From the November 29, 2002 print edition
Business leaders prepare legislative agenda
As Hawaii's first Republican governor in four
decades prepares to take office, the business community
is preparing its lists of
issues to place on her desk.
Taxes, health costs and workers'
compensation are certain to be at or near the top of
most of those lists.
"These are seen as the make-or-break issues that
weigh heavily on the backs of businesses in Hawaii," said
president of the Chamber of Commerce of Hawaii.
three issues received top priority in a chamber survey
of 1,100 of its members. Armed with that survey, chamber
members met last week to discuss how best to achieve
their main goals heading into a 2003 legislative session
in which Republican Gov.-elect Linda Lingle will have
to contend with majority Democrats controlling both the
House and Senate. Tollefson said the agenda will be completed
in January, just before the Legislature convenes.
Regarding tax cuts and incentives, it's important
to look past specific bills to what the overall effect
of the sum total of legislative action is on the business
community, says AIG Hawaii Insurance Co. CEO Robin Campaniano.
Chamber members have a responsibility to educate lawmakers
and their staffs on the importance of a healthy business
environment so that they are less inclined to introduce
or support bills that are bad for business, he says.
Having to defend against such harmful bills takes up
too much time and energy of the usinesspeople and business
the state Capitol, preventing the business community
from working cohesively to advance positive legislation,
"The vast majority of our elected officials
and staff are wonderful people and trying to do the right
thing, but a lot of them have
had little or no experience in the private sector," he
said. "What we've got to do is tell them how the
system works, explain to
them economic theory, the theories we face from day to
day. This, perhaps, is one of the most important functions
that we can
Chamber members discussed how business
can work with the new governor and legislators to identify
areas of government that
are too cumbersome, and taxes or fees that can be eliminated
or replaced by other existing assessments to help reduce
paperwork, such as having public utilities and transportation
companies pay the 4 percent general excise tax instead
of the 4
percent public services tax.
The chamber also may consider
asking Lingle to push for a reduction in the G.E.T. to
3 percent, instead of her advocating
elimination of the G.E.T. on medical services. Campaniano
says that would spread the benefit further throughout
community and not just to one or two segments.
"This would help more consumers and it certainly would
help all businesses," he said. "With a reduction
of the G.E.T. just for
medical and food services, we're helping only certain
sectors of business."
Business also must be willing to identify areas that
could be cut to help make up for the $300 million that
would be lost through
such a G.E.T. reduction, Campaniano says.
"When we're talking tax relief, we're talking less
state tax revenue," he said. "[The state is]
going to have to offset that
Another area of chamber interest is privatization,
or managed competition, of government services. The chamber
needs to work
with government to identify areas where private companies
can provide services better and at lower cost, and then
make those potential opportunities known to chamber members,
The same also can be done with the military,
which accounts for $9 billion of economic activity in
Hawaii and which also is
looking to privatize many of its services, from housing
to aircraft aintenance, he says.
Another issue is mandated benefits.
Legislators have enacted laws creating 15 such mandated
benefits since 1987, including
benefits for newborn babies and reimbursements for certain
dental procedures, among others. Chamber members need
at these benefits, including the Pre-Paid Health Act
of 1974, says Gregg Yamanaka, president of TeraBiz and
chairman of the
chamber's Small Business Council.
To do that requires
looking at old problems in new ways, and that must involve
greater collaboration between the various
stakeholders, including business, government, insurers,
employees and health plans, Yamanaka says, adding that
focus on quality of health care, structure of health
plans and the cost of providing quality care without
blaming any one group
for the present problems.
"Health-care costs need to be solved by an alliance
of partners," he said. "This is shared responsibility.
We're trying to look at
all perspectives, look at all proposals, put them all
on the table and see which ones make sense."
task force last year recommended several changes, including
creation of a new review process, and that
will be one of the key areas of attention at the Legislature,
Regarding the Pre-Paid Health Act, Yamanaka says businesses
also must become more aware of the law's provisions and
willing to change how they approach health care. He pointed
out that most of the businesspeople attending the chamber
meeting said they still pay 100 percent of their employees'
health-insurance costs, even though the law allows for
pay up to 1.5 percent of those costs.
To help provide
buying power and lower costs for employers, the chamber
is in discussions with the Hawaiian Business Health
Council to provide a health- care plan for its members,
Yamanaka says. The council represents the major employers
Honolulu and, when combined with the chamber's membership,
creates a work force of nearly 200,000 people. That collective
power could be leveraged to get reduced rates and other
benefits, Yamanaka says.
Tollefson says talks are ongoing
and declined further comment on the idea.
There is a looming train wreck
coming in the area of workers' compensation unless changes
are enacted, says Christine Camp,
managing director of Avalon Development and vice-chairwoman
of the chamber's board of directors.
Concerns for businesses
include increasing medical costs, increased longevity,
including people receiving lifetime disability
benefits, use of alternate care, inflation, a weak economy
and the inability of insurers to increase company premiums
payouts, Camp says.
Chamber members need to lobby for
more-equitable laws that set limits on how long and how
much treatment injured workers
can receive, and push for more money for state agencies
so they can acquire sufficient staff and equipment to
claims, Camp says. She pointed out that the state of
Wisconsin settles claims for workers on temporary total
disability in an
average time of 2 1/2 weeks, while 15 percent of Hawaii's
claims remain unsettled for between one and two years,
percent longer than two years.
It's vital, she says, that
businesses begin a dialogue on these matters now, since
it may take years for changes to be enacted. "Drunk
driving, it's a no-brainer … but it
took seven years to pass," Camp said. "Workers'
comp may take just as long, but we
feel this is the right time to start."
Reach Ben DiPietro at 955-8039 or email@example.com
Pacific Business News (Honolulu) - December 2, 2002
© 2002 American City Business Journals Inc.