SMALL BUSINESS NEWS _________________________________________
SMALL BUSINESS HAWAII
Creating A Better Hawaii Through Private Enterprise
VOLUME 20, No. 7 * July 1995
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HAWAII BIZ CLIMATE IN "MELT DOWN"
Hawaii continues to lead the Nation in the rate of bankruptcies and to
trail in business recovery. An alarming number of landmark businesses
have shut their doors and hundreds of smaller, no less important
enterprises, are now closed. The State daily deficit continues to
increase with each new government press conference or legislative
hearing.
What's happening? Who's in charge?
Hawaii's business climate is in meltdown mode. This has never happened
before and is not the result of a Mainland Recession, the Gulf War, the
Japanese Yen, or, "12 years of Reagan-Bush." This destruction of
business incentive is Made-in-Hawaii.
Two decades of tax and spend policies have come home to roost.
Government corruption, scandals and non-productivity are taking their
toll - as SBH predicted for quite some time. Worse, those who benefit
the most still don't listen or act on the pleas of hard-working small
business women and men. Government accepts no responsibility yet too
many continue to look to government for relief.
Bankers, property owners, insurance executives, health care providers
are privately alarmed as the negative consequences mount.
There's no fiscal crisis; only a leadership crisis. Hawaii's many
creative, innovative, private risk-takers must speak up and lead.
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"Special" Legislative Session Pau
The 1995 State Legislature adjourned May 1 but an "error" made on the
last day, invalidated 34 appropriation bills - including the whopping
$12 billion bloated budget.
A Special Session was called by the Governor and held June 5-9. The
only other matter acted upon was the readoption of the nursing tax
credit.
House Republicans Anderson, Halford, Kawananakoa, Marumoto, Meyer,
Thielen and Ward, worked hard to keep the special session from being
business as usual. They sponsored measures to restore tax credits to
their original levels and to repeal the onerous 6% nursing home tax.
They supported "STOP'EM - Stop Taxes on Poor, Elderly and Middle
Class," a citizens' group, including SBH, that encouraged saving
overburdened groups from more tax dollars by a budget-panicked
Legislature.
Although the Democrat Majority refused to hear the Republican bills,
voted down their floor amendments and retained most regressive tax
hikes enacted earlier, the Republicans did gain one victory. The Senate
extended the nursing home tax credit by six months, as the House GOP
requested in a floor amendment.
During the Special Session, it seemed the state deficit grew day by
day...and is still growing. Or so they say. (No one has seen the real
data except the Administration). More excuses for tax increases and
still no action on real government trimming.
No action was taken on the pure no-fault auto insurance bill passed in
May, and thought to be unconstitutional. Included in the measure is the
transfer of medical costs from auto insurance to employers' pre-paid
health care plans. State Farm Insurance, the state's largest auto
insurance carrier, launched a massive PR campaign in support of the
legislation during June.
However, The Governor, a former plaintiff's attorney, vetoed the
controversial legislation on June 20. At press time it was not clear
whether another Special Session may be called to override and to deal
with the new fiscal problems.
SBH's Legislation Action Committee graded the regular 1995 Legislative
Session a "D" for some effort, but little lasting substance in
improving Hawaii's hostile business climate. The events since the
Session underline the generosity of that grade.
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Poole Draws Crowd on "Privatization"
Robert Poole, who coined the term "privatization" more than 20 years
ago, and who heads The Reason Foundation in Los Angeles, taled with
members, Legislators and the public on June 8.
85 people, including more than 20 State Legislators, attended the
morning program at the Pacific Club co-sponsored by the Reason
Foundation-Hawaii Chapter, Small Business Hawaii and the Tax Foundation
of Hawaii.
Poole spoke on, "Privatization Now, Good News From the Frontlines," and
detailed current efforts to get government out of business and private
competitive business into saving taxpayer costs associated with a wide
variety of public services.
Two years ago, when Poole last visited, about 5 lawmakers came to hear
his suggestions.
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Chaminade Tax Forum Announced
The annual Hawaii Tax Institute, a one-day seminar, co-sponsored by
Chaminade University Tax Foundation and Chaminade University of
Honolulu, is set for Friday, November 3 at the Hawaiian Regent Hotel.
The in-depth workshop features local and national speakers on a host of
important tax and fiscal topics.
A complete program and reservation information will be included in a
future issue of SB NEWS. For advance information, contact the Institute
at 946-2966.
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SMALL BUSINESS VIEWS By Sam Slom, President, Small Business Hawaii
Swindler, convicted federal felon and former Hawaii Campaign Spending
executive, Jack Gonzales, who escaped from Tacoma prior to sentencing
for fraud, was given protection by the so-called "Independent Nation of
Hawai'i." If Dennis "Bumpy" Kanahele, self-chosen monarch of the
"Nation" wants to be taken seriously, then he should not have made
Gonzales the Nation's "Minister of Foreign Affairs," but Minister of
Finance instead. That way, Gonzales could handle Bumpy's personal
finances the way he (mis)handled the unions' Unity House and individual
investors. This fiasco gives legitimate sovereignty advocates a bad
name. Even Haunani ("I hate America") Trask spoke out against Bumpy's
phoney Nation. Bumpy, created and maintained by the local media, was
an invited celebrity guest at the recent Waikiki opening of Planet
Hollywood. Michael Qseng on KRTR-FM "reported" O.J. Simpson called
Bumpy also seeking judicial protection.
Dr. Jack Lewin is finally gone (to California's HMA) but not before
having a going away fundraiser to help retire his campaign debt of
'94. What's up, doc?
The State Prepaid Health Council has once again ruled against consumers
in general, and business employers in particular, in denying "added
choice" plans and in again changing dependent-coverage status of
existing plans. The State action increases the costs to employers while
lessening choice.
The Council isn't buying Mayor Jeremy Harris' political ploy to try and
stuff five (5) union officials into 6 City Planning Commission posts
just in time for next year's election.
But the Council was wrong in banning smoking in restaurants (5-4), bars
and clubs. Restaurants have complied with a growing list of costly
demands for separate sections, filters, vents, etc. More loss of choice
and individual freedom. But, congrats to Mayor Harris, who vetoed.
Economic harm would occur (as elsewhere) and the question remains, if
government continues banning personal actions where will it lead next?
Mark Twain once said, "It is always easier to reform other people's bad
habits."
Is it just me or was this year's June graduation exercises in Honolulu
bizarre? They included a Kailua High honor grad who was to be banned
from making the valedictory speech because she wanted to thank God
(profanity is ok); some Iolani students told they couldn't take part
because the girls chose not to pay for expensive graduation dresses -
the first time this student-adopted rule was enacted; then a Punahou
Merit Scholar who entered college in her Junior year was refused
permission to graduate with classmates she attended school with for 11
years. What's important here?
The State's Green Party, has elected one candidate, County
Councilmember Keiko Bonk-Abramson, but has demonstrated its political
savvy. Keiko was the Republican swing vote on the 4-4 Council in
December giving Elroy Osorio the chair; in June she switched to help
the Democrats give Elroy the boot and became chair herself.
Island Insurance stopped issuing Workers' Comp insurance and Prudential
cancelled its 7,000 homeowners policies here. Will attorneys and unions
allow real reform?
Shame on Alabama for reinstituting chain gangs and expecting prisoners
to work and be punished. As the ACLU points out, this is "dehumanizing"
and hurts the self esteem of the criminals. We should do more for
them; as we do in Hawaii. Prisoners' "rights?" Give me a break. Prison
is supposed to be punishment for wrongdoing and not fun or comfort.
We've forgotten that for too long, and it shows. Reinstatement of chain
gangs is spreading. Look at the benefits: punishment, work done, plus
some great songs and movies.
In light of GTE Hawaiian Tel's massive proposed rate increases, two
quick survey questions for your business: (1) do you have a single or
multi-line business phone? (2) what is your total interstate access
charge? Would you be kind enough to FAX me the answers (396-1726?) Will
report results later.
Goodbye Hamburger Mary's, Shelly Mazda and House of Adler ("If You're
Not Plagiarizing the Tag Line from the House of Adler Commercials, You
WERE Paying Too Much"), latest business casualties of note.
Congratulations to Paul Casey, newly selected head of the embattled
Hawaii Visitors Bureau. HVB nearly picked another political crony with
no industry experience. Now if the HVB can only cut their umbilical to
the State DBED and finance their own operations.
Early retirements not just in government; Hawaii's big businesses
changing too. Nearly 10% of Bankoh's 4,500 employees are eligible for
early bailing. Future takeover target?
Condolences to the family of Wesley H. Hillendahl, Bank of Hawaii Chief
Economist from 1967-81 (and my former boss). Wes died in early June in
Santa Rosa, California. Wes & I were together for 14 years and wrote
and spoke then about how Hawaii's Political Machine was destroying
incentive, innovation and investment in Hawaii.
Celebrate America's Independence Day; not just another paid holiday.
With government infringing on more of our rights, we should all take a
minute and contemplate protecting our remaining freedoms while thanking
GOD for our liberty and the many sacrifices others made to preserve our
precious freedom. Don't take it for granted; freedom is still the
exception worldwide, not the rule.
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CAN THE CONVENTION CENTER
Guest Commentary By Andrew Rothstein, Appraiser
Gov. Cayetano:
I'm glad to hear you questioning the environmental study for the
Convention Center. Having read the "economic" studies that were used
to justify the project in the first place, I believe that you will find
that they were at least as faulty as the environmental study. If you
don't have the expertise to adequately review the economic analyses, I
am ready go over them with you.
After the problems with the Honolulu Stadium management, the Kohala
Task Force and the construction problems encountered with that Stadium
and the one in Manoa, as well as with the deep draft harbor and the
Capitol renovation, what gives anyone the confidence that the
Convention Center will be built and operated within the parameters
specified? If the hotel industry refuses to find a way to build this
project, despite the fact that they spend millions to install all sorts
of amenities on their own properties or to acquire amenities, such as
golf courses and tennis clubs, on other sites, why is there even a hope
that the convention center will be economically justifiable? How will
we avoid the corruption problems recently publicized about the Jacob
Javits Center in New York?
Selling the site would go a long way towards alleviating our projected
budgetary shortfalls. Does it make sense to start such a risky and
expensive project in the case of continuing revenue problems? If we
had been seduced into starting the rapid transit project based on the
projections of 6.9% annual increases in the excise tax revenues, we'd
be in a real hole today. Once the construction of the convention
center begins, how will the State afford change orders and shortfalls
in the operational projections? Already we have heard requests for a
tax free zone for the center.
Please, Gov. Cayetano, CAN THE CON (CENTER)!
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ABERCROMBIE AND THE ART OF DECEIT
Guest Commentary By Orson Swindle
Hawaii Representative Neil Aber-crombie is on a mission. A true
disciple of the welfare state, his recent propaganda binges ought to
infuriate the people of Hawaii. His antics are those of a frenzied
politician and party in panic. Abercrombie, Patsy Mink and associates
have no new ideas and no acceptable agenda. The American people won't
buy the social welfare state anymore, and that's all these Democrats
have to offer.
Shades of the 60's, old Neil, long hair flowing and rhetoric spewing,
was recently on the UH campus carrying on about student loan programs
that he says are gonna be eliminated. He predicted elimination of the
Perkins Student Loan, the College Work Study Program, the Supplemental
Educational Opportunity Grant, and he says the Stafford Loan program
was going to be more costly to students.
What's the real story here?
There is no current Republican proposal to eliminate the Perkins Loans.
With $6 billion of taxpayer dollars already invested in this fund,
indeed there are some in Washington who believe additional taxpayer
dollars are not necessary in order to preserve the program. President
Clinton is one of those with that belief. He proposed to zero out the
federal contribution to this fund in his 1995 budget proposal. Come
on, Neil, be honest!
There is no current Republican proposal to eliminate the College Work
Study Program - not one dime of it! Republicans are working to save
work study and other financial aid programs by trimming other parts of
the federal budget and eliminating needless bureaucracy and the
in-school interest taxpayers subsidy of college loans. Mr. Abercrombie
is deceiving college students. I guess that's an improvement over
deceiving elementary school kids in the despicable charade over school
lunch programs.
There exist no current Republican proposals to eliminate the
Supplemental Educational Opportunity Grants as he claims. Show us
proof of a single, valid legislative action taken by the Republican
Congress that would suggest such a cut. Folks, Neil can't produce one
because there aren't any.
The Congressman may have come close to the truth on the Stafford Loan
being a bit more costly. Of course, he was trying to panic the
students with his calm, but just budget director, Alice Rivlin, who
would stop the deferment of interest accrual on these loans while the
student is in school. The savings to the taxpayer is estimated to be
over $12 billion. For the average college student, the additional cost
over the life of the ten year loan would be approximately 68 cents a
day. It seems reasonable to have college students pay interest on
their loans just like the working people do. Not in Neil's World.
ust think, we've got this guy for another 17 months!
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WORKER'S COMPENSATION PREVENTION
By Pamela Gottlieb
Worker's Compensation . . . we all have our horror stories to compare!
As employers, Worker's Compensation affects us all. Skyrocketing costs
and employer unfriendly legislation make the current Worker's
Compensation system more difficult to work with. Even one claim can
affect your experience modifier, which in turn affects the rates you
pay for all of your employees, regardless of their classification.
Small claims can have a negative impact on your Worker's Compensation
experience modifier, just like a large claim.
The best defense in this regard is a strong offense, including
preventive programs, policies and procedures, education and
information, and proper dealing with claims - including fraudulent
ones.
The State of Hawaii has a "Presumption Clause," which basically means
that any person claiming to have been injured on the job is believed to
be telling the truth. The burden of proof falls squarely on the
shoulders of the employer to irrefutably prove otherwise. An employee
who states he was injured when no one else was around would make it
terribly difficult, if not downright impossible, for the employer to
prove that it was not the case.
Worker's Compensation containment and reduction starts at the
pre-employment level. Effective pre-screening and interviewing
techniques can help reduce your chances of hiring a "professional"
Worker's Comp collector.
The majority of Worker's Compensation claims occur while the employee
is under the influence of drug or alcohol. In fact, these individuals
are 4 times as likely to have an accident or injury.
Some things you can do to protect yourself:
* In your pre-screening process you should be on the lookout for gaps
in employment. This can send up red flags for you to investigate
further. Use your reference checking process as an additional measure
to reduce your risk of hiring someone with a questionable background.
* A strict "Substance Abuse Policy" can be an effective deterrent to
workplace accidents and Worker's Compensation claims. If you do not
have one currently in place they are pretty easy to start up. Let
employees know that they will be drug-tested whenever there is an
accident or injury. Have them sign a release for authorization of
testing that states that they will be tested for cause, including any
instance of workplace accidents, when they are completing their
application for employment. If your company has a "Substance Abuse
Policy," it is helpful to let applicants know that they will be signing
a release for authorization of testing when they come in for their
interview and that drug testing may be required after the interview.
* Communicate your company's Worker's Compensation philosophy and
expectations to all of your employees. Use posters and visuals that
reinforce your safety message. Tell then that you do everything
possible to create and maintain a safe working environment. Let them
know also that you will investigate and fight all fraudulent claims.
* Do a safety audit of your premises at least quarterly to ensure that
the environment remains safe and healthy. Really look with a critical
eye. Are there extension cords or cables in the aisles? Are the
computer monitors at the proper ergonomic height? Are the exits
accessible and clearly marked? Is the first aid kit and fire
extinguisher up to date and accessible? Is the illumination good? Are
emergency phone numbers posted conspicuously? Are the floors clean and
free of debris?
* Make it a policy that any and all accidents or injuries must be
reported to the supervisor immediately. Make employees responsible and
accountable for maintaining a safe working environment and following
the safety rules. Let everyone know that violation of the safety rules
will not be tolerated and will result in disciplinary action up to and
including termination.
* Do a safety orientation with new employees that covers proper
attire, hazardous materials, general safety rules, safety equipment
rules, machine and equipment operations, first aid procedures and
general housekeeping practices. Safety videos can be very helpful in
this orientation process and are available on the market at reasonable
cost.
* You may want to create a safety incentive program for your employees
that remain injury and accident free. Monetary rewards can be very
effective, as can gifts. These types of programs can go a long way
towards reducing your Worker's Compensation claims.
* When an injury occurs on the job, whenever possible, you should take
the employee to the doctor and wait to obtain the diagnosis from the
doctor. Let the doctor know that you have light or modified duty work
available. If the doctor released the employee for modified or light
duty, have some tasks of this sort available for them to do. This can
save you a great amount of money because it reduces the lost wages that
the employee can claim. One dollar spent for light or modified duty can
save you a dollar and a half in Worker's Compensation premium. If the
employee cannot return to work on the doctor's order, be certain that
you stay in contact with them at least weekly to see how they are doing
and to let them know that you are looking forward to their return to
work.
* Have the employee sign a statement detailing how and why the
accident occurred, and the exact nature and extent of their injury.
Also get a signed statement from their supervisor and any witnesses to
the accident or injury.
Worker's Compensation problems can bite you, but with some preventive
programs, good communication and attention to the situation, you can
take some of the sting out of it!
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HMAA Takes Softball Title
The victorious Hawaii Management Alliance Association (HMAA) coed
softball team defeated Smith Barney, Inc. recently to win the SBH
Softball League Spring Championship. There will be a summer softball
season only if there is sufficient member response by July 15. Contact
SBH at 396-1724. Let's Play Ball!
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The Computer Corner by Melvin Ah Ching
THE WORLD WIDE WEB
The Internet and the World Wide Web are the latest buzz words these
days in computer speak as well as in the general media. Everywhere you
turn, someone or some organization is telling you to "send inquires to
our e-mail address" or "see our home page on the world wide web."
Some of you may be asking what is all this about? Let me explain.
The Internet is the world's largest collection of connected (networked)
computers. This vast computer network contains huge volumes of
information presented in many different forms, of which the World Wide
Web is one.
The World Wide Web (or Web for short) is the hottest part of the
Internet. The Web contains a graphical presentation of information
complete with linked hypertext (text that you can click on to take you
to other information on the web), photos, graphical representations of
company logos, artwork, etc., and even downloadable soundbytes and
quicktime movies.
The web is very easy to use. It doesn't matter what kind of computer
you have. You just need a modem, an internet connection (with the
proper software configuration) and some kind of web browser software.
Once you get this, it is a simple matter of logging on, activating your
browser and you're ready to "surf the net."
There is an estimated 30 to 40 million people worldwide who are on the
Internet, and this number is increasing every day. It would be a safe
bet to say that a vast majority of Internet users have web browsers and
access.
Needless to say, many businesses have established a presence on the
World Wide Web. Just about everything imaginable is being marketed on
the web... books, hotels, cars, computers, coffee, online stores,
television stations, tourist destinations. You name it, it is probably
on the Internet.
There are several Hawaii-based Web sites where businesses can set up a
Web presence.
Small Business Hawaii members have the option of establishing Web pages
on H4, Hawaii's Data SuperHighway, an SBH member business operated by
Robert "Rabbett" Abbett.
Small Business Hawaii has a web "homepage" on H4 that is accessible
through the Internet at http://www.hotspots. hawaii.com/SBH.html. The
SBH site, which is undergoing a gradual state of expansion and
refinement, contains the latest information about Small Business
Hawaii, online editions of the Small Business News, photos, logos and
an online application blank for prospective new members to fill out.
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OTHER ARTICLES COVERED IN THE PRINTED VERSION
Due to space constraints the following articles are not part of any
online issue, but can be found in the regularly printed issue of Small
Business News.
* SBH Board Adopts Revised By-Laws
* Point of Service Plans No Longer Qualified Plans (Health Insurance)
* Dohman Gives Forecast, Tips
* Long Distance Rate Savings For Members
* Small Business Hawaii Members in the News (briefs)
* Letters to the Editor: TAGS, Illegal Toxic Dumping
* Welcome New Members
If you would like to read these articles you can either pick up a
printed copy of Small Business News at the Small Business Hawaii
office, or you can e-mail macpro@lava.net and the requested
article can be sent to you via e-mail.
_______________________________________________________________
About Small Business News & Small Business Hawaii
Small Business Hawaii breaks new ground as it enters the information
age with the online edition of Small Business News. This is a condensed
version of the regular July 1995 issue of Small Business News. The
newsletter is published monthly by Small Business Hawaii, a private,
independent, tax exempt [501 (c)(6)] statewide association of more than
3,000 business firms dedicated to improving Hawaii's business climate
and promoting, educating, and effectively representing small business
in Hawaii, while helping to improve the quality of life of all
residents of Hawaii.
Small Business Hawaii invites you to comment on anything related to
small business issues in Hawaii. Send us your comments and news of
awards, promotions, etc., with photographs (if possible) to SBH by the
10th of the month for the next issue.
Articles can be sent via regular (snail mail) to:
Small Business Hawaii Hawaii Kai Corporate Plaza 6600 Kalanianaole
Hwy., Suite 212 Honolulu, HI 96825
We also accept FAXED articles at: (808) 396-1726 (Sorry! faxed photos
not acceptable.)
You can also E-Mail your articles to macpro@lava.net All e-mail is fax
forwarded to Small Business Hawaii.
For more information about SBH call: (808) 396-1724
SMALL BUSINESS NEWS ONLINE
July 1995 * Volume 20, No. 7
Editor & Publisher: Samuel M. Slom
Directors: Joyce Edwards, Jean Fukuda, Jed Gaines, Kenneth T.G. Lum,
Michael R. Marsh, Bob Sigall, Sam Slom, Jane Tatibouet & John Yanagihara.
Computer Graphics: Melvin Ah Ching
ISSN #0279-8395
Small Business Hawaii's OFFICIAL Web site is at
H4, Hawai`i's Super DataHighwayª
at http://www.hotspotshawaii.com./SBH.html
If you are copying this information for redistribution or web-posting,
please contact Mel at macpro@lava.net for permission. This publication
is Copyrighted 1995, Small Business Hawaii. No part of this newsletter
may be reproduced without the prior, written permission.
________________________________________
Small Business News Online compiled by:
MELVIN AH CHING PRODUCTIONS
Desktop Publishing & Consulting
Phone: (808) 946-2676
Internet: macpro@lava.net or
M.AHCHING1@GEnie.geis.com
END OF DOCUMENT