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The Honolulu Advertiser
Posted on: Thursday, October 18, 2001

Island Voices
Use hurricane fund wisely

By Gerald Peters
President, Hurricane Protection Systems

In the rush to get in and out of the special session, "big time" evidently is in and "small time" is out if initial Cayetano administration proposals to tap the $213 million Hawai'i Hurricane Relief Fund reserve are rubber-stamped by lawmakers.

Homeowners and small businesses both stand to lose under a plan evidently threatening failsafe stand-by insurance protection as well as ignoring long-planned related rebates, which would directly help the economic crisis by creating many small-business jobs to protect properties. Key points:

• Hawai'i still needs to get ready for storms and insurance crises — plus, now, the $30 billion-plus insurance losses from Sept. 11, which are said to soon affect hurricane coverage worldwide.

• Forty-five percent of $600 million in "contributions" to the fund did not involve policies written even if the state could lay claim to the other 55 percent of the fund by saying these folks already got what they paid for.

• Tellingly, an unarguably sensible hazard mitigation "matching rebate" plan has been pushed aside in favor of big-time-only construction.

Matching grants for hazard mitigation improvements like hurricane clips, upgraded reroofing and storm shutters would create about 200 small-business jobs, significant "multiplier effect" economic activity, help control availability and cost of hurricane insurance in the long term, and give some of the relief fund money back to contributors.

Despite years of development, expense and legislative approval, this pay-for-itself program, which addresses the crisis as well or better than any other proposal, was overlooked. That has some informed, assertive majority leaders like Senate Ways and Means Chairman Brian Taniguchi asking, why leave it out?

Big construction funding alone is not necessarily better than allocating the relatively small amounts necessary to stimulate many thousands of individual homeowner retrofit projects.

Big construction mostly rewards the same big contractors, not thousands of homeowners and dozens of small firms, at the same time on all islands. Big public projects have big yearly fixed costs. Not matching grants. As Hawai'i's homeowners choose to use them, everyone wins. For those who don't match, it costs the state nothing, and money stays put — it's safe, contingent funding.

Based on the October 2001 draft version of the hazard mitigation study final report, our construction industry group believes the recommended three-year pilot program funding could help about 30,000 households and create between 140 and 225 new jobs and up to $20 million yearly in new economic activity, including new tax revenues. Fully subscribed, it means $60 million in activity at less than half that cost net to the state plus long-term risk-reduction benefits.

At any level of funding, the program's cost-benefit productivity beats other spending or investment alternatives hands down, according to the study.

The governor's veto message on a 2001 regular session bipartisan matching grants bill called for wider availability (for all homeowners), completion of the study, and other technical details, which have been earnestly addressed since his veto. There are no more reasons to delay action and every reason to proceed.

The time is right for lawmakers to stand up for this. It may be too late to wait until the 2002 or 2003 regular sessions or get hit by the next hurricane and then try to do something after the fact with the monies possibly gone.

Senate and House leaders and the insurance commissioner understand the relief fund issues quite well, and support hazard mitigation. Now they must decide if they want to find a way to convince the governor that the special session should not allow the doors to slam shut on homeowners and small businesses.