Gov. David Ige will allow the half-percent excise tax surcharge for rail to be extended for five years to cover the cash-strapped Honolulu rail project’s estimated $910 million shortfall, and will also allow the first medical marijuana dispensaries to be established in Hawaii.
However, Ige announced Monday he plans to veto a bill that would establish a new felony offense of sex trafficking, and another that would create a new tax credit for renewable fuels.
Monday was the deadline for Ige to announce which bills he is considering vetoing. The governor has already approved more than 100 measures adopted by state lawmakers this year, and now has until July 14 to sign or allow the remaining bills to become law without his signature.
House Bill 134 to extend the rail tax was hotly debated at the Legislature this year, and Ige had said he needed to know more about why the extension was necessary to support the rail project, and why the city needs the five-year extension now.
The half-percent excise surcharge is scheduled to end in 2022, and the new law will extend it until 2027 to raise additional money to complete the rail line from East Kapolei to Ala Moana.
The Honolulu Authority for Rapid Transportation provided Ige and the Department of Budget and Finance with data explaining the potential cash crunch that confronts the rail project after construction bids came in higher than expected.
HART now projects the project will run out of money unless the excise tax surcharge is extended.
"In my review of the information provided, it’s clear that HART is short in terms of the funds required for that first segment, and the measure that the Legislature passed does assure that there will be adequate funds based on the current budget projections," Ige said.
City officials had asked lawmakers to make the excise surcharge permanent to allow the city to raise billions of dollars more to finance extensions of the rail line and to cover the projected operating losses for the line. Lawmakers declined, limiting the surcharge extension to just five years.
The measure also allows the neighbor island counties to impose a similar half-percent excise tax surcharge provided they act by July 1, 2016.
A spokesman for Honolulu Mayor Kirk Caldwell said the mayor spoke with Ige and thanked him for allowing the excise tax extension to become law. A spokesman for HART declined comment on approval of the bill.
In another hotly debated issue at the Capitol, longtime advocates of medical marijuana said they were pleased that Ige will allow a bill to become law to establish medical marijuana dispensaries in Hawaii, especially after rumors circulated that Ige might veto the measure.
Hawaii approved the use of medical marijuana in 2000, but for the last 15 years medical marijuana patients have either had to grow their own cannabis or rely on the black market to obtain their supplies.
Pamela Lichty, president of the Drug Policy Forum of Hawaii, said the idea of creating dispensaries has strong public support and strong support in the Legislature. She said the serious political push to create dispensaries has been underway for about the last five years, "and it became a priority because it was a priority for the patients."
Once it becomes law, the dispensaries legislation will allow up to 16 outlets across the state to be established to distribute medical marijuana, with the first dispensaries allowed to open as early as July 2016.
The sex trafficking bill that Ige said he will veto was opposed by three of the four county prosecutors in Hawaii. Honolulu Prosecutor Keith Kaneshiro has warned the bill would make it difficult or impossible to prosecute prostitutes for the less serious offense of soliciting prostitution, and state Attorney General Doug Chin said allowing the bill to become law might prevent the successful prosecution of offenses involving sex trafficking of some juveniles.
Ige said he is committed to combating sex trafficking, adding, "I understand the concerns raised about exploitation of women that have driven advocates to seek strong penalties for sex trafficking."
But Ige said Senate Bill 265, which lawmakers approved to create a new crime of sex trafficking, actually "eliminates the possibility for prosecution of lesser related offenses."
Critics of the bill contend "the unintended consequences of this measure would create loopholes and actually make it more difficult to prosecute sex trafficking crimes," Ige said.
He said he asked the attorney general to work with the Honolulu prosecutor to draft a bill that would strengthen laws regarding sex trafficking and allow for more aggressive prosecutions.
Kathryn Xian, executive director of the Pacific Alliance to Stop Slavery, said her organization will continue to seek a sex trafficking law.
"We’re not going to give up," she said. "The more we keep trying, the more we educate the public about what’s truly going on, the more people show their true colors about how non-victim-centered they are. They can’t hide anymore. We are the last state in the nation that does not have a sex trafficking law that is victim-centered."
Ige also is considering vetoing two bills related to the University of Hawaii.
House Bill 553 would establish a new bargaining unit to allow UH students employed as part- and full-time graduate assistants to collectively bargain for wages and other benefits.
"I’m committed to improving the working conditions of graduate students across the state, but clearly this bill had issues," Ige said Monday.
The Graduate Student Organization, which represents some 5,000 graduate students at UH-Manoa, supported the measure and testified that despite performing important research and carrying a "substantial proportion of the university’s teaching work," graduate assistants are poorly paid and lack job security. The student assistants receive part-time salaries, full tuition waivers and health benefits.
The UH administration opposed the bill, arguing that employment of graduate assistants is temporary and similar to on-the-job-training or an apprenticeship program, unlike other state employees covered by collective bargaining law. Officials also said there would be significant costs to the state if students were allowed to negotiate for wages, hours, conditions of employment and fringe benefits.
"A veto not only endangers economic growth, but also jeopardizes the efforts of past and present graduate students in Hawaii to improve their own situations and the state of higher education in Hawaii," GSO President Jonathan Dial told the Honolulu Star-Advertiser. "The unwillingness to put forth that necessary effort suggests a low valuation of higher education and its benefits for the state, and it conflicts with the Hawaii state Constitution, which guarantees the right to collectively bargain to all state employees."
Meanwhile, HB 540 would impose budgeting requirements to "ensure that appropriations to the University of Hawaii are expended for the specific purposes intended by the Legislature."
UH system Chief Financial Officer Kalbert Young told the Board of Regents last month that one of the bill’s requirements would effectively create a "use or lose it" mentality by taking any unexpended funds in a fiscal year and reducing the university’s budget the following year by that amount.
Ige said he was concerned that the bill would infringe on the university’s autonomy.
"The University of Hawaii believes, and I agree, that this measure contains provisions that violate the state Constitution regarding autonomy for university system management over university finances," he said.
UH President David Lassner said the requirement was added during conference committee, so the university wasn’t able to express its concerns to lawmakers.
"Language was introduced that we think could have severely detrimental and unintended consequences," he said in an interview. Lassner said the way UH interprets the bill, any budget restrictions in a given year would become a permanent budget cut the following year.
Other bills Ige said he is considering vetoing included:
» Senate Bill 349, which would create a new renewable-energy tax credit. Ige said the bill would not allow companies outside Hawaii to qualify for the credit, which is a potential violation of the commerce clause of the U.S. Constitution.
» SB 569, which would increase the threshold for the charge of felony theft to $750 from $300. Ige said county prosecutors were concerned this would "eliminate the deterrent effect within retail markets," and retail merchants were concerned the bill would lead to higher losses from shoplifting.
Kat Brady, coordinator of the Community Alliance on Prisons, said she has lobbied for similar bills for a decade because people with drug problems are going to prison after being convicted in felony theft cases, "and the community gets stuck paying $50,000 a year to incarcerate them." She called it "counterproductive" to lock up addicts instead of providing them with drug treatment.
