Debbie Downer and her impact on policy-making

Recently, I received an email from a friend sharing their angst as to our county government having “No leadership, no great vision for the future, little competency, and a stubborn unwillingness to change.”

While my friend acknowledged that there were some “bright spots” and a few good people trying to do good things, her lament focused primarily on the bar being set so low. It seems our county leaders do not believe bold action or meaningful changes are possible. Consequently, none occur, and few are even attempted. The voices of the naysayers and Debbie Downers always seem to drown out those who seek out-of-the-box solutions.

I have to say that I agree. My experience serving on the County Council is that most who hold leadership positions are consumed with just doing the day-to-day management and putting out the myriad of little fires that break out daily within any organization. Most departments are under-resourced, with insufficient staff needed to expand their work load.

The elected leaders, for the most part, prefer to operate in the “safe zone” of simply doing what has always been done. They will fight over balancing the budget and advocate “efficiency and budget cuts,” yet, it inevitably passes without meaningful cuts.

The costs of personnel will always be the major budget expense, and cutting “live bodies” (as they say in government budget jargon) is politically impossible in a small community where everyone is your friend and a voter.

The alternative to cutting the budget is to find more revenue, which translates to increasing taxes. This is also politically problematic, as people who cannot serve without first getting elected are loath to cut people’s jobs and raise taxes.

Therein lies the conundrum. Any new idea or program will likely cost money, and there are only two ways to find the money — cutting costs (jobs) or raising taxes — both an anathema to electeds.

The answer is creativity. To have any real chance of even attempting new programs or ideas, they must not involve any new expenses, and/or the money needed to implement them must be raised from sources that do not impact voters.

While working within these limitations certainly increases the challenge, solutions forthcoming within these parameters are not impossible.

Options include:

1) Affordable rental housing: Freezing/deferring future property tax increases that normally would be incurred from the added value created by the construction of a new rental unit on existing residential lots. This is not current tax income and will not become tax income unless the landowner builds. The county could say to individual homeowners: “If you build a new rental unit on your property, and certify in writing that it will only be rented at set ‘affordable rates’ for a period of 10 years, then the county will waive the property taxes that would otherwise be normally due for that same period (that are associated with the new construction).”

If these savings were combined with the waiving of water meter hook-up fees and other county fees associated with building permits, the savings could tally up to be a significant factor and thus motivate the construction of new affordable rental units. This proposal would have a “revenue neutral” impact on the county budget and potentially create new affordable housing, and lead to economic development.

2) Large affordable housing projects: The same concept described in #1 above can be used for the construction of infrastructure associated with large residential projects either for rent or for sale. Again, this mechanism has no negative financial impact on the county budget. The larger project funding mechanism is known as Tax Incremental Financing (TIF) https://en.wikipedia.org/wiki/Tax_increment_financing

3) Taxing rental cars: The state reserves the legal authority to tax car rentals, BUT the county can effectively do the same thing via its property tax system. The county does not have legal authority to raise the daily rental car tax rate, but could instead create an additional “use classification” for properties used for car rentals, then modestly increase the property taxes, which the companies would pass on to the user (the tourist renting the car) at a rate which might translate to a $5 per day increase for each car rented. This equals revenue to the county as if it has raised the daily rental car tax rate. Is it simple? No. Can it be done? Absolutely. Actually, utilizing the county property tax on “use” mechanism could be applied to all kinds of activities that are unhealthy or otherwise should be discouraged (think alcohol, guns, chemically intensive farming methods, etc.), and upon which the county technically has no legal authority to tax.

Just a few ideas and a little out-of-the-box thinking, combined with the political will to explore new options, could open up a whole new world of options for our county.

•••

Gary Hooser formerly served in the state Senate, where he was majority leader. He also served for eight years on the Kauai County Council and was the former director of the state Office of Environmental Quality Control. He serves presently in a volunteer capacity as board president of the Hawaii Alliance for Progressive Action (HAPA) and is executive director of the Pono Hawaii Initiative.

9 Comments
  1. puravidakauai January 3, 2018 7:10 am Reply

    Nice try Gary. There’s creative thinking and then there’s flawed thinking. Take your rental car proposal. If you want to achieve a $5/day tax through the creation of a new property tax class, you’d need to raise the tax rate astronomically. For example, if you have a 100-car operation that, for arguments sake, rents out every car for 365 days, it would bring in $182,500 in new annual tax revenue. Now that same operation likely has a property that’s assessed somewhere around $1.5 million. At the current commercial tax rate of $8.10 per thousand, the annual taxes would be $12,150. To get an additional $182,500 the rate would need to be increased by $121.67 bringing the new property tax rate to $129.77. I’m not sure what world you’re living in, but a 1,502% increase in property taxes seems a little excessive and certainly out on line with the tax rates for other categories. Moreover, property taxes do not vary with usage, so if there’s a turndown in tourism the companies would still be required to pay their property taxes even if no cars were rented. Thank goodness you’re no longer on Council to float these harebrained proposals without thinking them through.


  2. Charlie Chimknee January 3, 2018 10:31 am Reply

    Mr. Hooser…

    BRAVO…! ! !


  3. Steve Martin January 3, 2018 11:25 am Reply

    “The alternative to cutting the budget is to find more revenue which translates to increasing taxes.” Gary, this is the prime example of why we get no where as described. Our government policy is to solve problems and if they don’t have the money they raise our taxes. Our policies must change. if we we want to get this done, “creativity” will be the only way we can move forward. For us who become faced with solving our financial problems in the private sector, our only source in most cases is that we must find ” creative” ways of solving our problems since a money tree doesn’t exist. Government on the other hand just raises our tax thinking it’s going to solve Everything. We desperately need to change how government works. I feel strongly that our way we get people elected should also change. I would rather much see a resume of experience and being compatible with each council member would be a far better way to get the right people in office. Existing, I see the elections as a popularity contest with those with the biggest families and friends are the ones who get elected and as a result withthe lack of experience everyone suffers for it.


  4. Jeff gordon January 3, 2018 1:09 pm Reply

    Amen, Gary.


  5. RG DeSoto January 3, 2018 5:15 pm Reply

    What a shame that it’s come to the point where people like Gary, and his faithful (disillusioned) followers see government as the only solution to all the apparent problems. If one examines many of these issues from a historical & economic perspective it becomes obvious that it is government intervention/interference that is the cause is the first place. More government and busy-body meddling will NEVER solve anything…otherwise these problems would have been put to rest long ago.
    The best that government and people like Hooser can do is just get the h_ll out of the way…markets will work, contrary to the prevailing lefty-progressive mentality.
    RG DeSoto


  6. John Zwiebel January 3, 2018 5:22 pm Reply

    “affordable rent”. I guess I’m a “Debbie Downer”. The only kind of property I can imagine being rented at an “affordable rate” is one that is way too small to hold more than one person, or is in such sad shape that it might not hold up for 10 years. But that’s my experience. I’d be happy to have someone show me I’m wrong. I never did understand how my neighbor in Denver made money renting “affordable housing”. It was as if there was some missing piece which might have been a sale of tax credits to other, more profitable businesses.

    California, which started it (according to the Wikipedia link) did away with TIF. The way I understand it, all tax increases from all properties on the island would be directed to financing whatever the TIF redevelopment project is. Unfortunately, there aren’t enough taxes on the island now to pay for the basic services we currently need, so I don’t see how this works either.

    puravidakauai seems to have a point on rental cars, but then perhaps the assessment of the car rental property is way too low. Do the rental companies lease the land at the airport or do they own it? (I sure hope it is leased) Perhaps the price of the lease should be increased.

    Steve Martin wants government to “think different”. I can’t help but think it costs what it costs and so yes the only way to pay for it is to increase revenue somehow.

    Our problem is the inequal distribution of wealth in our nation because we rely on the Capitalist system. A system that forces me to raise the rent on the houses I own just to “keep up”.

    I don’t see a solution.


  7. Jim hennessy January 4, 2018 5:41 am Reply

    I am surprised the Garden Isle would run weekly articles by someone so obiviously seeking public office.


  8. Amused January 4, 2018 11:34 am Reply

    Too bad Gary never managed to think outside the box or build effective coalitions when he was on the Council or in the Legislature. Now he’s just a backseat driver throwing out more unworkable solutions to problems he could never solve while in office.


  9. Steve Martin January 6, 2018 1:50 pm Reply

    Yes John Z…. You don’t see the solution because just like Gary and the rest of the liberal socialist pro government who would never step out of the box the only thing any of you can come up with for solutions is to raise taxes to pay for it. Yes I think government as we see it has to change. The word is “creativity”. It’s What the private sector does when they don’ t have the money to solve a problem? Our government local or state just raises taxes which has shown not to be effective as a solution.


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