Special to Hawai`i's H4 € Volume 21, No. 1 € January 1996

The World Wide Web Edition

NEW taxes, a higher minimum new long term care tax, gambling, enriched mandated benefits and stifling regulations seem to be high on the agenda for the '96 State Legislature. Just as high on the '96 agenda, will be reelection dreams of all 51 State House members and 13 of the 25 State Senators.

Missing, seems to be tax and regulatory relief for small business, genuine improvement in the business climate and substantial cuts in spending, number of public employees and government involvement. (To hear directly from legislative leaders what they say in their own words, be sure to attend SBH's Annual Business Conference on January 10; a panel entitled, "What Business Can Expect in '96," will be featured at 10 am)

The Legislature begins its 60-working day Session Wednesday, January 17, back in the State Capitol after a 4-year hiatus.

Despite comments made at the November Hawaii Congress on Small Business, it will be nothing short of miraculous if any meaningful business improvement bills are passed. But then, as always, that's up to small business' commitment and legislative ACTION.

Specific areas to watch during '96:

* Gambling: government wants MORE revenue for spending. Taxes would not be reduced. Hawaii's economy would not be improved, but gaming is the siren song in '96;

* The Democratic caucus' priority to pass the "Project Hope" long term care taxpayer-funded government program;

* Costly new mandated benefits and workplace regulations under the guise of "safety" and civil rights;

* Union-backed proposals to increase the minimum wage (currently $5.25 per hour);

* Continuing attempts to raise the 4% Gross Income General Excise Tax to cover spending excesses of the Administration and Legislature and to pay Hawaiian political groups for promised land reparations;

* Further elimination of tax credits;

* Increased fees, licenses, use taxes and other costs to business and individuals;

* Resistance to eliminating unemployment benefits for public and private strikers, even with greater public opposition;

* Extension of the Employment & Training Fund Tax (EFT), which adds 0.05% tax to every UI-paying employer, enacted five years ago over the objections of every business organization. Scheduled to sunset in 1996, the State Administration reportedly is split on allowing this added burden--and subsidy of big, unionized, cyclical businesses by small business employers--to continue. State DOL wants it.

From 1985-90, every business organization OPPOSED a state employee training fund; even as an inducem nt to temporary lower unemployment taxes. The "fund" was another name for more tax.

In 1991,the Fund was passed (Act 68) and added .05% to every employer's UI tax bill. It contained a 5-year "drop dead" clause. SBH and other business groups spoke against this Fund in a clear and unified voice, offering four primary objections:

(1) It represented another NEW TAX, that added to the burden of unemployment compensation. It neither offset tax rates--among the highest in the nation--nor reduced the staggering Reserve Fund. It did nothing to deal with inequities in the UI law, fraud or strike benefits.

(2) The Fund is another costly mandated employee benefit.

(3) More than 70 private, public, and joint programs existed, all designed to retrain employees; most were job and skill specific.

(4) The Department of Labor (DOL) had no actual training program in mind; it was prompted by compulsory labor unions and sought to impose more burdens on employer-based businesses, especially small businesses, that subsidize larger, unionized, cyclical and seasonal businesses, while gaining revenue for itself.

When the Fund was enacted, the DOL paid consultants to fabricate a program after the fact. The tax and mandate were more essential than actual employment training.

Total taxes collected by this fund (through 7/31/95) amounted to a whopping $10,850,581, while actual training expenditures totalled only $4,361,883. Administrative and bureaucratic costs are HIGH. There is no statistical evidence that after 5 years training has been successful, resulted in less business closures, or improved the business climate. The contrary is true.

Amazingly, the Chamber of Commerce of Hawaii now reports that almost half of its members--including several small business firms--support the retention of the tax. Hard to figure if that's true.

Don't just sit on the sidelines: let SBH know how you feel about these and other issues and get involved with SBH's Legislative Action Committee (LAC) and the SBH Biz Fax Net to have an impact during '96. Bob Sigall of Creative-1 is SBH's LAC Chair, and he invites you to the Legislative Panel during the SBH Annual Conference, Wednesday, January 10, the first LAC meeting of 1996, Thursday, January 11, (SBH office in Hawaii Kai, 11am-12:30), as well as your active participation and input all through the '96 Legislative Session.

The 20th annual Small Business Hawaii business conference will be Wednesday, January 10 -- the first major business conference of '96. It will be held in the Hibiscus Ballroom, Ala Moana Hotel, 8am-1:30 pm.

YOU should be there -- and invite your business colleagues for a full day's activities to prepare for Hawaii's business and political landscape during 1996. RESERVE today!

"SMALL BUSINESS: LEADING HAWAII'S ECONOMIC REVOLUTION," is the conference theme. Speakers will include Lowell Kalapa, George Mason, Orson Swindle and a panel of Hawaii legislative leaders.Grover G. Norquist, president of the Americans for Tax Reform in Washington, D.C., is the keynote luncheon speaker. A close personal friend and advisor to House Speaker Newt Gingrich, Norquist created the famous Congressional "tax pledge" which resulted in a historic change in control in Congress during 1994.

In addition to SBH's "Small Business Success Profiles," the 1995 "Small Business Person of the Year" will be announced.

Ballots cast for SBH Directors were tabulated at the December 12 meeting. Four candidates sought three seats.A tie vote for one race prompted the Board to accept both candidates, expanding the Board to 11. Elected were: Pamela Gottlieb, Jim Sharp. (both for 1-year); Bob Sigall and Sam Slom (re-elected for three year terms).A directorship is an unpaid commitment for active involvement and service to the organization. The Board reelected the following officers of the corporation to one-year terms: President/Executive Director, Sam Slom; Vice-President, Jed Gaines; Treasurer, Kenneth Lum and Corporate Secretary, Jean Fukuda.

'96 SBH MEMBER REFERRAL DIRECTORY DUE NEXT MONTH

The annual SBH Member Referral Directory will be published next month.

The 1996 Directory will include paid member firms and information AS OF DECEMBER 31, 1995.If you didn't respond to SBH's previous notices, it may be too late to make name or telephone changes for this year's Directory; but if there is a change, CALL or FAX SBH ASAP, but no later than January 15. Every effort will be made to include any revised information until that date.Member firms will be listed by name and primary business category at no charge. Those not wishing to be listed need only indicate their choice to SBH.The Directory also contains important member benefit information, government phone numbers and other business features.

CAREER OPPORTUNITY IS LOOKING FOR YOU

Know of a secretary/receptionist/office manager looking for a good job? SBH is looking for such a person and can provide a challenging career opportunity in a 3-person office in Hawaii Kai.Must be excellent communicator, "people-oriented," and creative self- starter, willing to accept maximum responsibility for projects. Should be interested in, and knowledgeable about, business in Hawaii.Will train right person. Competitive salary and benefits, and advancement potential. Interested? Send resume with salary and requirements to: President, SBH office.

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