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From: xxx On Behalf Of Kaiser Permanente-Hawaii
Sent: Tuesday, June 27, 2017 9:09 AM To: xxx Subject: What the Maui Health System Transfer Means for You An important message from Mary Ann Barnes, RN, President, Kaiser Foundation Health Plan and Hospitals, Hawaii Region, and Geoffrey S. Sewell, MD, FACP, President and Executive Medical Director, Hawaii Permanente Medical Group Kaiser Permanente has been on Maui for close to 50 years. Now, we’re excited to do even more for health care on Maui and Lanai. On July 1, 2017, Maui Memorial Medical Center, Kula Hospital, and Lanai Community Hospital will become part of Maui Health System. Maui Health System is affiliated with Kaiser Permanente. What does this mean for you as a Kaiser Permanente member? There is no change for you. You can visit your Kaiser Permanente doctor as usual. You can go to the same Kaiser Permanente clinic you visit now. Your care team will help you get the care you need. As always, we will keep you at the center of everything we do. These community hospitals will have Kaiser Permanente’s electronic medical record system. If your Kaiser Permanente doctor sends you to one of the hospitals, this system will support your care. What does this mean for the community? Maui Memorial Medical Center, Kula Hospital, and Lanai Community Hospital still will be open to everyone. The hospitals will see all patients, regardless of health insurance coverage. Many of the same doctors and staff will continue working there. We appreciate everyone at the hospitals and clinics who has cared for the community for many years. Kaiser Permanente already serves 59,000 members on Maui. And we’re pleased to be working with the State of Hawaii and local medical community to provide high-quality, patient-centered, affordable care to all residents of Maui and Lanai. It’s what we believe in. It’s what we do every day. Thank you for being a Kaiser Permanente member. It’s truly an honor to be your partner in health. Sincerely, Mary Ann Barnes, RN President, Hawaii Region, Kaiser Foundation Health Plan and Hospitals Geoffrey S. Sewell, MD, FACP President and Executive Medical Director, Hawaii Permanente Medical Group
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WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers To view the archives of the Tax Foundation of Hawaii's commentary click here. Weekly Commentary For the Week of June 25, 2017 Anatomy of Epic Fail on Rail By Tom Yamachika, President In early May, on the day our Legislature adjourned, one of the newspapers summarized our Legislature’s work on the Honolulu transit surcharge extension as “Epic Fail on Rail.” With the Federal Highway Administration poised to pull out its $1.5 billion commitment if no funding solution is firmed up, our legislators need to get their collective act together if they want to help the project get back on track. How did we get to be in this spot? This week, we’ll retrace Senate Bill 1183 and its tortuous history through our legislative labyrinth. SB 1183, like its companion House Bill 1442, was a 6-page bill to extend permanently the current rail surcharge on general excise tax (GET). The bill also proposed to give an unspecified percentage of the surcharge proceeds to the state DOT (Department of Transportation). The other counties were given the option to adopt their own GET surcharge beginning in 2018. The first committees to work on the bill, the Senate Committees on Transportation and Energy and Public Safety, Intergovernmental, and Military Affairs, came up with a 78-page monster containing two parts, one that would extend the surcharge permanently and another that would extend it to the year 2032. (Yes, these conflict with each other.) Other sections of the bill would establish a tax credit for low-income taxpayers; raise the base GET rate to 4.5% for everyone (the surcharge would be on top of that); and contained a pages-long laundry list of mandates to the City. At the time, the Senate Transportation Chair explained that she wanted to keep all options open. The Senate Ways & Means Committee took a very different tack. Its 10-page version basically said, “We’ll take away the State’s 10% skim off the surcharge, but no extension; you’re on your own.” That draft unanimously passed the full Senate and went over to the House. There, the House Transportation Committee kept the bill alive by putting blanks in it – its draft extended the tax to an unspecified date, reinstated the skim but replaced the percentage with a blank percent to recover the State’s costs and a blank percent that would go the DOT for State highway projects. The House Finance Committee then filled in the blanks, extending the tax for two years, and dropping the skim to 1%, none of which would be earmarked for the DOT. This version went to the Conference Committee, and then surprising things started happening. First, the Senate proposed a new draft, radically different from the version that passed the Senate, which extended the surcharge for ten years and raised the skim to 20%. The House came back with a draft that left the GET surcharge untouched, dropped the skim to 1%, and raised the hotel room tax from 9.25% to a hefty 12%. The latter proposal, though innovative, caught the hotel industry unaware, prompting vigorous objections. Then-Senate money chair Tokuda agreed to that version with tweaks a few hours later, thereby making the Final Decking deadline. After frantic meetings through the weekend, the money chairs, apparently with some members of the hotel industry, reached a compromise involving a shorter GET extension and a lower TAT hike. Amendments were introduced on the chamber floors to implement the “agreement,” although another version with only a GET extension and no TAT increase, which Mayor Caldwell supported, was circulating in the Senate. The House passed one version and jettisoned its Speaker, while the Senate adopted the other version and deposed Chair Tokuda. With no agreement between the chambers, neither version can be enacted. That is where we are now. We now seem to have a bunch of rudderless ships in the harbor banging into each other. Could the Governor have brought both sides together? Was Senate President Kouchi capable of herding the 25 senators? And how about former Speaker Souki, new Speaker Saiki, or House money chair Luke? To what or whom should we be looking for leadership to get us out of this mess? WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers
To view the archives of the Tax Foundation of Hawaii's commentary click here. Weekly Commentary For the Week of June 18, 2017 Closing an Estate Tax Loophole? By Tom Yamachika, President One of the bills our legislature sent up to Gov. Ige to be signed, which is almost certain to become law because the Department of Taxation sponsored it, is one to close an estate tax “loophole.” The issue isn’t as simple as it might seem, however. First, some background. An estate tax is imposed when a person dies. The Federal Government imposes it when a decedent owned more than $5.45 million at death. The federal tax rate brackets start from 18% and go to 40%. Only fifteen U.S. states have an estate tax, and Hawaii is one of them. Our law generally conforms to federal law, but our tax rates go from 10% to 15.7%. (Six states impose an inheritance tax, which is similar except that the tax falls upon the heirs; of these, two states also have an estate tax.) For a person’s estate to have an estate tax liability, the estate is usually substantial, and may include assets in more than one place. For a person who doesn’t reside here, we tax assets that are located, or “sitused,” in Hawaii. For a person who does reside here, we tax all property in the federal taxable estate, but give credit for estate or inheritance taxes paid to other states. What happens if there is an entity, like a corporation or a LLC, that owns property? Because an entity doesn’t die, the estate tax isn’t imposed on the entity. But entities have owners. Corporations have stockholders, for example. So, the estate tax reaches the value of those ownership interests, such as corporate stock. So far, so good; an individual can’t beat the estate tax by throwing property into an entity. But an individual can use an entity to “situs shift.” Suppose the individual lives in Ohio and the entity owns valuable real property in Hawaii. The entity is not subject to Hawaii estate tax, and neither is the individual, because the shares of stock are generally sitused to the individual’s place of residence. Lo and behold, Ohio doesn’t have an estate tax, so this estate will not be taxed in any state! This is the loophole the bill addresses. The bill says that if the entity is a single member LLC that has not elected to be taxed as a corporation, then the estate owning the LLC will need to pay estate tax in Hawaii the same as if the decedent owned the Hawaii property directly. But wait. The bill doesn’t plug the loophole completely. In the situation just described, Hawaii estate tax can be avoided regardless of the type of entity, while the fix only works if the entity owning the Hawaii assets is a single member LLC disregarded for income tax purposes. Thus, if the entity is a partnership, a LLC with more than one owner, or a LLC that has opted to be taxed as a corporation (perhaps a S corporation), the fix doesn't apply and the loophole remains. Furthermore, how does the Department think it would be able to implement and enforce this law if it is enacted? The Department might be able to find out about a nonresident decedent who owned Hawaii property if there is a Hawaii ancillary probate, which would be needed to distribute Hawaii realty and other Hawaii assets, but how would it even find out about an LLC that owns Hawaii property and has a recently deceased owner? Even if the Department can keep an eye on all the Hawaii properties owned by LLCs, how could it watch their owners? In theory, LLCs that do business in Hawaii, wherever organized, need to register with the Department of Commerce and Consumer Affairs, but the registration form does not require the LLC to state who the owners are, just that a list of the owners will be kept on file at the company’s principal office. In all, this bill seems like a knee-jerk reaction to a perceived problem. If this situs-shifting anomaly is a loophole that needs closing, it’s very doubtful whether this bill will accomplish it. Well, we can see what happens.
WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers To view the archives of the Tax Foundation of Hawaii's commentary click here. Weekly Commentary For the Week of June 11, 2017 Reaching Back into the Past, Part 3 By Tom Yamachika, President On May 22, 2017, the Supreme Court of the United States denied review in seven cases involving retroactive tax legislation. In the Dot Foods case out of Washington which we have written about before, a company began business in Washington relying on a certain tax exemption, and asked the Department of Revenue to rule that the exemption applied. The DOR issued the ruling. A few years later, the DOR changed its mind, revoking the ruling and assessing the taxpayer. The taxpayer won its case in the court system, but the DOR came crying to the legislature and persuaded them to change the law retroactively for 27 years (!!) to prevent the massive and debilitating loss of revenue that it said would otherwise result. The other six cases originated in Michigan, where the legislature went back 6-1/2 years to change legislation regarding the division of income from multistate taxpayers among the states. The Michigan decision prompting the cases is named Gillette Commercial Operations North America v. Department of Treasury. A denial of review doesn't mean that the Court is approving the lower court decisions. The Supreme Court may just be saying, “your case is too boring” or “we're too busy.” “The Supreme Court is asked to consider 8,000 cases each year and chooses to hear between 70 and 80, so the odds are always tough. It doesn’t help that they seem to hate tax cases,” said Joseph Henchman of the national Tax Foundation. “As much as I wish retroactive tax laws went away, the states will be back,” he said. “I think Americans know these laws are unfair and wrong, and Tax Foundation is going to launch a new project to bring greater awareness to retroactive tax laws.” “Once again, the Court has shown no interest in this affront on the ‘rule of law’ and separation of powers,” said University of Connecticut Law School professor Richard Pomp. “[The] cases cried out to be heard. The denial of [review] dashes any hope in the short term that reliance interests of taxpayers will be respected and protected.” Pomp said that one famous legal scholar “went so far as to call a retroactive statute a ‘monstrosity,’ finding it a misuse of language even to apply the word ‘law’ to retroactive statutes.” There are cases when a retroactive fix to legislation may be justifiable. We also wrote about a retroactive fix to a 2011 amendment in our General Excise Tax Law, where the amendment took out two words that looked insignificant and were anything but. It seemed that the Department of Taxation and the taxpayer community went about their lives as if the two words were still there, so the fix didn’t seem to bother anyone. (Still, it was troublesome that the two words weren’t reinstated until four years later.) On the other hand, someone needs to cry foul when the taxpayer wins in a dispute against the revenue agency and the agency then goes to the legislature to get a retroactive fix to win the game it previously lost. Like the Washington DOR in Dot Foods, tax agencies could easily and often raise the specter of fiscal disaster if they are asked to – gasp – abide by their own statutes. We, as a people, pride ourselves that we follow the rule of law. Law is there to bind the government as well as the governed. If the government can change the rules after the game is over, then we don't have law, we have tyranny. Let’s not go down that path.  PRESS RELEASE-- FOR IMMEDIATE RELEASE
June 7, 2017 Lahaina, HI - WMTA ANNOUNCES SPECIAL SPEAKERS COMING TO PARTICIPATE IN EMERGENCY PREPAREDNESS West Maui Community Disaster Planning Meetings Scheduled for Thursday, June 15, 2017 at Lahaina Civic Center Amphitheater at 5:30 p.m. Guest speakers will be Michele Liberty, Maui County Director & Disaster Program Director of the U.S. Red Cross Hawaii State Chapter presenting on the topic “Emergency Sheltering in Maui”; and Charnan Carroll, Disaster Preparedness Specialist of the Maui County Emergency Management Agency, presenting on the topic “Personal Preparedness Planning”. The WMTA is working with the Maui Emergency Management Agency, The Pacific Disaster Center, and the State Emergency Management Agency on developing a customized disaster plan designed to meet West Maui’s specific needs. The isolation from the Island’s major hospital and airport, due to frequent road closures, fires and flooding, have highlighted the need for special preparedness planning. The Hawaiian Hazards and Resilience Program (HHARP) is a series of monthly workshops, presented by subject-matter experts, to provide education for hazard understanding and offer tools and information resources to guide community mitigation, preparedness, response and recovery planning. The current meeting schedule follows:
These meetings are free and open to the public. There is ample parking for Lahaina Amphitheatre is on lot by District Courthouse adjacent to Entry Gate. The West Maui Taxpayers Association invites you to join us and be a part of the solution to plans that may well be the reason why lives will be saved when disasters strike. Please put these meetings on your calendar and plan to attend! More Information on WMTA and Disaster Preparedness can be found at www.westmaui.org. WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers To view the archives of the Tax Foundation of Hawaii's commentary click here. Weekly Commentary
For the Week of May 28, 2017 Human Casualties at the Legislature By Tom Yamachika, President Our legislature this year has had several casualties. We expect quite a few bills to be tossed aside during the legislative process. However, in recent years we have had more than the average number of human casualties, the most recent being Speaker of the House Joe Souki and Senate Ways and Means Chair Jill Tokuda. The casualties in this legislature were not limited to those two. Rep. Beth Fukumoto used to be the House Minority Leader, which made her the ranking Republican in our legislature (our Senate has no Republican members this year). She was deposed and replaced on February 1st. Rep. Angus McKelvey from Maui was chair of the influential House Committee on Consumer Protection and Commerce, but was shown the door on March 13th in a three-way switcheroo of House committee chairs. Significant shake-ups occurred in the Senate two years earlier. Senate President Donna Kim was given the boot on May 5, 2015, the last day of the 2015 session. Four days earlier, Senate Health Committee Chair Josh Green was stripped of his chairmanship in the thick of conference committee negotiations over the medical marijuana bill. These politicians are still alive and well, and they all still hold seats in the current legislature. But it can't be a pleasant experience having a Trump-type "You're fired" resolution with your name on it being discussed and voted on in a large Capitol auditorium with the outcome predetermined. The question I have is this. If there is a position taken by a committee chair on one bill or one issue that is not reflecting the wishes of the committee, why can't the committee simply reject the chair's recommendation and take the position they need to? Or why can't the body come up with a different position in a floor vote, which is not at all uncommon and was in fact done this year (leading to the second Senate conference draft on the rail bill SB 1183)? The legislative system is set up so we don't need to expect the chair to be right 100% of the time. In these instances, all of the legislative leaders worked really hard, were familiar with the issues, and came to a reasoned judgment. Everyone went along with the chair 98% of the time. In Chair Tokuda's case, for example, the "unreasonable" position of giving the City no surcharge extension was in Senate Draft 2, which was approved by her committee 8-0 and by the full Senate 25-0. Senate members who want to express concerns or displeasure have the option to vote “Aye with reservations” as well as “No,” but no one did either. And then, of course, literally hundreds of other bills passed through her committee with no visible indication of dissent. To be fair, we can't see what went on in the back rooms, where the committee chairs can quietly kill bills by refusing to schedule a hearing or vote on them. If a committee chair is abusing power or acting despotically, stripping away the position may be appropriate; barring that, the strong committee chair system is designed to give chairs a great deal of discretion, and when that discretion is used to someone’s disadvantage both the system and the person using it bear responsibility. In most places, if you get it right 98% of the time you won't get a pink slip. In our legislature, you can get the ax. It's hard to imagine a more thankless job. Except, maybe, being on the board of directors of a condominium association. If we want talented people serving us in the halls of our legislature, we can’t get in the habit of switching them around like the Flavor of the Month. We need to figure out a way to treat them with dignity. WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers
To view the archives of the Tax Foundation of Hawaii's commentary click here. Weekly Commentary For the Week of May 21, 2017 A Raid by Any Other Name... By Tom Yamachika, President We have written before about GEMS (Green Energy Market Securitization), a program adopted by our state government in 2013. The state wanted to facilitate the buildout of “clean energy infrastructure,” a necessary step to reaching its clean energy goals. GEMS was supposed to be a financing program that provides low-cost capital to finance solar photovoltaic systems and other clean energy improvements for those who may otherwise have difficulty obtaining financing for these projects. Low-credit homeowners and renters, as well as nonprofits, are among those who qualify for project financing through GEMS. The “securitization” part refers to how the State was going to get the money to loan out, by borrowing $150 million on the bond market. That debt would be repaid, with interest, by the “Green Energy Infrastructure Fee” which is paid by everyone who gets an electric bill. For residential customers, the fee is around $1.50 per month. It is determined by the Public Utilities Commission (PUC), and the fee amount changes every six months or so. Commercial customers, of course, pay more. According to a report prepared by DBEDT at the end of 2016, principal and interest on the bonds is approximately $13.4 million per year. Of the $150 million borrowed on the bond market, the cash deployed at the end of March 2017, according to GEMS’ most recent quarterly report, was $2.8 million, meaning that less than 2% of the cash the State borrowed has been deployed. There are also staggering administrative costs, $2.2 million since program inception, that were necessary to set up the program and maintain it to date. GEMS, as a program, has been a miserable failure, resulting primarily in a large wad of cash that is just sitting in the bank. That’s why our legislature got the bright idea to “use” it to prop up another miserable failure – the “Cool the Schools” initiative. Under the latter initiative, our legislature appropriated $100 million in 2015 for heat abatement measures to help kids in our sweltering public schools. But between normal procurement efficiency (or lack thereof) and a myriad of special requirements that were tacked on to the bill authorizing the program, contractors were bidding more than $80,000 per classroom. With 7,000 classrooms in need of heat abatement improvements, the $100 million didn’t go very far to solve the problem. So this year our legislature passed a bill, HB 957, authorizing the DOE to borrow $46.4 million from the GEMS program at an interest rate of Z-E-R-O. Because there are real costs to borrowing money, including the debt service that is now being paid on the $150 million in bonds, it is obvious that the bill forces the GEMS program, and its stakeholders the utility rate payers, to subsidize the DOE. This raises constitutional issues because it is taking a public expense and making it fall exclusively upon utility rate payers, who derive no special benefit from having cooler classrooms. There may not even be a need to pass the bill. The PUC has already authorized the DOE to borrow up to $60 million for energy efficiency and heat abatement projects in PUC Order 34421. The interest rate approved by the PUC was a fixed rate of 3.50% -- probably better than any loan obtainable commercially, but still arguably fair to GEMS and the utility rate payers. This is just one of several bills now awaiting action from the fifth floor of the Capitol. We’ll be writing about more of them in the weeks ahead. Mahalo, The Maui News for covering this important event in West Maui. Read the article by clicking here copying the link below into your web browser.
http://www.mauinews.com/news/local-news/2017/05/above-average-hurricane-season-forecast/ --- The Hawaiian Hazards and Resilience Program (HHARP) is a series of monthly workshops, presented by subject-matter experts, to provide education for hazard understanding and offer tools and information resources to guide community mitigation, preparedness, response and recovery planning. The next meeting is June 15, 2017. These meetings are free and open to the public. More Information on WMTA and Disaster Preparedness can be found at www.westmaui.org. Click here to read the Press Release posted in Lahaina News Lahaina News
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