Tag Archives: Business

Akaka Bill, OHA, Taxes

Lobbying On The Taxpayer’s Dime

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When you picture special interest groups and government lobbyists, you probably imagine corporate fat cats hiring sleazy lawyers to get them favors and interests from legislators.  (This also indicates that you’ve heard too many John Edwards speeches.)  Putting aside whether the unfairness of this image (unfairness to the business owners, that is–I wouldn’t dream of trying to defend the lawyers), it turns out that it doesn’t even correctly identify Hawaii’s biggest lobbying spenders.  Want to know who spent the most money trying to influence Congress so far this year?

You.

Or more specifically, Hawaii’s taxpayers.  It turns out that in the first quarter of the year, government agencies in Hawaii spent more money lobbying in Washington, DC than private business did.  According to Hawaii Reporter, Hawaii state and local government spent about $185,000 on DC lobbying, compared to about $122,500 from Hawaii’s private businesses over the same period.  Unsurprisingly, the biggest state spenders were the Office of Hawaiian Affairs (which continues to push for the Akaka Bill) and InfraConsult, Inc. (which lobbies on behalf of Honolulu’s rapid transit project).

Yes, the state spends taxpayer dollars to lobby in Washington for more taxpayer dollars.  (And on behalf of issues that have significant public opposition back here in the Islands.)  And then they raise our taxes.  If that isn’t an argument for more fiscal accountability in our spendthrift government, I don’t know what is.

Akaka Bill

Census and Sensibility

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It’s baaaack!

Call it the Frankenstein of bad legislation.  The Akaka Bill is back in the Senate.  And while some pundits don’t give it much of a future in the House of Representatives, the Senate gave it a hearing this past Thursday.  In truth, there is far too much riding on this bill for opponents to ever feel secure about defeating it.  At least, not unless there is a change in the culture that has created this issue.  Part of this is the misapprehension that Native Hawaiians are, as a group, severely disadvantaged . . . a myth that some have done nothing to refute, even though you might imagine that it might be nice to see a little good news now and again.  And so–in order to better inform the discussion–consider the latest US census information about Native Hawaiians:

Census Bureau Reports Revenue for Native Hawaiian- and Other Pacific Islander-Owned Businesses Increased 52 Percent from 2002 to 2007

The number of Native Hawaiian- and Other Pacific Islander-owned businesses increased 31.1 percent between 2002 and 2007, to 37,957 businesses, the U.S. Census Bureau announced today. These businesses generated $6.5 billion in receipts in 2007, a 51.6 percent increase from 2002. In contrast, the total number of U.S. businesses increased 17.9 percent between 2002 and 2007; total business receipts rose 32.9 percent.

These new data come from the Survey of Business Owners: Native Hawaiian- and Other Pacific Islander-Owned Businesses: 2007.

http://www.census.gov/econ/sbo/

The survey provides detailed information every five years for Native Hawaiian- and Other Pacific Islander-owned businesses, including the number of firms, sales and receipts, number of paid employees and annual payroll.

Data are presented by geographic area (nation, state, county, city and metro area), industry and size of business. Preliminary national and state data were released in July 2010.

“This important look at the economic activity of Native Hawaiian- and Other Pacific Islander-owned businesses is the only comprehensive and regularly collected data on this group,” said Tom Mesenbourg, deputy director of the Census Bureau. “These data confirm that businesses owned by Native Hawaiians and Other Pacific Islanders continue to grow both in number and in sales at rates that are faster than national rates for all businesses.”

People of Native Hawaiian origin owned 55.6 percent of all Native Hawaiian- and Other Pacific Islander-owned businesses in 2007. Guamanian- or Chamorro-owned businesses accounted for 9.6 percent, Samoan-owned businesses for 8.0 percent, and businesses owned by people of Other Pacific Islander descent, for 24.6 percent.

States with the highest number of Native Hawaiian- and Other Pacific Islander-owned businesses were Hawaii, with 11,383 (30.0 percent of all Native Hawaiian- and Pacific Islander-owned businesses nationwide), and California, with 9,255 (24.4 percent).

Among counties, Honolulu had the largest number of Native Hawaiian- and Other Pacific Islander-owned businesses, with 6,721; followed by Los Angeles, with 2,804; Maui, with 2,111; and Hawaii, with 1,722.

Among metropolitan areas, Honolulu had the largest number of Native Hawaiian- and Other Pacific Islander-owned businesses, with 6,721 (17.7 percent of all Native Hawaiian- and Other Pacific Islander-owned businesses nationwide), followed by Los Angeles-Long Beach-Santa Ana, with 3,675 (9.7 percent).

Other highlights:

* Of the 37,957 Native Hawaiian- and Other Pacific Islander-owned businesses in 2007, 4,172 had paid employees. These businesses employed 38,750 people, an increase of 32.2 percent, and their payrolls totaled $1.3 billion, an increase of 54.1 percent from 2002. Employer business receipts totaled $5.4 billion, an increase of 54.4 percent. Average receipts of these firms were $1.3 million.

* The number of Native Hawaiian- and Other Pacific Islander-owned businesses with no paid employees totaled 33,785, an increase of 33.8 percent. These nonemployers’ business receipts totaled $1.1 billion. Average receipts of these firms were $31,991.

* The number of Native Hawaiian- and Other Pacific Islander-owned businesses with receipts of $1.0 million or more was 884 in 2007.

* The number of Native Hawaiian- and Other Pacific Islander-owned businesses with 100 or more employees increased from 28 to 37 (32.1 percent).

* Construction and retail trade accounted for 44.1 percent of all Native Hawaiian- and Other Pacific Islander-owned business receipts.

The Survey of Business Owners defines Native Hawaiian- and Other Pacific Islander-owned businesses as firms in which Native Hawaiians, Guamanians, Chamorros, Samoans, and Other Pacific Islanders own 51 percent or more of the equity, interest or stock of the business. Additional data from the survey highlighting other minority- and veteran-owned businesses will be issued over the next few months. Subsequently, separate data sets will be issued highlighting additional characteristics of all businesses and their owners.

-X-

The Survey of Business Owners is conducted every five years as part of the economic census. The 2007 survey collected data from a sample of more than 2.3 million businesses. Data collected in a sample survey are subject to sampling variability, as well as nonsampling errors. Sources of nonsampling errors include errors of response, nonreporting and coverage. More details concerning the SBO survey design, methodology and data limitations can be found at <http://www.census.gov/econ/sbo/methodology.html>.

Economy, Taxes

Weekend Updates

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It has been a great couple of weeks for our friends at Hawaii Reporter, who even scored a Drudge mention and a Tonight Show one-liner out of their coverage of the Obama family vacation (see below).  So how about a quick round-up of things that cost us money?

John Carroll has an examination of the Jones Act and how it damages the Hawaii economy.  You know, the Jones Act debate isn’t exactly glamorous.  Most people can’t even get past the fact that it’s about maritime law before getting a tad sleepy.  But if you live in Hawaii, this is important.  Ever wondered why you practically need to a second mortgage in order to buy a box of cereal?  The Jones Act is the answer.  A small group of politicians and activists have been trying for a long time to get a Hawaii exemption to this federal law, and it’s time that their reforms got a fair hearing.

And then there’s the analysis of how the current Administration’s policies are going to mean higher gas prices.  Not good news for those in the Islands–where even when things aren’t bad, mainlanders blanch at our average per-gallon cost.  And no, the answer is not light rail.  Higher fuel prices trickle down, and it’s about more than just what you pay at the pump.  You pay those higher gas prices when you buy bus tickets, toilet paper, and just about anything else.

And finally, a lighter note.  Here’s the Tonight Show monologue with the mention of the Obama vacation cost.

Contracts, Hawaii

More on Native Hawaiian Companies

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For those who were intrigued by the Hawaii Reporter investigative work on the rise of Native Hawaiian Companies (and their somewhat incestuous relationship with government spending and granting), there’s more to be learned via the rise of Alaska Native Corporations.  A recent piece from the Alaska Dispatch sends about the success (and questions it raises) of the ANCs that gives a clue to where Hawaii may soon be headed:

In the face of explosive growth, and the huge financial successes and sometime extreme abuses that have occurred along the way, Alaska Native Corporations have come under heightened scrutiny, most notably by U.S. Senator Claire McCaskill (D-Mo.), who has pushed to end the contracting privileges of ANCs. It seems that for every success story about a company that’s used 8(a) contracting as a springboard to independence, there’s a concern raised somewhere about someone abusing the system. To combat the negative press and defend the privileges of indigenous people to fully engage their rights as uniquely situated business owners who are working for not just a handful of individuals but for entire communities, advocacy groups like Native 8(a) Works have also cropped up.

. . . .

This year news stories in Alaska and beyond have chronicled questionable contracts, high paid executives, and whether the money is making it back to the people Alaska Native Corporations are congressionally mandated to help — the impoverished people and communities of their region of origin. Most recently, articles by the Washington Post and ProPublica demonstrate how imperfect and thorny the intersection the of the U.S. government’s tribal obligations with politics, wealth and poverty, corporations and shareholders, taxes and accountability, can be.

Native Hawaiian organizations and their subsidiaries have only in the last several years begun to navigate the government contracting privileges that Alaska Native corporations have spent two decades learning to fully engage. If NHOs continue to follow the path cut by ANCs, they may well encounter great success. Should they find it, they can expect plenty of tough questions about what they’re doing, how they’re getting it done, who’s making money and who’s not, and whether taxpayers are getting a good value along the way.

Economy, Taxes

Account(in)ability

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Imagine for a moment that you had a few thousand dollars in loose change and bills behind the cushions of your couch, in your old jacket pockets, a spare wallet or two, and spread out through a few pairs of pants.  How big a jerk would you be in this situation if you then went to your best friend, told him you were totally broke, and asked to him to give you money to pay your rent?  If you answered, “No more a jerk than your average local politician,” you win.  Congratulations!  You truly understand the nature of Hawaii politics.

According to a recent report from the Grassroot Institute of Hawaii, the state has more that $1.4 billion in unspent excess funds sitting in “special funds” accounts–several of which have long been noted by the state auditor for repeal.  What is a “special fund”?  In short, it’s a little niche set-aside of state money for some specific purpose–say, public art education–funded through anything from state license fees to legislative appropriations.  You may recall that the 2009 Legislative Session included a finance bill that gave the Hawaii director finance authority to “raid” these special funds if necessary to pay government expenses.  This, not unnaturally, got some of us wondering exactly how much money there was available in these state special funds.  In light of the nearly relentless efforts to raise taxes and raid our wallets, the knowledge that there are untold millions of state dollars sitting around in untouched “special funds” is just a wee bit infuriating.

Thus, the Grassroot Institute launched its own investigation into the extent of Hawaii’s “special funds”.  You can read the full report here, but some highlights include:

  • In a review of 20 State Department reports, they found 186 accounts identified as special funds.
  • This accounts amounted to a combined excess balance of $1,412,357,203.
  • Divided equally among the population of Hawaii, these combined excess balances have a refund value of $1090.47.
  • The Hawaii Department of Transportation was the worst offender, with $582,449,161 reported as unspent, while the Hawaii Health Systems Corporation had the smallest excess at $34,837.

Really, how outrageous is the situation when the smallest, most responsible excess is still more money that many Hawaiians make in a year?  An economist once pointed out that there are four ways to spend money: 1. You can spend your own money on yourself, in which case you look for the best possible value in quality and price; 2. You spend other people’s money on yourself, in which case you look for the best quality and damn the price; or 3. You spend your money on other people, and look for the best value in terms of price and might compromise on value; and 4. You spend other people’s money on other people, and to heck with quality, value, price, or anything other than getting home from work a little earlier than usual.  Most government spending–especially as practiced in Hawaii–falls into Category 4.  We get nothing but sob stories from every possible state representative about lack of revenue.  We get tax increases and “Furlough Fridays” and guilt trips about the plight of government workers.  And all this time, they’ve been hoarding funds to the tune of $1.4 billion.  It boggles the mind.

Economy, Hawaii Legislature, Taxes

This Grade Is All Business

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For the longest time, the small businesspeople of Hawaii have comforted each other with rueful laughs and their club’s secret motto: “Hawaii: Live in paradise, work in hell.”  To put it mildly, Hawaii has not traditionally had the most business-friendly reputation.  At least not for the non-Doles and non-Hiltons among us.  And while some progress is being made (including a slight awareness that it isn’t necessary to completely handcuff small businesses from their inception and the election of more business-friendly politicians), there’s still a general lack on knowledge about how the Hawaii Legislature helps and hurts small business in Hawaii.  (And don’t disregard the importance of small business on the economy.  There are more than 100,000 small businesses in Hawaii bringing in over $2-3 billion in income annually (according to the Small Business Administration).

Enter PAYCHECKS Hawaii, a non-profit and non-partisan initiative of Smart Business Hawaii, whose unenviable job it is to rate all of Hawaii’s legislators on their business savvy.  The Paychecks ratings are based upon a combination of key votes (especially tax and fee increases); efforts to decrease or increase spending and the size of government; actions regarding employer mandates and labor bills (from worker’s comp to union issues and so on); conduct in hearings, responsiveness, and accessibility; and sponsorship/advocacy for initiatives to help the business climate.  Paychecks has just released its ratings for the most recent legislative session, and it looks like quite a few of Hawaii’s legislators need a remedial education in business and helping the economy.  Every legislator was given a grade from 1(the best) to 5(the worst).  So first the good news:

In the Hawaii Senate, two Senators got the highest score–Fred Hemmings and Sam Slom.  (Both Republicans.  Two Democrats, however, got the next highest score of “2”–Robert Bunda and Josh Green.)

In the House, the highest ratings went to Lynn Berbano Finnegan (R), Barbara Marumoto (R), and Kymberly Marcos Pyne (R).  Scoring the second best rating were Tom Brower (D), Corinne Ching (R), Cynthia Thielen (R), and Gene Ward (R)

And now the bad news.  There were so many second-worst “4” scores that listing them here would make this more like a roll call of the Legislature than a blog entry.  So let’s go with a simple Hall of Shame.

Scoring a worst score of “5” in the Senate were Gary Hooser (D) and Dwight Takamine (D).

And the dreaded “5”s in the House went to Michael Magaoay (D), Hermina Morita (D), Blake Oshiro (D), Marcus Oshiro (D), Calvin Say (D), and Roy Takumi (D).

Not good.  Maybe it’s time we had a few of them stay after school and write, “I will not handicap Hawaii’s economic future,” on the blackboard until it sinks in.