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Risk Taking Not Part Of Government Lexicon

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By Lowell L. Kalapa

How often we hear people speak about having to deal with the public bureaucracy no matter what level of government, be it federal, state or local government. People bemoan the sluggish pace at which government operates, of how long it takes to get a permit or for that matter to build a school or repair a sidewalk.

Unfortunately, one of the major reasons behind the slowness at which government moves is that no one in government wants to do something out of the ordinary, doing something that has never been done before. Public workers know exactly how a job is done and they get paid for doing that job. It doesn’t matter that there might be a better way of doing things or a faster way of achieving the same outcome. This is the way the job has been done and nothing is going to change that.

For those who don’t work in the public sector, they find this protocol curious as the reward in the private sector is for a job that is done better or more efficiently. The difference between the public and private sector is that workers are encouraged to take risks and risks that are successful are rewarded. Rather than shying away from risk, private workers view the challenge to do their job better and faster as the basis for reward. A better job done more efficiently usually results in a promotion or an increase in compensation.

In the public sector, there is no mechanism to reward excellent work. Public workers are parceled into job descriptions and salary steps. Their compensation is dictated by what is won at the bargaining table. There is no recognition, perhaps, other than a piece of paper and a koa bowl for the excellence of their work. Governed by a civil service system that outlines the rights and duties of the public employee and casts them into 13 collective bargaining units, it does not come as a surprise that there is little motivation to do a task more efficiently or better.

What is disturbing is that lack of willingness to take risks carries over to non civil service positions in the public sector. When policy makers and administrators, who are not governed by the rubric of civil service and collective bargaining also seem timid to take risks, that is disturbing.

Take, for example, the legislative attempt to address the lack of affordable housing in Hawaii. Lawmakers ruffled their feathers and beat loudly on their chests and crowed that they have taken creative steps toward addressing this ominous issue. But upon closer examination, nearly all of the initiatives put forth in the affordable housing legislation approved this year involve government. They included more public funds for affordable housing and rewards and incentives for developers of “affordable housing.”

Nothing in the legislation acknowledges the role of the private developer. In fact, the measure takes aim at anyone who purchases residential property other than for their own use as an owner-occupant with a higher conveyance tax rate. Where do legislators believe the current stock of rental housing takes its genesis? Do they really believe that the current inventory of rental housing just fell out of the sky?

It seems that lawmakers do not recognize that some investor took the risk to build the three and four-story walk-ups that now provide shelter to countless renters. It could have been a Mr. Lee or a Mrs. Yamamoto that took the risk, borrowed some money and built the twelve-unit apartment building in Moiliili or Waipahu or Wailuku or Lihue. Perhaps now that they want to retire or they have passed on, the building is being sold to another investor. That, lawmakers say with this bill, should be punished with a higher conveyance tax rate. And what about the individual who decided to purchase a single apartment as an investment or perhaps as a tax shelter? That apartment now provides rental housing for one more family, yet under the new conveyance tax scheme, the investor will be punished.

Instead of looking at what is preventing the inventory of available housing from being expanded, lawmakers resorted to tried and true tricks like spending more money by raiding the Rainy Day Fund, expanding tax credits for affordable housing developers and extending fast track permitting approval for affordable housing. Note well that they did not streamline the permitting process for any other housing development. What about the people who secured affordable homes a few years ago? Might they be ready to move up to something else? Will they have nowhere to move because there will be no new inventory other than that for affordable housing? Gee, perhaps we need lawmakers who might want to take a risk and do something outside the box.

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