I IN MY KERCHIEF AND MA IN HER CAP

I IN MY KERCHIEF AND MA IN HER CAP: We admit it. Listening to fiscal and financial discussions- actually anything that falls under the subject of "the economy"- is, for us, like taking a handful of Ambien.

So when we sat down to watch the Kaua`i County Council discuss "Resolution 2011-77... establishing the County of Kaua'i reserve fund and reserve fund policy"- as they did last Wednesday- we carefully ensconced ourselves with a nice blankie and set the recliner on stupor.

The issue isn't new and, although some councilmembers obviously disagree, it comes down to a negative semantic that has caused embarrassment to councils past.

For decades the term "unexpended surplus" has been used on Kaua`i for the amount that was "leftover" when the budget was completed. And that has been an open can of worms slithering around on the council table for just as long, as people ask why there is one since, in theory, the council is supposed to adjust the real property tax rate based on how much it budgets.

In practice, some of it is "appropriated" throughout the fiscal year, as needed, through "money bills" and the rest is left over for the next year's budget.

Enter stage right, Mr. Fiscal Conservative, current Council Chair Jay Furfaro, a former hotel manager who has made it his mission to reform this practice by changing the name from "surplus" to "reserve fund."

Now we've given Furfaro plenty of guff for his habitual bombastic oratory that often baffles the assembled with its pomposity and buffoonery. But although we really wouldn’t know because unless it's the theory of surplus value, we're pretty much unable to comprehend complex money matters, when it comes to fiscal affairs Furfaro sure seems to be able to tell his assets from a hole in the ground.

It seems that surpluses are "out" these days and those who recommend fiscal policy on a national basis prescribe "reserve funds"- specifically in amounts of 20 to 25% of the jurisdiction's budget.

Furfaro has talked about this for years so the resolution in question was, in his eyes, a first step in establishing the correct way to look at the fact that the county will still be collecting more than it spends- or at least the councilmembers will have an explanation for the public that doesn't push the "hey- that's my money you're spending" button as hard.

Now, enter stage left, Councilmember Tim Bynum, the "progressive" responsible for things like the plastic bag ban and the exit- by falling off the stage- of former Chair Kaipo Asing after Bynum challenged Asing's secretive, paternalistic policies in the name of open and good governance.

But Bynum found himself in an unaccustomed slot this year as Chair of the Finance Committee after complaining all last year that Mayor Bernard Carvalho's county-employee "furlough" program was actually a political stunt designed to make the legislature think the county was being fiscally conservative enough to deserve our fair share of the transient accommodations tax (TAT)... or at least that was our take on the effort at the time.

So Bynum, seeing the opportunity to make sure that these kinds of shenanigans were a thing of the past became a Republican For A Day.

As a spreadsheet of sorts was posted on the wall-mounted screen, Bynum read off the "surpluses" going back to 2001... $12 million... $14 million... $17 million... $18 million... until he got to last year, reading off- with the proper emphasis and outrage- $68 MILLION.

Noting that this was quite obviously more than the 20-25% recommended for a reserve fund, Bynum pulled out an amendment to Furfaro's resolution that would set a policy for what to do, not only if the fund dipped below 20% but what to do if it got up above 30%.

And, in true populist anti-tax Norquistian Republican form he stated that if it were to go above 30% his "first priority personally would be to reduce the amount that we're taking from the people who live here to give a tax refund or rebate or lower taxes.

"Give it back," he demanded, "It's not our money. It belongs to the people of Kaua`i."

Bynum went on and the only thing missing from his spiel was the actual use of the phrase "tax and spend."

Meanwhile Furfaro looked like he was going to have a conniption fit waiting for Bynum to finish. And when his turn came he managed to crystallize his thoughts in one booming sentence.

"THIS COUNTY OWES 170 MILLION DOLLARS."

The meaning was clear, although Furfaro made it clearer. We've already spent that $170 million- or at least have committed to spending it very soon. The county recently refinanced its old bonds and took out new ones for all sorts of "capital improvement projects" from sewers to levees to bridges and roads... 81 of them to be specific.

And if anything was going to happen with the (don't-call-it-a) surplus over and above the recommended "reserve," Furfaro said it should be used to pay for what we already spent by paying down our debt faster than the current $4.7 million a year.

In other words, now that we've collected the "tax" it's time to "spend" it.

The issue of whether to set a policy in the current resolution- which is actually non-binding and is only to set up the policy of creating the reserve fund that will later need to be codified in an ordinance- or whether to include the policy for what to do if the fund is over or under the Goldilocks range of 20-25%, the paradigm shift of the two councilmembers acted on us like half a dozen cups of espresso, the idea of a nap now only a dream.

While we don't particularly "get" this high finance stuff, we think the means of production should be in the hands of the proletariat- or whatever the 21st century equivalent is. But we usually "get" the politics.

Except in this case we've got Furfaro, the ultra conservative- at least for Kaua`i where conservatism usually goes to die- attempting to spend the "extra" already collected taxes while our classic liberal wants to give it back.

It was a good thing that Carvalho's weekly "Together We Can" snooze-fest was coming up next or we'd never have gotten any sleep.

LET’S PLAY STORE

LET’S PLAY STORE: Our bent toward local issues and politics is, in part, derivative of years of thumping head-to-wall regarding concerns over which we ultimately have no say or sway.

But one little matter that’s been sticking in our craw every time it’s thrown out of the spin cycle of the “Bush tax cuts for millionaires” debate is the Republican claim that, since many of those fat cats who will continue to receive the tax cut are business owners, if they have more money they will create jobs.

This has to be the most moronic thing we’ve heard out of Washington pols in a long, long time... and that’s saying a lot.

Where exactly are these business owners who think “oh, look- I have all this money I made and so I’m going to spend it to hire someone I otherwise don’t need?”

We’re not god’s gift to entrepreneurship but we do understand enough to know that you hire people for one reason and one reason alone- that there is more demand for your product than you can currently supply.

If you’re happily making your widgets and find that people like your widgets so much that they are ordering twice as many as you alone can produce, you’d figure out how much you would make if you fill those orders. Then you then figure out how much it would cost to hire someone to stand next to you and help you make widgets.

Then, if the cost to hire your employee is less than the amount above and beyond what you alone make, you hire someone. Otherwise, you don’t.

And, unless you’re a total imbecile- or your wife is badgering you to take your good-for-nothing brother-in-law on as a partner- you don’t just hire someone because you’re making too much profit.

Because that’s what that “tax cut money” is- it’s your profit that you already made, on which you paid income tax.

It’s sitting there in the back and has no bearing whatsoever on whether you would hire someone.

The same goes for triple the widgets or a thousand times more widgets. You hire people to supply the demand for your product or service- not because you have “extra” money sitting around.

Where are these business people who go out and hire more employees simply because they are making too much money?

The answer is that there aren’t any because they all went out of business because they obviously had no business being in business in the first place.

If you’re really a good old capitalist pig and you’re making more money with less employees than you would by hiring people you wouldn’t hire anyone no matter how much you are making. As a matter of fact, if you could make more money by firing people you’d do that.

There, America. Done. Problem solved. Your welcome. We now return you to your regular assortment of local idiots and crooks, which is already in progress.

HAIRY PLUGS

HAIRY PLUGS: You’ve gotta see yesterday’s long delayed non-discussion of county furloughs during yesterday’s county council’s budget hearings to believe it- or you can read the rather boring, dry account that has become the hallmark of new government beat reporter Léo Azambuja in the local newspaper.

But while defender of the realm Councilperson Darryl Kaneshiro- who well may be the first councilperson ever to be voted out of office for a second time this November- did his best to usher in the age of nefarious and keep the sunshine out by screaming down Tim Bynum and Lani Kawahara when they wanted to discuss the Mayor Bernard Carvalho’s furlough-dependant budget, we have no idea where the two dissidents were going with the discussion.

Because the real issue isn’t fiscal its political.

Many people ask us why we don’t run for office. The answer is simple- we believe in more government regulation and higher taxes. Who’s voting for that?

In this case, after services have been cut well into the bone at both the state and county levels, only a handful of screamin’ meemie wing nuts are actually asking to cut essential government services further.

In the case of the county raising the real property tax rate it seems like a no-brainer to all but the “where’s my free lunch” crowd.

For the uninitiated, counties in Hawai`i are given only one way to tax people- through real property taxes.

Each year two things happen at budget time. First the real property division office adds up the assessed value of all properties on the island. Then the mayor proposes a tax rate which when multiplied by that amount yields how much revenue the county can expect to take in.

That amount must at least balance with the expenditures in the budget.

For years, as valuations have skyrocketed in the housing and real estate market, a handful of people have screamed about their property taxes doing the same. But the council, in a political move that everyone recognized as disingenuous double talk, has claimed that they didn’t raise the property tax “rate” while the budget practically doubled.

And of course technically they were right- although revenues have almost doubled the “rate” remained the same.

So now that the bottom has dropped out of the assessment side of the equation the revenues have plummeted too- only the tax “rate” remains the same in this budget.

The system was set up so as to use the rate as a tool to balance the budget. When assessments are up, the rate goes down. As assessments go down the rate should go up.

Only the council has played this little “I didn’t raise your taxes” game for so long that the “big lie” has worked and people only look at the rate to tell if their taxes are going up. In reality if they were to raise the rate to require that people pay only what they paid last year- or even an average of the last few years- there would be no need for furloughs or vacant or dollar funded positions which are bringing the wheels of county services to a halt, according to those who provide and use them.

In the 90’s and early ‘00’s famed original “nitpicker” and activist-supreme Ray Chuan made sure to mention this at every opportunity making it an issue that eventually led to an ordinance that set a 2% cap on actual yearly real property tax payments. It came as a result of the pressure of the “`Ohana charter amendment” a few years back that, although it was struck down by the state supreme court, was. in part. implemented by the council.

People, notably then councilperson Joann Yukimura, warned at the time that when the boom ended and the bust came it would only take as little as one year of lowered payments to cause revenues to go so low that the mechanism for raising revenue in the charter- upping the rate- would be ineffective to fund essential county services.

That’s essentially why the supreme court ruled as they did.

This is that year, although the trend started last year. If the rate is not raised to account for the decreased assessments this year- and probably again next year and maybe the year after too- eventually we will get to a point where, assuming the housing bust continues, no matter what we do we will never be able to fund essential services like fire, police and life guards.

The list of similar repercussions is endless.

Though furloughs are the most visible “cut” in this year’s budget we’re also delaying hiring and maintenance of things like equipment and roads that will exponentially catch up with us very soon- especially if we can only raise tax payments two percent a year after they’ve suddenly dipped 10 or 20 percent.

It’s time to raise the real property tax rate and put an end to all these idiotic penny-wise and pound-foolish cuts. But that will take political will and courage especially in an election year- something that has traditionally been in short supply on Kaua`i.

THE BITE

THE BITE: We’ll leave the unethical culture on Kaua`i on the back burner today as we take tongue to glue and mail off our fare share to sustain the U.S. bombing of brown people across the world until they hate us so much they’re willing to blow themselves up in our midst.

But demilitarization isn’t what’s on the minds of the handful ditto-heads and mindless, sociopathic, so-called “tea party” participants.

There was this fat Rush clone on CNN this morning who was bedecked with an “Obama is a fascist” poster with a photo-shopped Obama-as-Hitler mock-up and when the reporter asked three of four times “why is Obama a fascist” the guy kept screaming “because he’s a fascist”.

And he was the most articulate of the crowd.

What she should have asked was “how did you get here today?. Was it in a car subsidized by taxes or on the road taxes paid for. Perhaps you flew in to a tax-supported airport?”

He sure was standing on a taxpayer built sidewalk and the police presence that surrounded and protected them was paid for by... well, you get the point.

Funny you never hear that type complain about the tax money thrown down the rat hole of “defense”- a fancy ironically-opposite euphemism meaning violent imperialism.

Nope they complain about “welfare queens” and the waste of money on social programs and the safety net they are presumably one or two pay checks away from.

But at least most of these creeps are, if too dumb to live, consistently wrong about everything. What really bothers us when we hear normally rational people demand lower taxes saying “I’m a fiscal conservative and a social liberal”.

Oh, you mean you’re a thief. You want everything the government provides but don’t want to pay for it.

Actually through a strictly progressive taxation scheme the 90% of the people who have 10% of the money could go tax free if we properly taxed the 10% who have 90% of it.

But these folks aren’t talking progressive taxation. As a matter of fact they apparently have a stake in making the rich richer thinking in their own demented way that they will become one of the rich despite the telling sign of the intellectual bankruptcy of their world view.

But why single them out? Today’s news portends that the folks at the legislature aren’t exactly Einsteins or brave enough to progressively raise taxes more than a smidgeon and are apparently rather intent on passing tax increases that hurt the poor the most with increased taxes on goods like tobacco, alcohol and fireworks along with a proposed sales tax for the counties and even a raise in the state excise tax.

All this got us thinking about what exactly happened to the progressive taxation scheme and the social “safety net” the government provided with the taxes it collected until about 30 years ago.

It all started with the “privatization” of government services and the reign of the real fascists, by definition, under Ronald Regan, when the state and corporate worlds began to merge as never before.

Instead of spending money directly serving those who were in need they began to set up private corporations, many of them non profit, to take on these services- and they fully funded them.

The premise was that no one was giving the government money voluntarily so let’s leverage the money by giving it to an organization that can also fund-raise and thereby get more bang for the buck.

But what actually happened- something many of us foresaw at the time- was that that government funding was the first thing to be cut whenever the war machine and the service of corporate agendas demanded more and more and more.

In addition every time there was one of these “financial crises” the first place the corporate sycophants in office looked to for a cut was those now private non-profits who were by then taking on the lions share of social safety net programs.

After all- they could always raise more private funds.

Meanwhile the real wages of the working class were slashed to the point where, while one person working one job used to be enough to support a family, now two people working two jobs doesn’t cut it.

All the while, due to increased production with no recompense for the workers who produced the wealth, that 90%-10% ratio we mentioned above was pushed to more like a 95%-5%. Workers were seen by that 5%, not as essential to their business and the fiscal health of the economic system but as an expendable burden on their quest to move the ratio to 99%-1%

If we shirk off the chains of the fascist corporatization of government and cap the financial bottomless pit of an insatiable saber-rattling, war machine we’d have plenty left to provide living wages and even provide health care for all without paying another nickel in taxes.

And if we collected taxes only from those with the ability to pay we’d get that “free lunch” the “fiscal conservative yet social liberal” wants so badly.

Put that tea in your pipe and smoke it.