 Now, welcome back to Think Tech on a given Thursday morning. We're here talking about tax, talking tax with Tom Yamachika of the Hawaii Tax Foundation. Tom, welcome back to the show. It's always nice to have you here to elucidate us on public policy, fiscal policy and all things related. Thanks for coming down. Well, thank you, Jay. It's nice to be back on the show. So we're talking today about some very special actions taken by the governor to set aside statutory structures in Hawaii and one in a number of articles that have come up. Some having to do directly with tax and some not. Can you talk about what the governor has done that's remarkable here in the face of the COVID emergency? Sure. Beginning with the declaration of the COVID emergency, the governor has made a series of proclamations on executive orders that have knocked down sections and sometimes whole chapters of the HRS, the Hawaii Revised Statue, in a way to promote his handling of the emergency perhaps. So his proclamation says under legal authority, I've suspended certain law. And some of them are kind of fairly straightforward like the collective bargaining law. He wanted to suspend the collective bargaining law so he had flexibility to move people between departments if the need arose and by God the need arose, but was he able to move people between departments turns out that no. That was a political thing. That was a political thing. The unions pushed back and we don't know how that's gonna wind up. But let me see if it's the same thing I've been thinking about. There was a story a week or two ago about how a huge but indeterminate number of state employees were at home being paid for work they were not doing. Full pay but no work. And that was a great concern because that kind of benefit did not apply to a whole lot of people in the private sector. And somebody suggested that, wait, we have a lot of work to do. Other agencies could use these employees to do work for them. They could be transferred repurposed into other work for other agencies. And HGEA opposed that. And its position was you have to pay these workers who stay at home with full pay a 25% bonus if you want to do that. And as I recall, David Igay said, no, I can't. I really can't do that. I can't do that. And so it locked up on that and they did not move. They were not repurposed and they were not paid a bonus to move. At the end it sounded like it was only a matter of money. So whether or not he set aside the union provisions as you mentioned, the fact is it died an awful death. It was a good idea. It would have solved some problems in terms of state functionality and the emergency but it didn't go anywhere. That's my recollection. Now, one of the other laws that did get suspended was one tax law. And that was in the transient accommodations tax area. There's a statute in the transient accommodations tax area that specifies how the collected monies from the transient accommodations tax is going to go. So right now it says that certain amounts are going to be paid for tourism promotion and certain amounts are going to be paid to the Turtle Bay easement. Certain amounts are going to be paid to the counties. And this provision was a subject of heated dispute within the legislature for the past several years. And the governor with the stroke of his pen says, okay, this doesn't apply anymore. So as a result, when the big island budget recently came out a couple of days ago, it included like zero for money from the state and the transient accommodations tax, apparently because the county of Hawaii officials had been led to believe that there was no money that's going to become zero, not a zero. And we wrote about that, we kind of questioned, well, look guys, the authority to suspend laws is triggered when you have an existing law that impedes emergency function. So what emergency functions are being impeded and that would justify the suspension of this law. If the answer is, oh, we're not getting enough money for emergency functions, then the same argument can be used for almost anything that obligates any government agency to do anything or spend any money. So it appears to be writing with a very, very broad brush. Well, I think one thing that flows out of it which we should discuss is that he didn't suspend the whole TAT, he suspended only a part of the TAT. That part that required distribution of some of the TAT receipts to the counties, am I right? The TAT is still theoretically ineffective, it's just been modified. So what he did is he didn't suspend it, he suspended part of it. And the net effect of that is he changed the law with a stroke of a pen, even though you could not make a good case that this was an aid of resolving an emergency. He simply changed the law. He rewrote the law. Right, so that's what happened in that case. There are several examples. In the sixth supplementary proclamation, there are now seven. There was a list of laws that had been suspended or changed, that's 17 pages long. So it's very hard to imagine that at least some of those are not gonna be overreacting, you know. Yeah, just to compare with, I don't know if you know, but with what Trump has been doing, has he been doing executive orders to suspend existing statutes and parts of statutes in this way? Not to the same extent. I mean, Trump has been working with Congress and Congress has passed laws to give us these, like the PPP loans and EIDLs and other things to get the economy moving. We don't know whether or to what extent the administration's been working with the legislature at all. I mean, certainly there haven't been the same joint press conferences that we saw at the beginning of the session where they kind of linked hands and went kumbaya and said, we have this great package of bills to provide justice to the poor and shore of our economy and all this kind of stuff. It's basically been the governor himself doing these conferences and saying this is how it's gonna be, period. You know, it's interesting because they could have the conferences now, even though the legislature is not in the session, the leadership on both the House and Senate could join him in a conference. They could speak at least on behalf of the leadership if not the whole legislature, but they choose not to do that. Instead, it seems to be fragmented into committees which were created essentially after they went into recess. Committees which only have the power of the pulpit, they limited power of the pulpit rather than any legislative power at all. So I find it very interesting that the governor does that. I guess it's his perception of how you deal with the public. I don't know why he would wanna make himself more popular. I don't think what he's done does make him more popular. And it's a strange moment. By the way, you've heard as I have, right? That the legislature is planning on coming back into session within the next week or so, yeah. I've heard that, yes. Yeah. So when it comes back, Tom, it can immediately pass laws that would reverse. Am I right? That would reverse what the governor has done in the interim though. No, that's gonna take time. You have to start with bill introduction and go through the hearing process. Three readings in each house and all that kind of thing. It's not gonna be easy to do that when you start mid-session. Yeah, it would be pandemonium. Right. Now the other thing that I wanted to kind of put in the table was that among the other laws that were suspended and I talked about entire chapters being suspended was the open records law, chapter 92 F. In the second supplementary proclamation and continuing through the sixth supplementary proclamation, the open records laws were suspended in their entirety and even the Office of Information Practices came out and said, okay, what that means, agencies, is that if somebody asks you for records, you can ignore that. What does that got to do with the emergency? That's exactly my question. What does that have to do with the emergency? Yes, it takes time to respond to a record report. And theoretically, that means you have one fewer person able to do emergency functions if the agency is reimbursing functions. And if you're talking about, for example, the Department of Labor, maybe they got a case, but other agencies, it's more of a close call. Well, as you said, a broad brush. What strikes me though is that what he's saying or maybe saying is not clear. I don't know if he's actually articulated this, is that he doesn't want these agencies to be burdened with the necessity of having staff do work. These are the agencies where the staff isn't there. It's not doing work. Whether they're paid or not is another issue, which we talked about. But if they're home and they're not working, they cannot perform. So what he's really saying is since they cannot perform, I'm going to excuse them from performing. I don't know if that really makes sense in times of an emergency. I think they could perform. There are a lot of ways you can actually do stuff while you're having this emergency. So it really doesn't make sense. And it is scary. Can we talk about the scary part now? Let me just kind of finish up with this chapter and then we'll go on to your scary stuff. So in the seventh supplementary proclamation, which just came out, the governor partially reversed himself on that at the urging of several watchdog groups and spearheaded by the Sylvie Law Center. And now the agencies at least have to keep track of the records requests that came in during the emergency. And they do have to respond to them as their resources permit. But they can't just toss it in the trash kind of like they could before. So that I think is a step in the right direction. So what's the scary part? Well, I mean, it's kind of like what Trump was doing with the wall and redirecting funds in the name of an emergency. Now, his emergency back two years ago, that was not an emergency at all. And I wouldn't want to confuse that kind of thing with what we have here. We really do have an emergency. But we do have, I think the burden of connecting the suspension of laws to the emergency. Otherwise you could have an emergency whether it's fabricated or not. And you could suspend all the laws you want and all the taxes you want. And you could rewrite the laws. And you've got to be very careful when you suspend laws. You've got to have a reason. There's got to be a causal connection, a logical connection. And I don't think that he's really made that case. So what we have here is the ghost of Christmas future when a governor or for that matter, a national executive can change things all over the board in the name of an emergency. Rewriting statues left and right and waiting for somebody to try to stop him or her. And if the legislature's not in session. And as you say, even if it isn't session takes a while and it's a political process that it's not quick like the stroke of a pen in a proclamation is quick. Furthermore. I mean, basically what we have now is we have the governor who has the ability to exercise dictatorial power. Yeah. And we got to make sure that there are checks and balances to make sure it's not really dictatorial power. Yeah. Somehow I feel that what's happening in Washington is it has an effect of kind of leaking out, leaking out underfoot into the States. If Trump hadn't been doing this kind of wild proclamation that he's been doing, then I don't think that David E. Gates would have done this either he's taking a cue from what is happening in Washington. It seems to be a blessing, an approval of this kind of conduct. The other thing is where are the courts? Where are the litigators? Where are the agencies, the institutions that would try to protect our constitution? That would say, wait a minute, there was no causal connection here. Why are you just rewriting legislation across the board? You can't do that. Are you aware of any litigation that anybody had started time to test out whether the governor's actions are appropriate or constitutional? Well, our organization in collaboration with the Civil Beat Law Center, Common Cause, and a bunch of others, we were thinking about it, but we wanted to see if we could negotiate a solution first. And that's kind of what Ryan Black's been doing over the past few weeks, trying to negotiate a solution. And at least it gathered some movement because what has to happen if you're gonna challenge the law is that the challenge goes before a three-judge court in the circuit court. So, whatever island the challenge is brought on, you get a three-judge circuit court panel and they gotta figure it out. The law says that the proceeding is expedited, but who knows how long they're gonna take to rule? They have to give the state a certain number of days to respond. And of course, you can kind of see what the state would probably come back with. Are you serious guys? This is an emergency. People called upon to process unemployment claims that have gone through the roof and you want them to do this? Come on. And what court in its right mind is gonna stop? That kind of perfectly reasonable exercise of power. What about the media time? You've written in civil beat. Did you appear in the Star Advertiser? Has anyone else questioned this kind of expansive power? Various people have. Grassroot Institute has, Common Cause has. Common Cause actually was the writer of a letter that was signed by some 50 public watchdog groups and published. But there's been no court action that I know of. Yeah, well, I mean, when you shake it and bake it, what you get is a certain amount of complaint going on about this, which I believe is valid. And the legislature is not in session and they decided to go out of session when one legislator tested positive. I'm not sure that was the right decision or that they could not have continued in session, maybe with the rules of personal contact, social distancing somehow built in. And so no action legally has been taken to reverse any of these decisions which are really questionable. And probably won't be taken until A, sometime later in this legislative session, and B, sometime later when court actions are filed and dealt with, it's not gonna happen right away. So what happens is an executive who has this power of proclamation and suspension of laws. And I'm not sure exactly what the legal authority is on that. That's a research question, I suppose. This executive can act immediately under that color of authority. And then everybody else has to question it much later, long after the decision is made. This is troubling, this is scary. And what it tells me is that if you are an executive and you are going to suspend laws that are not directly connected to the emergency by any logic, then you gotta really think twice about that or you'll be looking a lot like Trump. And I'm very worried that this is setting a precedent. I don't know about other states. Have you looked into other states whether other governors are doing the same thing? Some people have been when the 92 F, the public records laws and the public meetings laws suspensions were announced, several groups came out and said this was the most extreme action taken anywhere in the nation. Interesting, interesting. And we are, I would say lucky that we only have a few cases right now where our curve has never been that high. And, you know, people- We flattened the curve. Well, I don't know if we flattened it or it was flat to start with. I haven't seen the actual curve. In any event, I think we're lucky. But, you know, one thing I would notice, there's been plenty of talk and plenty of reporting. And I mean, Josh Green has been very good about being transparent and being an advocate for public health instead of reopening the economy, which I think that's the right choice and the right sequence. But, you know, we haven't flooded the town with masks. We haven't flooded the town with testing. And in that way, we're similar to the national experience. That's where the effort should have been and still should be by the governor. Instead of suspending parts of tax laws, it seems to me that's what he should be doing and reporting to us. If he wants to make us feel confident in a reopening. But if you say, we got all these problems, now forget about the problems, just forget about that. We're going to reopen, even though we haven't solved the problems. Just because we have luckily flattened the curve doesn't mean that we're out of the woods. We still have to do the things we said we were going to do. And that means masks. That means they're hard to get a mask. An N95 mask harder yet. And how comfortable can you feel if you can't get a mask? How comfortable can you feel when it's really shaky as to whether you can get a test? We're not going to feel comfortable about this until we have those things. We should have tracking too, we don't have tracking. We have, you know, virtually, I challenge the government. We have virtually nobody tracking and no software tracking in this state. We need to do that if we go reopen. And I mean, I'm not sure what his position is right now and today, because it has changed back and forth on reopening. That's another executive prerogative, I guess, another proclamation, I guess, about reopening. You know the status of that, Tom. Again, I think what you've heard and what I've heard is the same, that the reopening is going to come in stages. The first one was set forth in the seventh supplementary proclamation, saying that certain businesses can reopen as of today. And there was, I guess, some disagreement between the state and the counties of Honolulu and Maui on whether that included shopping malls. So that kind of got backtracked to the 15th of the month. But other types of businesses like pet groomers, nonprofits, businesses without a lot of physical contact can reopen as of today. Well, I think there's a lot of pressure in Hawaii to start up a tourism machine, the engine of our economy, so to speak. But that's pretty dangerous. It's dangerous even now in dribs and drabs. I mean, the idea of telling a tourist he can come here on condition that he spends two weeks in quarantine in a hotel room that costs plenty of money and not go out and have no reliable enforcement mechanism to stop him from going out. Somebody suggested the other day that he wear an ankle bracelet, such as somebody who was a defendant and a criminal proceeding would wear. But they don't have ankle bracelets. You'd need thousands of them in order to do that. There's no way to enforce this. And so the result is, yeah, we might earn a little TAT. We might have a couple of people going into the shops, such as might be open. I'm not sure when they're supposed to open. But the bottom line is there's a risk for every one of those people. They come, they're asymptomatic. It's ridiculous to ask them, have you got a temperature? Let me take your temperature. That's meaningless because an asymptomatic person without temperature can be a carrier and shed virus all over our state. So are we being rational about this? All in the name of collecting a few bucks for TAT and collecting a few bucks for the gross excise tax. I'm not clear on the government policy because I don't think the policy is clear. This is very risky business to open the gates again. Well, I guess you want to choose your poison than death by virus or death by starvation. Because for some people, that's what it is. Is it? Do we have that? Do we have that? Death by starvation. I haven't seen that in the papers, but I have seen stories that, you know, people are suffering a lot. They've been living from one paycheck to another. And when that stops, what are they going to do? Well, you know, we've had a number of talk shows about, you know, where is the unemployment insurance and where are those thousand dollar checks? And are those loans really helping these these employees who are out of work, terminated and out of work? Very hard. And it requires a whole combination of things. And you know, the problem is that if you reopen, you have to do it in steps. That's the only rational thing to do. But if you do it in steps, it takes a long time before any significant number of people is re-employed. It's not like they all go back to work the next day. That's not it. That can't be it. And so even if some people are not hungry, other people will remain hungry until we get the whole bubble machine working in tandem as a real economy. So, you know, the problem you described is probably going to exist no matter what we do. Yeah, I mean, it kind of brings to mind, you know, what Hawaii Electric has to do once their big generators go offline. They say it's a very laborious process to restart the thing, you know, restart a little at a time. And then when it gets up to speed, you know, put a little bit more gas into it or whatever they burn. And then ultimately, after several hours, you get the engine running at full speed again. I think that's kind of what we have here. But- That's a good analogy. Yeah, but still, it really, it is kind of a different question from how are you altering the legal landscape? And I think the, you know, the government's got to make sure that, and the rest of us have to make sure that we don't evolve into some kind of dictatorship because that's, I think the temptation, but we have to really avoid that if we want to, if we value our democracy. Absolutely, our democracy is at risk in so many ways these days. And that's one of them. And it's not just that the governor takes liberties now, it's that this condition is gonna last for a while. And if he's able to take these liberties now, it's a precedent for him to take further liberties later. And then it also sets a precedent for taking liberties in the next emergency. So we have to- Or there have been also cases where presidents have kind of let the emergency declaration go on for a long time. I think was complained about it in the Bush administration, George W. Bush. Well, it all comes down to Benjamin Franklin after the secret meetings in Liberty Hall in Philadelphia where they were writing the Constitution. A woman approached him as he was going out for lunch, I guess. And she said, Dr. Franklin, Dr. Franklin, what kind of government will we have? And he said, well-prepared for the question, a republic, madam, but only if you can keep it. And that's what we have to focus on now. Thank you, Tom Yamachika. Always great to talk to you. I hope we can talk again next couple of weeks and catch up on all the events that are sure to happen between now and then. Thanks for having me on the show.