators as, how do we know when we're getting there? And I think we need to be much more online with that kind of a project.

[00:57:48] Speaker 2: Okay. Sam Slom, one minute.

[00:57:50] Sam Slom: We need accountability. We have to hold people responsible for what they say and and what they do. And George Mason is absolutely right, having only 46% of the eligible people vote is is a terrible thing. And when uh uh people say uh like Renee that they're frustrated and they feel powerless, if you don't vote, if you don't get involved, you will be powerless. It will be a a self-fulfilling uh proposition.

[00:58:11] Sam Slom: Bill and Kailua brought up uh agriculture and my general comment for that is, if you improve the business climate, if you change the attitude, if you have people that really have vision, uh then you're going to see all kinds of ideas from people that felt that they didn't have anywhere to go before. And finally, I I'm waiting for the program when I can say is Samad that progressive taxation really is confiscatory and not the way to go. And we'll leave that for another program.

[00:58:15] Speaker 1: ment for that is if you improve the business climate, if you change the attitude, if you have people that really have vision, then you're going to see all kinds of ideas from people that felt that they didn't have anywhere to go before. And finally, I I'm waiting for the program when I can say as Samod that progressive taxation really is confiscatory and not the way to go. And we'll leave that for another program.

[00:58:35] Speaker 2: Okay. Well, that's Sam Slom, who is a state senator and has headed up Small Business Hawaii for 14 years. We also heard from Bob Bonar, executive director of the Hawaii Youth Service Network. Okay. Well, that's Sam Slom, who is uh a state senator and has headed up small business Hawaii for 14 years. We also heard from Bob Bonar, executive director of the Hawaii youth service network. The price of Paradise radio show is produced by Susie Roth. The production chief is Jeff Alardy. Our sponsor for many years now is the Hawaii community foundation. You've been listening to the price of Paradise radio show. I'm Randy Roth. Aloha.

[00:58:46] Speaker 2: The Price of Paradise Radio show is produced by Susie Roth. The production chief is Jeff Alardi. Our sponsor for many years now is the Hawaii Community Foundation. You've been listening to the Price of Paradise Radio show. I'm Randy Roth. Aloha.

[00:58:45] [music outro 134 s]