Previously in this space, we spoke of various laws that were suspended by the Governor’s emergency proclamations.  In a press release on March 17, 2020, entitled “Democracy Still Matters in Time of Pandemic,” the watchdog group Common Cause Hawaii pointed out that a Supplemental Emergency Proclamation, issued by Governor Ige on March 16, 2020, suspended many laws pertaining to transparency and accountability, including chapters 92 and 92F of the Hawaii Revised Statutes, relating to open meetings of government decision-making bodies and public access to government records.

The Office of Information Practices, which enforces both of those laws, issued advice to agencies and boards on March 23, and, among other things, told agencies that boards and other public bodies holding meetings were encouraged to give notice and public visibility to meetings but it was okay to meet behind closed doors with no public notice.  Public records requests made after the Supplemental Emergency Proclamation took effect could just be ignored.  It told agencies that if they wanted to respond, they could say: 

As this is a global pandemic and a serious threat to the safety and welfare of our state’s population, 92F was suspended to give government the maximum flexibility to focus its attention and personnel resources on directly addressing the immediate situation at hand.  When the situation is stabilized and there is proper leeway to re-direct those resources, the suspension of 92F will be lifted.

Basically, the Administration’s attitude was something like treating concerned citizens like pond scum, and saying, “We’ll get back to you later.  Maybe.”

In the Seventh Supplemental Proclamation on May 6, the Administration backed off a bit.  With regard to public meetings, boards were now ordered to post meeting notices and accept written testimony from the public.  Regarding records requests, agencies now needed to acknowledge them, respond to them as resources permit, and aren’t supposed to destroy either the requests or the requested records.

That modest progress happened because of the Civil Beat Law Center negotiating over several weeks with the Department of Attorney General on behalf of a coalition of nonprofit public watchdog groups including the Tax Foundation of Hawaii.

To me, however, justification for suspending these laws in the first place is and was sketchy. 

Under the emergency powers statutes, the Governor can suspend any law that creates hardships and inequities; obstructs public health, safety, or welfare; or impedes or tends to impede emergency functions.  Could someone explain to me how allowing public board meetings to be conducted in public creates hardships and inequities?  Could someone explain to me how the public records laws impede emergency functions?  Could someone please explain to me how or why the snuffing out of governmental accountability relieves hardships and inequities, or obstructs public health, safety or welfare? 

The official explanation, that compliance with the laws will take away agency time and resources and otherwise would be inconvenient, could be applied to any law in any way restricting the power of government.  At least the federal laws and state constitution can’t be suspended in this way.

The Common Cause Hawaii press release said it well:

Any reduction in public participation in government proceedings must not be exploited by any political party or interest group for personal, partisan, or other political gain. The same rules of access must apply to everyday Americans and well-connected lobbyists. This is a time for our country to be united to protect each other as we face COVID-19, and that includes respecting and protecting public participation in and oversight of government.

In an article in this space just a couple of weeks ago, we growled and grumbled about the possibility that our Governor, having already suspended laws and chapters in the Hawaii Revised Statutes in a listing seventeen pages long, would start monkeying with the tax code.

At the time, however, the Governor hadn’t touched the tax code at all.

That just changed.

In a “Sixth Supplementary Proclamation Amending and Restating Prior Proclamations and Executive Orders Related to the COVID-19 Emergency,” our Governor crossed the Rubicon.  Buried on the 19th page of a 68-page the document is a sentence suspending “Section 237D-6.5(b), distribution of the transient accommodations tax.”

What does that do?

That section specifies how moneys collected from the Transient Accommodations Tax are to be distributed.  It is chock full of earmarks.  It now requires portions of the tax to be sent to the Hawaii Tourism Authority for tourism marketing and promotion; to the counties; to the Department of Land and Natural Resources for protection, preservation, maintenance, and enhancement of natural resources, including beaches, important to the visitor industry; to the Hawaii Convention Center; and to paying off the cost of the Turtle Bay conservation easement.

Suspension of the section means that all these earmarks have been thrown out the window.  The money from the TAT, although perhaps a whole lot less than the money that used to come in from the TAT in prior years, is going to go where the Governor wants it to go.

This foray into the tax code with the suspension pen will create victims.  The most likely targets are the counties.  For at least a half dozen years, the counties and the state have been bickering about how much TAT money the counties are going to take home.  The latest version of the code gives them $103 million annually, with Honolulu getting 44.1%, Maui 22.8%, the Big Island 18.6%, and Kauai 14.5%.  That has now come to a screeching halt.  As a result, the counties may discover that they are going to have gaping holes in their budgets, which will mean greatly increased pressure on county lawmakers to make up for it by revenue enhancement measures.  Such as property tax increases.

At the same time, we at the Foundation are wondering how the suspension of tax law could possibly be called for by the emergency.  The emergency powers statute, HRS section 127A-13(a)(3), allows for suspension of “any law that impedes or tends to impede or be detrimental to the expeditious and efficient execution of, or to conflict with, emergency functions.”  What does distribution of transient accommodations tax money have to do with the execution of emergency functions?  Are they saying they can’t pay our emergency workers without this money grab from the counties?  What about all the other money that is coming in from all the other taxes, like the corporate income tax, the personal income tax, and the general excise tax?  And aren’t many of the first responders, such as fire and police departments, ambulance paramedics, and lifeguards, on county payrolls?  Does it matter at all that the dollars that might go to pay them are getting swiped?

When Julius Caesar crossed the Rubicon in 49 BC, he went on to become dictator.  Is our governor thinking about a similar path?  In the ensuing weeks, we will see what is waiting for him on the other side of the river.

Here we are, still amid the COVID-19 emergency, and there appears to be some confusion over what laws still apply.  The Governor and Mayors have put out orders using emergency authority, and the Governor has suspended many laws.

We need to keep in mind that most of the laws we have still apply, and we need to think about the consequences if we are going to break them.

Sometimes, it is very tempting to think that when we are trying to do good then all laws should fall by the wayside. 

For example, consider Maui Brewing Company.  A recent news article pointed out that the company donated more than 1,000 gallons of hand sanitizer to first responders and others.  The company then decided to give away some bottles of sanitizer to customers who purchased food, drink, or both – and got into trouble with Maui Liquor Control because you’re not allowed to offer incentives to purchase alcohol.

“Of course we’re trying to encourage some business, but is it wrong?” the company’s president is quoted as saying.  The short answer is that yes, it is wrong.  We expect no liquor licensees to offer incentives to purchase alcohol.  If we think the law needs to be changed, there’s a process for doing that.

The Maui News reports that the sanitizer will be sold going forward.

Another interesting story involves an Oahu nurse, as reported by KHON2.  She was worried about the shortage of personal protective equipment for health care workers like herself.  But she didn’t just accept her fate.  She found someone with access to N95 masks in China.  With her daughter, she started a GoFundMe page.  The page raised more than $20,000.  She took the money, bought personal protective equipment including N95 masks, and then donated the equipment to many local hospitals.

That may sound like a heartwarming story, but it does raise a couple of questions.  For example, why can a random nurse here in Hawaii buy personal protective equipment in China while thousands of hospitals, clinics, states, counties, and towns here and elsewhere in our country are scouring the universe looking for this stuff?  Is the equipment reliable, or is it going to be a cheap knockoff of a reliable product that either is contaminated to begin with, or is destined to fail in hours or minutes?  And what kind of price is being paid?  Is our nurse getting gouged?  And is anyone concerned that $20 grand is leaving this country and is going to China?

Also, and we hope our big-hearted nurse realizes, there are taxes that need to be paid.  If anyone – a business, an individual, or a nonprofit – imports $20,000 worth of equipment, that someone must report the import and pay Use Tax of 4.5% on it.  It doesn’t matter that the importer “intended to do good.”  It doesn’t matter that the imported goods were donated to tax-exempt 501(c)(3) hospitals.  (If the hospitals imported the equipment themselves, they would be liable for the tax.) 

A genuine desire to do good, or to do the right thing, is not a license to disregard all other laws that might get in the way of that desire.  If I, in my excitement about delivering five cartons of N95 masks to Waianae Coast Comprehensive Health Center, barrel down the H-1 freeway at 90 mph with the equipment, I should be prepared to deal with the consequences of perhaps getting a speeding ticket or, God forbid, getting into a motor vehicle accident.  Maybe some laws should be suspended under the circumstances; but I don’t have the authority to make that call.

“Governor Ige has emergency powers,” one alert reader said.  “Can he raise our taxes by himself?”

The answer appears to be “no, but.”

The Governor’s emergency powers relating to enforcement of existing laws are in Hawaii Revised Statutes chapter 127A.  Basically, this chapter says that the Governor has the power, during an emergency, to suspend laws that are getting in the way of emergency efforts.  He does not have the authority to decree new laws by himself.  That is the Legislature’s job, emergency or not.

So, there won’t be new tax laws, but…

What if the Governor said, “We have a bunch of tax exemptions and credits that are getting in the way of collecting revenue that we absolutely need for our government to function.  We are getting rid of them as of now.”

This is not a far-fetched scenario.  You may recall about a decade ago our lawmakers passed Act 105, Session Laws of 2011, which suspended twenty-three different General Excise Tax exemptions, including some for the contracting business and some helping those who sold tangible goods to the Federal Government, for a two-year period starting on July 1, 2011.  (It initially started off as a five-year suspension, but testifiers almost uniformly blasted the bill, and lawmakers cut it down to two years.)  The suspension lasted until June 30, 2013, but thankfully was not renewed afterwards.

The governor’s authority to order suspensions, according to the law cited in his emergency proclamations, is Hawaii Revised Statutes sections 127A-12 and 127A-13.  Section 127A-12 allows the governor powers relating to emergency management, but it does not once use the word “suspend” or any recognizable form of it.  Section 127A-13 allows the governor additional powers during an emergency.  Paragraph (2) allows the governor to relieve hardships and inequities, or obstructions to the public health, safety, or welfare.  Paragraph (3) allows the governor to suspend any law that impedes or tends to impede emergency functions.

Does a tax exemption or credit impede emergency functions?  Does one create hardships or obstruct public health?  

Sure, a tax credit or exemption costs money, in the sense that revenue won’t be coming in the door quickly enough to pay off things we already are obligated to pay, such as salaries, post-employment benefit payments (such as the ones going to the Employees’ Retirement System or the Employer-Union Trust Fund that pays health benefits), rent, and bond interest.  If any fiscal cost of a tax credit or exemption can be seen as impeding emergency functions, creating hardships, or obstructing public health, then the same can be said of anything else the state is obligated to spend money on, or devote any effort to (because we need to pay the people who exert that effort).  So, at least to us, the justification for that type of suspension paints with too broad a brush and for that reason appears bogus.

In this time of crisis, we must have government functioning legitimately and we, the people, must have confidence that it is doing so.  Now is not the time to use specious arguments to justify tactics that likely would be a surprise to the legislators who granted the Governor those emergency powers in the first place.  We need to know that the tax money government spends and the other resources that it manages are handled fairly, wisely, and above board.  This is too important a matter for the government to fail us.