Another Rainy Day Slush Fund
 
Many of us in Hawaii are aware that we have an Emergency and Budget Reserve Fund, enshrined in chapter 328L, Hawaii Revised Statutes, to save money for a “rainy day,” that is to say, an emergency.  In the most recent legislative session, the state budget bill provides for an additional one billion dollars to be socked away into that fund, $500 million a year.

But, as it turns out, that’s not the only “reserve fund” we have.

As the Department of Budget and Finance kindly explains on its website, we have the Hawaii Hurricane Relief Fund (HHRF).  This fund was set up in 1993 to provide hurricane insurance coverage for property owners here in Hawaii Nei in case the private insurance market proved unreliable.  This was thought to be a good idea when Hurricane Iniki whacked us in 1992.

In the years since Iniki, however, private insurers returned to the market.  The HHRF shut down in 2002.  Section 431P-16(i), HRS, contemplates that when the HHRF dissolves, any net moneys remaining in the fund, after the payment of debts and other obligations, will go back to the State general fund.

Did that happen?  No.

Instead of dissolving the HHRF when it was clear that it was no longer needed, State officials decided to keep the money – just in case.  The Department of Budget and Finance says that there is now $186.7 million left in the fund.

A little more than ten years ago, lawmakers did in fact tap into the fund.  After the State’s budget took some hits from the Great Recession of 2008, laws passed in 2010 and 2011 appropriated millions of dollars from the HHRF to restore public school instructional days when our government found it necessary to furlough state workers to make ends meet.  (Do you remember “Furlough Fridays”?)  The law also allowed the Governor to tap into the HHRF fund to maintain program levels for essential government services, but required general excise tax revenues to be diverted in fiscal years 2014 and 2015 in order to pay back the fund.

As a result, we now have $186.7 million in this “just in case” fund that not too many people know about.
Our state government is taxing us, the taxpayers, at a very high rate to obtain money that just sits around doing nothing.  Not only are we failing to pull down federal moneys that have been made available for us, as we have written about on several occasions before, but we are squirreling away tens or hundreds of millions of dollars to gather dust in some bank somewhere, rather than putting the money to use fulfilling basic needs.  Obviously, our lawmakers were aware of this secret fund, as they used the money in 2010-11.  I wonder if our lawmakers today know about this as well.  If they do, why don’t they demand that the HHRF be dissolved with the balance of the fund transferred to the general fund, as the law requires?  Certainly, there is a need for some money to be kept aside just in case, but we already have a rainy day fund for just that purpose.  We fed $500 million to that fund last year and are on track to stuff it with another billion dollars this and next year.

Let’s make it easier for everyone.  If we are going to put money aside just in case, let’s have it in one place, the official Emergency and Budget Reserve Fund.  That way everyone knows where it is, why it is there, and how much is set aside.  No hoarding cash away in slush funds!

Ding Dong, the Green Fee is Dead
 by Tom Yamachika |  posted in: Weekly Commentary |  0
Environmentalists are bemoaning the apparent demise of the “Visitor Green Fee,” a $50 charge that would need to be paid by whoever, as a nonresident, wants to visit parks, beaches, scenic sites, and other places of natural beauty.  Most of the population, they say, supports such a charge if it is going to be used to support those parks, beaches, and other scenic sites.  (Especially if tourists, namely folks other than the population asked, are going to pay that charge.)

The bill containing the fee proposal, Senate Bill 304, did not survive the conference committee process.  Interestingly, the bill passed third reading in the House on April 6, went over to the Senate from which it started, and the Senate disagreed to the House amendments on April 11.  It wasn’t until April 19 that Senate conferees were appointed, and it took an additional week, until April 26, that the House appointed conferees.  Those two weeks of dithering over conferees apparently took their toll, because the deadline for conference reports was a mere two days later, April 28.  The conferees hurriedly noticed a conference committee meeting for the morning of April 28, and then noticed a reconvening of the meeting on April 28th at 5 PM.  Under that kind of time pressure it would be tough to come up with a conference agreement that both sides would be happy with.  Not surprisingly, they didn’t.  Proponents of the bill get to try again next year.
Why did the bill go down in flames if, as its proponents have said, everyone supported it?  As with many proposals, the devil was in the details.  Unlike non-U.S. locales like Palau and the Galapagos Islands that can and do impose entry or exit fees at the airport, the power of our state to slap fees on people is limited by the U.S. Constitution, and we can’t simply do the same thing that those other countries are doing.  Lawmakers came up with some elaborate constructs to get around this issue – the $50 will be charged for an “annual license” to see our natural attractions, for example –but how would it ever be enforced?  Would state scuba divers suddenly surface beside unsuspecting swimmers, demand to see their $50 payment or a driver’s license, and haul them off to the hoosegow when they can produce neither on the spot?  Or would uniformed officers on horseback gallop up to a tent of beachside partygoers and line them up, all with smartphones in hand, to see who paid their fifty bucks and got the “I’m licensed, are you?” QR code?
And, if the real problem is that not enough money is being spent to maintain our land and natural resources, isn’t the solution at the budgeting table whether or not there is a “dedicated” or “targeted” revenue stream that this bill is supposed to provide?  After all, even if lawmakers say that green fee revenue can only be used for natural resource conservation, there is nothing to stop those at the budgeting table from “repurposing” general fund money that otherwise would have gone to conservation.
For that matter, there is nothing to make the agencies that are given our precious tax dollars spend the money as opposed to letting it pile up unused (compare, for example, what happens with TANF funding, as we recently reported).
Thus, at the end of the day, even if the bill passed and we started milking our tourists even more, would we really be able to pull down the revenue that this bill promises?  And how do we know whether that revenue, even if it materializes, will in fact support needed conservation efforts as opposed to either gathering dust in a bank somewhere or being squandered on something entirely unrelated?
Green fee supporters and lawmakers, you certainly can try again next year.  But I suggest that you give some thought to the issues we are discussing here to make sure that your hard-earned funding goes where it is supposed to.

Source from: The Maui News paper / September 24-25, 2022 / pages A8 - A9