Bill to transfer special fund will hurt public, agency says
By Gordon Y.K. Pang
Advertiser Capitol Bureau
The Lingle administration is denouncing a plan by lawmakers to dismantle a special fund created to make the Department of Commerce and Consumer Affairs self-sufficient, and instead placing the agency's finances within the state's general fund.
DCCA Director Mark Recktenwald, during a meeting with The Advertiser's editorial board yesterday, said the move is being done strictly to raid the Compliance Resolution Fund of its $32 million balance and predicts that the change will lead to poorer service in a department whose customers are generally happy.
Senate Ways and Means Chairman Brian Taniguchi, D-10th (Manoa, McCully), while acknowledging a major motivation for the move is the desire to use the fund's excess to help balance the state budget, said he does not think DCCA or its customers will suffer because of the change.
The department's basic function is to handle business regulation and enforcement. It comprises nine divisions, all of which bring in revenues that have kept DCCA self-sufficient in recent years. The divisions are: Professional and Vocational Licensing, Business Registration, Cable Television, Financial Institutions, Administrative Hearings, Consumer Advocacy, Insurance, Consumer Protection and the Regulated Industries Complaints Office.
The divisions brought in $34.5 million in fiscal year 2003, which ended June 30, 2003. According to figures provided by DCCA officials, the Compliance Resolution Fund has carried net ending balances of $43.1 million in 2000, $52.6 million in 2001, $61.3 million in 2002 and $31.9 million last year, despite legislative raids of $28 million and $19 million in 2003.
Senate Bill 2525, scheduled for final votes by both houses today, would repeal the Compliance Resolution Fund and redirect the professional, vocational and other licensing fees to the general fund. Money from the Professional and Vocational Licensing Division, which has a $4.9 million balance, would be retained in a special fund under DCCA control.
A recent survey by the Chamber of Commerce of Hawai'i ranked DCCA as the state agency with the best service. More than 70 businesses and groups testified in opposition to Senate Bill 2525 during recent legislative meetings.
Taniguchi does not dispute that the state's budget constraints led lawmakers to consider redirecting the fund's revenue.
Bringing DCCA's budget back into the general fund also would allow the Legislature to increase its overview of the agency and its accountability, Taniguchi said. He stressed that far from seeking to skim money perpetually from the account, the bill contains a provision that requires DCCA to lower its fee structure if revenues come in over 110 percent of expenses, and to increase them if revenues are less than 90 percent of expenditures.
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.
