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The Honolulu Advertiser
Posted on: Wednesday, February 13, 2002

House rejects refund of hurricane money

By Lynda Arakawa
Advertiser Capitol Bureau

Gov. Ben Cayetano called the House Republicans' attempt yesterday to return money from the Hawai'i Hurricane Relief Fund to homeowners "one of the most irresponsible and politically charged acts that I have witnessed in the many years I have served in public office."

In what will likely become a 2002 election issue, House Democrats yesterday voted 27-17 to reject a bill that would return money from the Hawai'i Hurricane Relief Fund to residents who paid into it. The Republicans also failed to pass an amendment they said would fix flaws in the bill.

Cayetano, who wants to take money from the fund to help balance the state budget, called the House Republicans' move "politics as usual."

"They know that the majority will not in good conscience go along with it and it's unfortunate but it seems like every move that they (House Republicans) make down there is governed by politics," he said.

The fund, which has a surplus of about $213 million, was created to provide insurance coverage for Hawai'i residents, but is inactive as private insurers have resumed offering hurricane coverage. The governor's office said premiums paid by homeowners were not enough to cover the cost of the insurance. The $49 million shortfall was made up from other sources, so returning the money would mean all taxpayers would be subsidizing the former policyholders, Cayetano said.

House Minority Floor Leader Charles Djou, R-47th (Kahalu'u, Kane'ohe), dismissed charges of political posturing.

"I think the governor might think that it's a cynical, political move," he said, "but we sincerely believe that this money doesn't belong to us, it doesn't belong to the Legislature, it belongs to the people, it should be returned to the people and it has the collateral benefit to stimulate the economy."

Rep. Colleen Meyer, R-46th (La'ie, Waiahole), said: "These monies were not paid into the fund to balance the budget."

The House GOP said the money should be returned to former policyholders or at least remain in the fund for the next hurricane. But some Democrats said that while returning the money is a nice idea, it would be extremely difficult and costly to determine who is entitled to a refund. Democrats also noted the House Finance Committee is already considering various bills addressing the Hurricane Relief Fund.

Rep. Jerry Chang, D-2nd (S. Hilo), said the trust fund needs to stay intact in case of another hurricane. Chang, who was among those who introduced the original bill to return money to homeowners, said while he had felt this was the right thing to do, he discovered the administrative costs in doing so would be a "nightmare."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or 525-8070.