LIHU‘E — 2010 is shaping up to be a critical year for momentous legislation on the state and federal levels, and the organization tasked with representing business interests hopes it will play a major role in the action. “It impacts
LIHU‘E — 2010 is shaping up to be a critical year for momentous legislation on the state and federal levels, and the organization tasked with representing business interests hopes it will play a major role in the action.
“It impacts their businesses, especially small businesses. They’re just trying to survive in this economy. … Some of these small businesses are really in dire straits,” Kaua‘i Chamber of Commerce President Randall Francisco said Tuesday. “If we can advocate legislation that is pro-business, then it will help and contribute to the economy turning around.”
Francisco joined with representatives of the U.S. and Hawai‘i Chambers of Commerce in a gathering with island business leaders Tuesday morning to discuss the impact that issues like the state unemployment insurance tax hike as well as health care reform, cap-and-trade and card check will have on commerce during a breakfast meeting at JJ’s Broiler in Lihu‘e.
“I don’t think anyone forecasted the worldwide (economic) turn,” Hawai‘i Chamber of Commerce Vice President of Business Advocacy and Government Affairs Sherry Menor-McNamara said of the pending hike to the state unemployment insurance tax.
Businesses could pay, on average, $1,070 per employee in 2010, up from just $90 in 2009, according to statistics from the state Department of Labor and Industrial Resources.
Menor-McNamara said she has been working with state House and Senate leadership and the chairs of the two Labor committees to “fast-track” legislation to mitigate the increases, and said “there is a strong will to pass something out this session,” which opens today in Honolulu.
House Labor and Public Employment Committee Chair Karl Rhoads (D-28th, Palama, Downtown, Chinatown, Sheridan) said Tuesday that he has put forward a proposal — already in its ninth iteration — that would “take the edge off” the hikes by deferring some taxes.
He said his proposal is a compromise bill “that nobody is going to hate even if nobody loves it.” He said he had to balance the conflicting goals of refilling the unemployment fund and not further damaging businesses already struggling to survive, and could not simply allow the self-adjusting system put in place when Act 110 passed three years ago to adjust itself because the tax burdens would be too painful.
“The Chamber would like more (tax deferral) and other people would like less, but all in all I think it’s a pretty reasonable compromise,” Rhoads said.
He said he has worked with Senate Labor Committee Chair Dwight Takamine (D-1st, Hilo) and is “guardedly optimistic” that a bill can be passed before a March 12 deadline that would allow the state to include the new law in first quarter filings rather than issuing refunds after the fact.
Menor-McNamara described the unemployment tax as the most important legislative issue facing local businesses this year, while Francisco said it was Nos. 1, 2 and 3.
“The key is about a message that says everyone is impacted no matter what, and how can we come to some understanding that says we want to encourage and support business and still be responsible in helping government, nonprofits and private sector move forward,” Francisco said.
Members
question proposal
A few Kaua‘i Chamber members spoke up during the meeting to voice concerns about the state Chamber’s position on unemployment insurance taxes, but all three said in phone interviews following the meeting that they support the Chamber and appreciate its work on their behalf.
“The risk is, if this is a prolonged period of economic downturn, then what they have down there is not going to be sufficient to make a recovery, and we’re going to have a bigger problem after 2013,” said Jean Camp, a managing member of Camp Consulting LLC and a single owner-operator who said she does not have the same concerns as some other small businesses.
“It’s very hard to balance everyone’s needs and costs. … People want to get away with stuff and make more money, but it’s gonna come back to bite you,” Camp said.
“I don’t believe in riding the roller-coaster ride,” said IT Kaua‘i Vice President Steve Massaro. “If we were smart about it, we would have never been in this situation. I think we should learn our lesson. When times are good, it’s a good time to put some money in the bank and not take it out. When times are bad, focus on what you need to do: Grow your business and try to stay stable in an unstable time.”
Keith Yap, Director of Finance for Grove Farm Company, said he is “on the fence” and that his company can afford to “take a hit” while some businesses are “facing disaster.”
“We may not be in total agreement with everything that’s being proposed, but I think for the island as a whole, the Chamber represents the general feeling,” Yap said. “It’s the family we belong to, and when there is a family decision, we go along with that decision.”
For more information, visit www.kauaichamber.org, www.cochawaii.org or www.uschamber.com.
Tax Table
PROPOSAL 2010 avg 2011 avg 2012 avg 2013 avg Final balance
Current law $1,070 $1,520 $1,320 $1,130 $900M
Adjusted $1,400 $1,880 $1,680 $1,480 $1.2B
Rhoads $910 $1,640 $1,920 $1,970 $881M
Chamber $910 $1,270 $1,730 $1,770 $459M
