 Aloha, I'm Kaley Iakina, president of the Grassroot Institute. This year we've noticed an interesting change in the ordinary tax and spend governing policy of our state policy makers. The spending proposals remain, while the accompanying tax hikes often stalled in legislature before the end of the session. But this isn't necessarily good news. The money has to come from somewhere, after all. We're awash with projects and proposals for that that require an infusion of tax dollars. And I'm not just talking about Honolulu Rail. Most of the extra spending will go toward public employee pay increases, which will cost an estimated $400 million extra every year. This is because public workers in Hawaii are expected to negotiate a 2-4% pay increase this year. And that also means a corresponding cost for public employee pensions and health benefit plans. Even when adjusted for cost of living, county employees are among the best paid in the nation. And public sector salaries in Hawaii have been rising five times faster than private sector salaries over the past ten years. Moreover, the increased costs will place a further burden on our state's underfunded pension system, with its unfunded liabilities. But counties don't get much to say at the bargaining table when the matter of employee raises is mostly handled at the state level, which means that state policy makers are writing checks that the counties will now have to cover. Their creative solution? Well, let the counties deal with the price tag and raise taxes themselves. State policy makers have learned that it's easier to move the costs to someone else than to pass another surcharge. So during this legislative session, we saw attempts to garner a portion of the county's property and tourism taxes. The counties opposed state interference with their share of tax revenue, but in the end the counties will have to balance their budgets. And the way they plan to do it is through tax hikes. That's why Hawaii, Maui and Kaua'i counties are all considering raising their property taxes. The mayors of these three counties point to the legislature's decision to reduce their share of the tourism tax by $10 million, and say a tax hike wouldn't be necessary if the counties were to receive their quote, fair share. Instead, they say they have to cut taxes, cut services or raise taxes, and perhaps do a little bit of both. So Hawaii's low property taxes, which are currently 10th in the rich state, poor state index, and help keep our economic outlook afloat, these are likely to go up anywhere from 3 to 7.5 percent to help cover county budgets. And there's still no guarantee the counties won't reduce services. It just goes to show that there's no such thing as a free lunch or a free increase in state employees' salaries and benefits. Somewhere down the line, the taxpayers will be left holding the bill, whether at the state level or county level. I'm Kaley Iakena with the Grassroot Institute, Aloha.