February 2011 E-Mail Update

This is my 2/15/11 e-mail update. I send a monthly e-mail out after the statistical data for the prior month has been posted on the Honolulu Board of Realtor’s website. Our staff automatically adds new e-mail addresses to our database. To be removed, hit reply and send me an e-mail stating that. Please include your first and last name so it’s easier for us to find you in our database.

Like most other states, Hawaii is shutting various state facilities (three elementary schools on Oahu), reducing funding of various programs and increasing taxes in view of budget deficits. Unfortunately, many of the programs being impacted benefit the most needy; e.g., various social service programs for the state’s most needy population will terminate in April to save The Department of Human Services $84 million over the next two years.

Hawaii is one of only ten states that doesn’t tax retirement income, so with our financial problems it would appear to make sense to do that. Gov Neil Abercrombie proposed in his state of the state address to tie retirement income to federal AGI (adjusted gross income) starting at $37,500 for single returns and $75,000 for joint returns which set off widespread hoopla. The difference between Hawaii and other states is the cost of living to live in our 50th state. A 10% state tax would significantly impact upon retirees that are or will be living on a fixed income. Already, some retirees are considering relocating back to the Mainland where the cost of living is much lower. http://tinyurl.com/5tr9ub9 is a letter to the editor (Island Voices) from a USAF retiree that many of you should find to be of interest.

Another very unpopular Abercrombie proposal is to raise the state alcohol tax by 50%. A 50% increase on alcohol would make the Hawaii tax on beer the highest in the nation and the tax on wine the third highest. Opponents state that we need to increase jobs to work our way out of our dilemma. If we increase the alcohol tax, bar owners will need to increase prices on drinks which will result in fewer jobs, as fewer drinks will be served at the higher prices.

Measures to legalize gambling in the islands circulate through the Capitol every legislative session but to date have gone nowhere. Hawaii and Utah remain the only states without some form of commercial gambling. Now, with Abercrombie willing to listen to ideas for legalized gambling to increase state revenues, it appears possible that the ban on gambling could change. A number of bills have been introduced including one to have Hawaii join the Multi-State Lottery Association, which is now operating in 31 states.

Hawaii programs that depend on hundreds of millions of congressional dollars are in jeopardy after U.S. Senator Daniel Inouye (D) said in early February that he would ban “earmarks” for the next two years following a pledge by President Obama in his state of the union presentation to veto any bill that contained earmarks. Inouye chairs the powerful Senate Appropriations Committee and has been responsible for most of the federal earmark money flowing into Hawaii. He has often been dubbed the “king of earmarks and pork barrel spending.” In December the Senate abandoned a $1.3 trillion appropriations bill, laden with about $321 million in earmarks for Hawaii projects.

The city expects to break ground on Honolulu’s rail system shortly, moving ahead with construction of the $ 5.5 billion transit project after receiving final environmental approval from the Federal Transit Administration (FTA) The FTA has issued a “record of decision” stating the project met all requirements of the environmental review process, which has been the largest roadblock to putting shovels in the ground. Critics of the rail have expressed concern as to whether the city will actually obtain federal funding now that Republicans control the U.S. House and are searching for ways to cut the federal budget.

The Hawaii Convention Center has been awarded the 2010 “Best in Business Travel” award for the Best Conference or Convention Center/City by “Business Travel” magazine. This is the third consecutive year that the convention center has won the award. The winners were selected based upon surveys from 8,000 randomly selected “Business Traveler” subscribers. The magazine has ten editions worldwide for a total of over 500,000 readers. The Hawaii Convention Center is the largest meeting and convention facility in the state with 343,000 square feet of indoor meeting space.

Union membership in Hawaii declined by 12,000 workers last year to 123,000 according to the U.S. Bureau of Labor Statistics. Hawaii also dropped from being the state with the second-highest percentage of union members to third-place. In 2010, 21.8% of workers in Hawaii were union members down from 23.5% in 2009. The number of workers in unions declined sharply last year with the national percentage slipping to 11.9%, the lowest rate in more than 70 years.

After three years of planning, Target Corp. will begin construction this spring on a 130,000-square-foot store in Kailua. In January, Kaneohe ranch sold the 311,000-square-foot Don Quijote site to Target despite opposition among a vocal group of residents who fear the big-box giant will change Kailua’s small-time charm, bring more people into the quiet neighborhood and cause further traffic congestion. The Kailua store will be smaller than Target’s four other Hawaii stores and is designed specifically for Kailua according to a Target spokesperson.

Hawaii has relatively low levels of gun ownership and firearms-related fatalities. The Washington-based Violence Policy Center said that in 2007, Hawaii had a gun death rate of 2.82 per 100,000 residents, the lowest in the country. Hawaii also ranked last in 2007 in gun ownership, with only 9.7% of Hawaii homes having one or more guns. However, ownership of guns in Hawaii has climbed over the past five years. 2006: 6,527; 2007: 7,317: 2008: 9,018; 2009: 13,182; 2010: 10,952. The huge jump in 2009 was caused by fears that President Obama would crack down on gun ownership in his first year in office. The Glock-19 semiautomatic pistol allegedly used by Jared Loughner in Tucson is legal in Hawaii; however, Hawaii limits the sale of high capacity magazines such as the one carried by Loughner to ten rounds; his apparently carried 33 rounds.

The Radford High School cheerleaders competed with 150 teams in Dallas in January and ended up winning the national championship in the small coed advanced division . . . Hawaii residents ranked second in the nation in January for the highest average per-person credit card debt at $8,439. Hawaii residents also ranked second in average home mortgage loan balances at $299,339.

The state House of Representatives voted 50-1 on 2/10/11 to pass a measure that would prohibit nonjudicial home foreclosures for five months. The bill no goes to the state Senate for additional consideration. The intent of the bill is to allow homeowners to stay in their homes and work with their mortgage companies through mediation, loan modifications, negotiations or a forgiveness process. The loan dissenter opposed the bill because it would hurt a mortgage lending industry that is already having a hard time clearing home loans. Last year there were 12,425 foreclosure cases in Hawaii equating to one for every 41 residences, the 11th highest rate in the nation.