 The Think Tech Hawaii Broadcast Network and Happy New Year. I'm Kelea Akeena, President of the Grassroot Institute. Today is January the 4th, 2020, and the Hawaii State Legislature is back in session. Just today, in testimony said to the House Ways and Means Committee, Governor Ige has proposed breaching the state spending cap in fiscal year 2021 by another $80 million. And this won't be the first time. Since 2012, as you know, we've reported, Hawaii lawmakers have exceeded the state's constitutional spending limit to the tune now of $1.4 billion. Today, I'm delighted to have with me state legislator or former state legislator, Barbara Maramoto. She was a delegate at the 1978 Constitutional Convention that established the spending ceiling. We're going to talk with her and get her perspective on why it was established and what the implications are. Our conversations will explore the dangers of Hawaii's government spending and what should be done about it. Now, let me tell you a little bit about Barbara and then introduce her to you. Barbara Maramoto was elected several times to the Hawaii State House of Representatives starting in 1978. She represented Kaimuki, Waili, and Kahala. Maramoto is a Republican and she served as the House Minority Leader from 1984 to 86 and again from 98 to 2000. In a tribute written by then state Senator Sam Sloan, Maramoto is described as a lawmaker, quote, best known for supporting small businesses, children's safety, tax reduction, and fiscal reform. That was Senator Sam Sloan. Well, Barbara, welcome to the program and a happy new year to you. Thank you for joining us today. Happy new year, Kelly. Glad to be with you. Oh, I'm so delighted looking forward to learning from you. You know, in 2012, you decided not to run again for another term and retired from the state legislature. What changes have you seen in our state legislature since the time when you were in office? Since the time I first was in office, that was a long time ago, in 1978. I served for 34 years. So that was, I've seen a lot of changes then and since then. And right now, I'm glad I'm not in the legislature. It's a very tough year for the people who are dealing with the state finances. Indeed. What about bipartisanship? You've seen a reduction in the number of Republicans, a significant one since you were in office. What does that portend for our state? You know, that's a good question. The house is pretty partisan. It's a larger body, so they tend to be more structured. And the Senate being only 25 members, they tend to be more personal. And the same with the city council. So like today, we see Andrea Tupola, Andrea Tupola, who is now a floor leader. So she's serving in the leadership of the city council. The house was pretty much partisan. So it was very difficult for Republicans to get bills heard and to get bills passed. So, you know, and I like to work collegially. So, but less, I think today, it's more polarized than ever. I think following the federal pattern of the state too, is very much polarized between the two parties. And it's a shame to see that. Well, certainly that makes it difficult for the minority party to get things done. But beyond that, you know, whether it's the Republicans or the Democrats who are the dominant party, what are some of the problems of there being primarily one party state? Well, I think you see certain special interests having stronger sway. And I think what gets lost, especially with the lack of Republicans and conservatives, is small business really doesn't have a very strong voice in the legislature. And it's very difficult for businesses to survive in a state with so much paperwork and high taxes, high land costs. And I, you know, I'm preaching to the choir, but you know what I mean, Kelly. Well, absolutely. Now, before you were a state legislator, you were a delegate to the constitutional convention of 1978. And when I think back to that, when I was not really involved much in adult politics at the time, I was still finishing high school, it was an historic event. There were some long-term changes that were put into motion, not the least of which was the formation of the Office of Hawaiian Affairs. People talk about that a lot, but there was much more than that that impacted our state. And it must have been very exciting when I think back to that time, for you, you were not yet in politics, you were not yet a legislator. What motivated you to get involved in the constitutional convention and what was it like back then? Well, you know, when I first had children, people were telling me, you've got to have your child go to a private school, not a public school, private schools are better. And I had gone to school in California and I attended public schools and I went to the University of California. And I thought public school should be as good as private schools. I thought that we could improve public education system here in Hawaii. And we had a one-party state. So I thought, you know, I really should get involved in the legislature. I was a volunteer during the legislative session. I got hired by Senator Fred Wolffing for several sessions. And then I was hired full-time during session by Senator John Carroll. And after that, I was hired into the Senate Minority Research Office by Senator Pat Psyche at the time. So I really cut my teeth in the legislature and I could see several problems with a heavily one-party state, heavy expenditures on the state part, heavy taxation, not enough attention to small business. So that's why I got involved. That's why I ran for con-con. Do you think it's time for us to have another con-con? People are bringing that topic up all the time. We didn't go with the opportunity most recently but it'll come up again. What would you say are the pros and cons to another con-con? Well, you know, I think there could be another con-con. I introduced a proposal which actually passed in 1978 which says we should put the question up on the ballot every 10 years, shall we have a constitutional convention? And the first two times that it was proposed, given to the electorate, the electorate voted it down. So the people apparently didn't see a big need for a con-con. So if you have one today, it's hard to say what would happen. It's still a heavily one-party state. So I think the outcome might be more liberal rather than business-oriented conservative. Well, back in 1978 at the con-con, you proposed a measure that would work its way into our state constitution and it basically limits the spending that the legislature can do. Can you talk a little bit about that proposal and what motivated you to introduce it back then? Yes, well, excuse me if I get into the weeds a little bit but you know, in 73 we had, we're showing deficits the spending was, revenues were down but our spending was still up. We have a very strong government governor system in Hawaii whereby the governor can restrict bills that have been passed. He doesn't have to release the money to spend, authorize some of the bills. So governor Arayoshi at that time restricted a lot of money. And actually, you know, it was, well, it was a conservative thing to do. There were some repercussions but I again, we started picking up spending as the seventies progressed and I thought there should be some check on how much we could spend. So I ran for the constitution convention and when I got in, I had the first proposal in for to change the constitution to reflect a general fund spending ceiling. And I think most people thought it was a good idea since it did pass. I mean, not without a lot of trouble but it was based on changes in total personal income which is a national figure put out by the Department of Labor, Bureau of Labor Statistics. So if you take an average of the past three years the increases or decreases in total personal income then our budget should reflect that. We were able to go up a little higher or you have to lower expenditures. So this is the way it passed and it was later flushed out in the vital legislature. Now it makes sense to have an expenditure ceiling and but when you go over it, the legislature determined you have to say which bills of these are taking you over the expenditure ceiling for the general fund. Well, the legislature apparently did not want to do that. So the powers that be put that language into every bill or became boilerplate language. Every single expenditure bill said this measure will take us over the expenditure ceiling. Now that's okay as long as the legislature passes it by two thirds vote but everybody votes for the budget, right? It's like you're afraid to vote against it because somebody will say, oh, you voted against this children's bill or this one that affects senior citizens. So most people vote for the budget and there might be one or two Republicans that decide to vote against it. But we have been exceeding the spending ceiling every budget session. But the good thing is that you're able to know what the ceiling is and how much you're going over it. So that's a good exercise. Well, since 2012, our research shows we have been exceeding the ceiling by a total of $1.4 billion which is quite a bit the rate of state spending per capita has gone up significantly since the time you were in the contact. So what was the difference back then were the delegates and were state legislators more sensitive to overspending than they are today? Has the moon changed from the part of the public and or the part of the legislature? I really can't say too much. I'll give you a definitive answer on that but we had good leadership from the tax foundation headed at that time by Fred Benyon and working for him was local Colapa. You may recall that he was an excellent resource for legislators. And they were advising us that spending was climbing too fast and we must put some checks on it. A lot of people agreed with us and so this is why we were able to enact a spending ceiling. Well, we're going to take a quick break, Barbara and come back and finish up our chat about the state spending cap and get a little more insight into that. My guest today is Barbara Marmoto, former state legislator and we'll be right back on State Tech Hawaii for Hawaii Together. Don't go away. Welcome back to our conversation former state legislator Barbara Marmoto. We're talking about spending cap that was enacted back in the 1978 Constitutional Convention or at least proposed then went on to become state law. Now we've seen since then the state legislators spend far more than it actually brings in and that's put us into a very difficult situation with a lot of debt. But as I returned to Barbara now, Barbara, now it may not be an easy thing to talk about spending caps, especially in light of the impact of the coronavirus and the massive impact it has had on the economy. It looks as though a lot of legislators and our governor are looking to if some way spend far more than we bring in out of the necessity of dealing with the coronavirus impact. What are your thoughts about that kind of spending? You know, we're really in big trouble these days. I think it's nice to have spending caps and control our spending, but in this pandemic atmosphere, everything, all the rules go out the window. I think last session, the legislature actually used bond money for expenses. Correct me if I'm wrong, but did they use it for the health fund, which is a pay-as-you-go insurance for our retirees? Well, unfortunately, the governor has proposed and enacted a plan to stop paying down the unfunded liability portion of our EUTF health plan. And so we're gonna go further into debt on that. There seem to be basically two mechanisms that our government is looking at to deal with the exorbitant costs that we have today. One is to borrow more money and another one is potentially to tax people. And so what you said is truly it's a tough time to talk about the spending limits, but we have to think ahead in terms of the long-term impact. What do you think the long-term impact is of continuing to steep our spending limits? Well, I think we will go into debt and I think furloughs will have to be enacted in one form or another, although I hate to see it enacted on teachers because what happens is our children suffer from lack of education. But everything's out the door. I don't know what's gonna happen, we'll have to borrow. And unfortunately, like the federal government, Hawaii's not able to print its own money. So you tell me how they are gonna solve this problem. They're gonna have to slash and cut and burn and it's gonna be quite painful for many people. Well, as you know, at the Grassley Institute, we've tried to study this problem with best practices across the country. We've come up with the roadmap to prosperity which has 23 proposals as to what could be done. We believe, and I don't really wanna you today show talk so much about it, but we believe that there are alternatives taking on massive debt and taking on and increasing our taxation of our people. But as you mentioned before, there's some pain involved. You talked about furloughs. I'm just thinking there's no easy way in this environment now to cope with the drop in revenues for the state. We hope that the state can enact processes to encourage the business climate and that that would result in more tax revenues. But we're talking about a lot of time. If you were in the legislature today, how would you handle that conflict between the pain that we have to go through now and the pain we may suffer later on in the future? It's a real tough call to make, isn't it? I would have no idea on how to handle it. You can't spend money you don't have. So you will have to make cuts. And I don't see any other way to do it. You will borrow up to the hilt and that you must do, but eventually we'll have to pay it back. The last thing I would like to see are tax increases. Well, the governor recently presented his budget adjustment with a billion dollars of quote, unquote, other revenues. We did a little research on that and asked his office about it and they referred us to an interview in which he had said that those other revenues are likely to be tax increases. Where do you think another billion dollars of tax or how do you think another billion dollars of taxation is going to impact our business climate in Hawaii? Well, I think it's really gonna hurt. And I noticed what legislators tend to do rather than pass tax increases, they do away with tax credits. And so I'm afraid some tax credits will be disappearing. And I don't know how many you could get rid of to realize enough funds to keep us existing. It's really terrible, but I'd like to see our businesses come back. I'd like to see the vaccine take hold and so that our small businesses can open up again or small restaurants. We're just dying on the vine here if we don't do a little business, but our tourists come back. I know it's dangerous, but the vaccine is on its way. Cutting costs is something that is truly painful. One of the ways the state might consider cutting costs would be to privatize some of the businesses that the state operates. For example, as you know, over the last five years, we've been able to see some of the state hospital system transition from the public sector to the private sector, especially Mali Memorial Hospital, which is now run by Kaiser. And it's on a pretty good track to being coming profitable. There are other proposals that have been out there like privatizing the management of the airport and so forth. Or even what the judiciary does, it's allowed to hire its janitorial staff from the private sector and they save at least 25%. Do you think this is a direction that could be fruitful in saving some money for the state? I would support privatization of more functions, but you will get a big fight on the part of certain unions. So it's gonna be an interesting battle, but I think the legislature must undertake, consider some functions that should be privatized. Well, you know, that brings up the broader issue of statesmanship when it comes to bringing all parties together. Just as you mentioned earlier, furloughs would be difficult for teachers. We definitely know that that's a sore point for the teacher union. Any thoughts on how we can bring disparate parties such as unions that defend the rights of their union members and others all together so that we can somehow reach a happy medium. At least something that allows our institutions like the schools and other institutions to survive and to do well despite the cuts that have to take place. How do we bring people together at a time like this? Well, over the collective bargaining table, it will take some tough negotiations and there's a lot of bad choices really, but something has to be ironed out just so that we could go forward. So I think it can be done, but it's the art of the deal. So I hope that there's some good negotiators out there. Well, we've been through so much in 2020. It was an unprecedented year in many, many ways. What are your thoughts about 2021? What prospects do you think we have in Hawaii moving forward? Well, as I said, I'm hoping that that vaccine will take hold and we will be able to reopen our ports and our airports and we don't have highways here, but it'd be great to be able to get back to normal. And it's gonna take a while, but we could do it and it will happen, but it's just a lot of people will be suffering meanwhile, lost jobs and a lot of people who are gonna suffer from COVID, but we will come through this eventually. I can't say exactly two years, three years, but it's gonna take a while and I'm looking forward to things being normal again. It'd be wonderful. That's right. They definitely will be a very new normal. Going back to the Constitutional Convention in 78, the 70s were a booming time for our tourist industry. What I recall is the Wai'i-Fa'u and how it brought people from across the planet through beautiful Hawaii and those images of our islands in the Ilikai hotel and so forth were so prominently marketed across the world. But at the same time, I know Governor Ariyoshi and our other government leaders were saying, we've got to diversify our economy because tourism cannot be the only industry, although it will always be a dominant industry. I think that's one of the things we've seen in 2020, the ramifications of not having diversified our economy. What are your thoughts about that discussion of diversifying the Wai'i-Fa'u beyond George? A very good idea. I think the state could assist in that. I'd like to see the Department of Economic Development and Tourism come up with some proposals and really support new businesses and people opening up their lands for development, not necessarily a casino, but I always wanted to see more schools in Hawaii and I thought state could offer inexpensive land or tax exemptions. And we could build schools from different Asian countries. We could attract students from all over Asia. And so I'm looking forward to new ideas like that and new industries, more high tech. And I think we could do it. I mean, a lot of people are working from Hawaii now because they're just using their laptops and going to work. So we should encourage that and come up with some bright ideas. We need some new young people, fresh ideas, and we could do it. That's exciting to hear. Earlier, you alluded to the fact that the two-party system, a more robust balance and competition between the parties, would help business, it would help the business climate and that certainly could help diversification of the economy. Any thoughts as a senior state's person in the Republican Party? Any thoughts on the current condition of the party in Hawaii and the directions it might take in the next few years? Well, I would certainly like to see some new exciting leadership emerge from the Republican caucus. I haven't been too close to them, but I supported Lauren Cheep, Matsumoto, when she first ran. Jean Ward is an old friend. Valo Kimodo is an interesting young person. I have really not met her, but I've supported her. And so I'm expecting to see, oh, Bob McDermott. Yeah, he's always been great. I'm very sad to see Cynthia Thielen retire. She was a cohort spouse with me. And so we've got to encourage them to speak out and come up with some good ideas for us to survive. Well, thank you for spending time with me today at the beginning of the new year. I appreciate your insight into some of our history and the development of our law here in Hawaii. And I wanna thank you for your service, your many years of public service that has continued even after your years in office. Thanks, Barney. Well, very four years was plenty. But I do appreciate what the Grassroot Institute is doing for our state. You're a lone voice in the wilderness. Thanks, Kelly. Thanks very much, Barbara. My guest today has been former legislator Barbara Maramoto. And I hope you've enjoyed our time together on Keiwiki Hakina on Hawaii Together on the Think That Hawaii broadcast network. Until next time, aloha.