The September 11th attack
Lawmakers offer recycled ideas
By Kevin Dayton and Lynda Arakawa
Advertiser Capitol Bureau
Knowing that the Sept. 11 terrorist attacks demanded quick and decisive action, some of Hawai'i's politicians saw opportunity.
For better or for ill, a lot of old and sometimes failed ideas resurfaced at the State Capitol. Some gained new political momentum from the state's economic crisis.
Some lawmakers argued that a perennial proposal to give local contractors an advantage when bidding on state construction jobs is justified in the wake of the terrorist attacks.
Others made the same pitch in favor of construction of the University of Hawai'i's West O'ahu campus, a larger tax break for hotels that do renovations, and a capital gains tax cut.
If those ideas sound familiar, it's because each has been kicking around the State Capitol for years. Lawmakers had rejected or deferred all of them, but reconsidered and adopted some in the special session that ended Friday.
Gambling is another old idea that has been quietly raised as a quick-fix solution. Some lawmakers suggested in closed-door Democratic caucuses that gambling — something likely to be a major issue in the Legislature's regular session next year — would go a long way toward solving the state's economic problems, according to House Speaker Calvin Say.
This recycling of old ideas isn't necessarily opportunism, some observers said. Lawmakers may be offering new reasons for adopting old concepts, but that is part of the normal flow of legislation, they said.
Former lawmaker Jim Shon said typically it takes a few years for ideas at the Legislature to become law. But he said a crisis often pushes people to do things they resisted in the past.
"I think there are a lot of sincere politicians that are really trying to solve the problem and they don't really know what to do but 'Okay, let's try it. We didn't have to risk trying it before,'" Shon said. "Maybe they always thought that maybe it might work, but now (they think) 'What have we got to lose?'
"When you're in a what-have-we-got-to-lose mode you'll try things you wouldn't have tried before," he said.
Senate Majority co-leader Cal Kawamoto, D-19th (Waipahu, Pearl City), said he had been trying for four or five years to pass a bill giving local contractors who use mostly local employees a preferred status in the awarding of government contracts. He said it was common sense for the Legislature to approve such legislation, but acknowledged that the economic crisis made it easier to convince his colleagues to agree to it.
"They realize that if we're going to go in debt or we're going to do a lot of construction work, the main purpose is for our economy, not the economy of California or Texas or Washington or wherever these people come from," Kawamoto said. "They realize that we gotta give the local contractors jobs. ... That's our people's money. Our people should get it."
Republican lawmakers also tried to revive such old proposals as eliminating the excise tax on food. Democrats scrapped the idea because they believe it would cost the state too much in lost tax collections.
But if the bills passed weren't new or flashy, some would argue they were at least adequate.
State economist Pearl Imada Iboshi said the lawmakers' main economic tasks were to stabilize the visitor arrivals and prop up the construction industry. They helped in those areas by approving another $10 million for tourism marketing, and relaxing the state procurement code so contracts for construction work could be awarded more quickly.
"So much of our economy is very externally driven, so how well the U.S. economy does, how well the Japanese economy does, how well the yen does makes a huge difference," she said.
The most important thing the state can do to help is reduce barriers to doing business, and keep tax rates low, she said.
Say, D-18th (Palolo, St. Louis, Kaimuki), made a similar point when he urged his colleagues in the closing minutes of the special session Friday night to be honest with their constituents about what the Legislature can accomplish.
Lawmakers should "realize it is honorable to be realistic, because not every bold idea is good, and not every good idea is bold, and for all of you, you have the wisdom to know the difference," he said.
To be sure, a couple of the proposals lawmakers adopted last week looked like fresh ideas. Lawmakers set aside $1.5 million for an Emergency Environmental Workforce so the state could hire laid off workers to fight dengue fever and eradicate invasive non-native species.
A bill to offer tax credits to homeowners to encourage them to build or renovate is also new, although similar credits have been offered to the hotel and timeshare industries for years.
But most of the ideas were pretty well worn.
Gov. Ben Cayetano again pitched his plan to reduce the capital gains tax, a suggestion that failed to pass in 1999 when he offered it up then. Cayetano quickly withdrew the proposal last month, saying it also would be too expensive.
Lawmakers have also quarreled for years over an income tax credit to encourage hotel construction, with some arguing the state should increase the current 4 percent credit.
Lawmakers approved a bill to do just that last week, boosting the credit to 10 percent because they said it would encourage private construction.
Even Cayetano's plan to spend $1 billion on state construction projects to prime the economy wasn't new. Cayetano made the same proposal in 1997, and Say joked last month that Cayetano will be remembered as the only governor who twice asked for permission to borrow and spend $1 billion on new construction.
Lawmakers approved Cayetano's 1997 request but cut back sharply on this year's request, authorizing only another $100 million in construction spending in the special session that ended Friday.
Reach Kevin Dayton or Lynda Arakawa at 525-8070 or kdayton@honoluluadvertiser.com or larakawa@honoluluadvertiser.com.
