Posted on: Friday, May 3, 2002
The 2002 Legislature
Consumer bills gain passage
• Assisted suicide bill rejected
• Legislative scorecard
By Kevin Dayton
Advertiser Capitol Bureau Chief
Before long, you may fill your car with state-regulated gas, pay a 5-cent deposit on a can of soda and $1.40 in tax on that pack of cigarettes, and get a check-up covered by state-regulated health insurance.
You may also buy your prescription drugs at a discount through a new state-run purchasing program for medicine. But you won't get a speeding ticket from any roadside photo-enforcement cameras.
Those small but significant changes in your everyday life are the work of the 2002 Legislature, which was gaveled to a close yesterday after pushing through many bills that are obvious attempts to appeal to average Hawai'i consumers in an election year.
In recent years, the Legislature's would-be consumer advocates often collided with entrenched special interests in the hearing rooms of the State Capitol and seemed to accomplish little.
This year, the Legislature brushed off the objections of huge national and international corporations and major local businesses to push gasoline-price caps, a bottle bill, discount prescription-drug pricing and new regulations on health insurance rates.
Gov. Ben Cayetano yesterday gave the Legislature an "A-minus" for its efforts this year, and Democrats in the Legislature said consumers will reap the benefits of additional state regulation of what they call "virtual monopolies."
Some Republicans and industry critics countered that most of the consumer bills that passed are blatantly political attempts to win favor with the voters and predicted most or all will fail or make things worse for consumers.
The public won't know the truth for some time, because it will be years before some of the measures take full effect. Bottles can't be cashed in for a nickel deposit until 2005, while the gas-price caps and a program to have the state negotiate prescription drug discounts both take effect in 2004.
The long delays in the effective dates in the gasoline-price cap were negotiated as a compromise to get the bill through the Legislature, meaning gasoline wholesalers and retailers will certainly press lawmakers in the years to come to repeal or rewrite the bill to make it more to their liking.
Other industry lobbyists will certainly press for changes in a number of the other bills, which means the new governor and future lawmakers will find the same issues on their desks starting next year.
It is also possible consumers will never see an impact from some bills that passed this year. Lawsuits are possible over the prescription drug bills, and are almost guaranteed over the gasoline-price caps.
But as lawmakers left the Capitol yesterday, they had a number of crowd-pleasing bills in their briefcases to carry back to their constituents to prepare for the campaigns this summer and fall.
Listening to consumers
Perhaps the first attempt to appeal to consumers this year was the measure to repeal the state's photo enforcement program, an astonishingly unpopular attempt to use high-tech cameras to cite motorists and force them to slow down.
Cayetano finally scrapped the program last month after the House and Senate responded to an outpouring of public complaints, and voted to repeal it. The private operator of the cameras is seeking $2 million to $4 million in compensation for the termination of its contract with the state.
The only measure to attract anything close to the attention focused on the traffic cameras was the plan to cap gasoline prices. That bill also gained its momentum from public complaints, in this case because of the settlement of the state's anti-trust lawsuit with the oil companies for $20 million.
Cayetano, who was disappointed with the settlement, said he supported price caps. House lawmakers responded with a bill, and Attorney General Earl Anzai weighed in with his own proposal. After initially saying the issue needed more study, Senate Commerce, Consumer Protection & House Committee Chairman Ron Menor agreed to a bill to cap retail and wholesale prices.
The bill, which won final approval in the House and Senate yesterday, would allow the state Public Utilities Commission to set maximum wholesale and retail prices based on West Coast prices. Allowances would be built to compensate oil companies and retailers for transportation, marketing and other costs, and higher prices would be allowed on the Neighbor Islands than on O'ahu.
The measure was strongly opposed by gasoline wholesalers and retailers, but it seems to be a winner with consumers.
"It's good for the people," said Kevin O'Connor, 38, a Nu'uanu automotive technician. "The government has to step in and control what the private sector can't do. You and I know there's fixing going on. It's capitalism run amok. I think it's (so) bad that the government has to step in."
Others want price relief right now and are worried the time delay built into the bill may derail the whole effort.
"I think it's a good bill that should be happening now," said Bill Unruh, 35.
"Because it's being put off, it's never going to happen. I feel sad for the politicians who can't act now. The prices are still high and they (gas companies) still can make 40 cents a gallon."
Health insurance rates
Lawmakers also went after health insurance rates, another situation where they believed a near-monopoly exists in Hawai'i.
House Bill 1761, which won final approval Tuesday, would give the state insurance commissioner authority to review proposed health insurance rates and reject them if they are deemed to be too high, too low or unfairly discriminatory.
If Cayetano signs the bill as expected, rate regulation of HMSA, Kaiser Permanente and other health insurers would begin next year.
That idea also seems to have the support of many consumers, including Manoa housewife Janet Haworth.
"Anything they want to do to regulate health insurance is fine with me," she said. "Regulate it all you want. It's so out of whack right now, hopefully someone will oversee it."
Also scheduled to begin next year is a program to provide the same prescription drug discounts for lower-income consumers as those granted to the Medicaid program. And in another effort to help consumers to purchase affordable prescription drugs, lawmakers approved the "Hawai'i Rx" program to allow the state to negotiate with the pharmaceutical companies for discounts.
Deposit on containers
A top issue for environmentalists at the Legislature this year was the bottle bill, which would impose a nickel deposit on most cans, bottles and plastic beverage containers. It would also impose another 2-cent non-refundable charge at the wholesale level to be used to subsidize recycling.
Representatives of the grocery and beverage industries argued the bill would do little to stop littering, and would divert less than 2 percent of the state's rubbish away from landfills.
Alan Nii, a Kaimuki retail sales worker, agreed. "I don't think it's going to affect recycling," he said. "It's going to look like another tax. I don't think a normal person will go out of their way to get a nickel back."
Others are more enthusiastic, such as Peter Meredith, a 45-year-old Makiki, furniture and cabinet finisher. "People are going to see there's money hiding in the bushes," he said. "It will give people more incentive to recycle. If they don't care, then the money will go to the state."
Balancing the budget
While increasing the cigarette tax in an election year might not seem like a political masterstroke, the majority Democrats believed it was a necessary step to balance the budget.
The voters are generally more accepting of "sin taxes" on alcohol and tobacco, and the ruling Democrats at the Legislature believed they needed the $16 million a year the state will collect by boosting the tobacco tax from $1 a pack to $1.40.
Republicans at the Legislature mobilized to fight Cayetano's controversial proposal to empty the Hawai'i Hurricane Relief Fund of $213 million, and the Democrats finally opted to take only $29 million from the fund.
To make the transfer more politically palatable, the Democrats announced the $29 million is only interest earned by the hurricane fund, meaning lawmakers did not touch the principal in the fund that was collected from the public through insurance premiums and mortgage recording fees.
Lawmakers also increased the fee for marriage licenses from $50 to $60, and imposed a new $4.50 per passenger charge on international and Mainland airline passengers to cover the cost of additional security measures at state airports.
Advertiser reporter Brandon Masuoka contributed to this report. Reach Kevin Dayton at kdayton@honoluluadvertiser.com or 525-8070.
