Just because you know there is a problem and just because you have a solution, doesn’t mean the problem is solved.
Even as governor-elect, David Ige knew one of his big challenges would be getting the state Tax Department to function and collect more money.
He didn’t mean new taxes; just get the money already owed the state.
“First we need to modernize the tax-collection system, it is so old and antiquated, and I am convinced that hundreds of millions of dollars of taxes already owed is being lost. We need to finish that as soon as possible,” Ige told me in an interview shortly after his November win last year.
As resident IT nerd for the state Senate and then as Ways and Means chairman, Ige has been more knowledgeable than most on the problems that nag the Tax Department.
“I will implement the Tax Department modernization project, which would result in a significant increase in additional tax collections,” Ige promised while campaigning last year.
“Another way to balance the budget is to collect taxes owed. Rather than raising taxes, I will secure the necessary resources for the state to collect those back taxes.”
Hawaii’s Tax Department has been an expensive bungled mess for years. Back in 2010, the state auditor noted that in 1999, the department began a $51 million “effort to replace its aging computer system.”
In five years, the Tax Department finished six “major system implementations,” followed by 13 “project enhancements,” the auditor said.
Not content to rest with its implemented enhancements, the department came back in 2008 to spent $25 million more for a new delinquent-tax-collection system.
“Long-term planning for these projects was minimal to non-existent, and oversight was left to managers with no formal project management or information technology background,” said the auditor.
In all, between 1999 and 2011, the state spent $87.5 million tax dollars to “modernize” the Hawaii tax system.
So how did the folks down on Punchbowl Street do with this festival of cutting-edge high tech?
“The existing system is so antiquated it cannot even handle scanning paper tax forms,” said Maria Zielinski, Ige’s newly named tax director during a legislative hearing last month.
Ige walked into the Governor’s Office thinking: “It is not about a whole ton of money being invested; we can make a relatively significant impact with a relatively small investment, as long as we are smart about it,” as he said in an earlier interview.
So now the Tax Department is again attempting to drop the No. 2 pencils and pick up computers that actually work, but on a slower pace.
Zielinski told the legislators that the state is moving ahead with two $30 million projects. The new vendor has performed similar tax programming and development in 21 other states, Zielinski said.
The project is divided into two portions, so if it isn’t working, the Tax Department will not ask for the money needed, she said.
Those assurances, however, were not enough for former Senate president, Sen. Donna Mercado Kim, who at a hearing last month warned that the Tax Department risked going too quickly.
The new vendor, Fast Enterprises, LLC, should not only install the software, but stand by and make sure it works before getting paid, Kim said.
Not just keeping your eye on the prize, but getting the prize and putting it in your bank account is always good advice.