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Yearning for a Special Session

posted in: Weekly Commentary 0
By Lowell L. Kalapa

It seems the state administration and lawmakers have painted themselves into a corner in calling for a special session of the state legislature.
Now that the call has been issued in the heat of the crisis following the September tragedies, there is no backing out. On the other hand, it appears that some lawmakers have come to realize that perhaps there is little that the legislature can do that couldn’t otherwise wait until the next regular session. Indeed, some have stopped to ask just what outcomes will be realized as a result of legislative action.
Probably the most controversial proposal that lawmakers will be handed is an increase in spending on state construction projects. Reports peg that additional amount of spending on state capital improvements between $500 million and $1 billion. The idea is being promoted on the rationale that the construction industry has one of the greatest “trickle down” effects after tourism, that is, construction spending reaches other sectors of the economy more quickly than other types of spending.
The problem with that idea is that lawmakers, at the behest of the administration, approved more than a billion dollars in capital improvement projects as recently as 1998. Back then critics pointed out that it would take a minimum of two to three years for that money to make its way into the economy. And time has proven those critics right. Only now is that money being let out in contracts for public projects.
And just this past session lawmakers approved another $697 million in general obligation bonds. This is in addition to more than $300 million in revenue bonds for other state capital improvement projects. So what’s the rush to approve even more in debt when there are hundreds of millions of dollars worth of projects already sitting on the books.
Rather than authorizing more projects, the state administration should find ways to accelerate the system so that the funds are processed more efficiently and on a more timely basis. If it has taken three years to process the last “billion dollar” CIP effort, imagine how long it will take this economic stimulus of new state construction projects to reach the street!
The real question here is what can state government do to stimulate the economy. Well, if one accepts the fact that the visitor industry is responsible for the cash flow of the state, then efforts need to be made to attract those missing visitors back to the islands.
Although some will argue that the legislature is needed to authorize additional funding for visitor promotion, it is not like the Hawaii Tourism Authority (HTA) doesn’t have the money to spend. In fact, the HTA was authorized to spend $61 million for the current fiscal year. With only three months into the current fiscal year, there is no way that the HTA has already spent all $61 million. The Authority could shift its spending around and redirect money they already have to address the current crisis.
Lawmakers argue that they need a special session to authorize an extension of unemployment benefits for another 13 weeks so that idled workers can collect up to 26 weeks of benefits should the job situation not improve. But hey, there are already provisions on the books that will trigger additional benefits if certain thresholds are reached. Meanwhile, Congress is constructing its own game plan to aid unemployed workers. Given the fact that any action taken by Congress will supersede what states do, it would seem prudent to take a wait and see position for the time being on the issue of unemployment benefits.
So why do lawmakers and the state administration think that we need a special session of the legislature? Have all the hype and hysteria created the public perception that elected officials need to “do something?” Apparently so, but now that there is public pressure for lawmakers to “do something,” they don’t seem to know what to do.
If these elected officials would just sit down and think this through, what they will find is that there is very little that they can do to turn on the visitor industry spigot. Instead, it will take some creative strategies in marketing and promotion as well as the cooperation of the airlines to provide the seats for those visitors.
Rather than rushing to adopt ill-conceived game plans, it might be better if lawmakers do some homework and learn what makes Hawaii’s economic clock tick.

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