Looking back at Legislative Response to ERTF

Remember the ERTF? It was the Economic Revitalization Task Force pulled together by former Governor Cayetano in response to Hawaii's struggling economy of the 1990's. As the nation faces one of its most challenging fiscal disasters, and as we wait to see whether Congress will pass an amended bill on Thursday, I thought it might be of interest to see how the legislature has responded to economic downturns of the past. Even though it was over 10 years ago, some ideas may still be valuable.

House Majority Leader Kirk Caldwell asked the House Majority Staff Office to provide him with some research on the subject, and here is what he shared with members last week:

The ERTF issued their proposals for economic recovery in October 1997. The legislature responded by passing legislation during the 1998 and 1999 legislative sessions. While there were others, these were what I considered key pieces of legislation:

SB2259, enacted as Act 156, Session Laws of Hawaii, 1998. This Act established the Hawaii Tourism Authority, established the Tourism Special Fund, allocated a portion of the transient accommodations tax (TAT) to the Tourism Special Fund, raised the TAT assessment from 6.0 to 7.25 percent, and expanded TAT to include time share vacation unitst.

HB2560, enacted as Act 115, SLH, 1998. This Act provided the University of Hawaii with greater autonomy and decision making powers.

SB2213, enacted as Act 230, SLH, 1998. This Act created a special committee with the task of transforming state government's budgeting, accounting, and procurement system, including the implementation of performance based budgeting. The Act created another special committee to develop a managed process that enables state and county governments to implement public-private competition for government services.

HB2749, enacted as Act 157, SLH, 1998. This Act provided for income tax relief by reducing tax rates over a four-year period and by establishing a low-income tax credit.

SB638, enacted as Act 71, SLH, 1999. This Act provided for the depyramiding of the General Excise Tax by reducing the GET assessment on wholesale sales of services to one-half of one percent.

(Note: links only go back to 1999 session.)

Do Americans really want MORE government?

Time magazine and the Rockefeller Foundation released results from their new poll on Americans and the Economy. It's predictable that the majority of those polled are concerned about their current economic situation, their future, and their children's future. What is rather surprising is the level of despair - what the publication calls "deeply, pessimistically unhappy" about the direction of the country.

Dissatisfaction levels are highest among Blacks (96%) and Latinos (88%). Fewer than half of the young people between the ages of 18 -29 believe that our country's best days are ahead. We are no longer an optimistic nation.

Most intriguing, a majority of those surveyed believe in the power of Big Government to solve the biggest problems of our time. They support major government investments that create jobs — 82% favor public works projects — and they remain sympathetic to the economy's victims: 70% say more government programs should help those now struggling. It is a shocking shift in sentiment, a counterreformation of sorts in a Republican-led era that emphasizes deregulation and self-reliance. Do Americans really want more government? The answer to that question may be provided in the November election. But history has shown that when the going gets tough, even the tough expect their Uncle Sam to get going.

44% think the government should be primarily responsible for expanding programs to help the economy

45% are worried about losing health insurance coverage

71% would rather have a job that guarantees health care and provides a pension than one that pays more

82% think the government should increase spending on public works projects to create jobs

88% of 18-29 year-olds think government should subsidize childcare