State lawmakers approved hundreds of millions of federal CARES Act expenditures Friday, including $36 million for an airport public health screening system they said is needed to reopen tourism.
The move comes as the state hit “green” on a draft color-coded “playbook” to reopen more parts of Hawaii’s economy.
There’s debate on when Hawaii will be ready, however. If state legislators have their way, the effort won’t be guided by the Hawaii Economic and Community Recovery & Resiliency “navigator.”
The $10 million earmarked for the navigator instead will go into a rainy day fund, according to Sen. Donovan Dela Cruz and Rep. Sylvia Luke, chairs of the House and Senate Special COVID-19 committees.
Now it will be up to Gov. David Ige to find another funding source for his pet project. Ige issued a proclamation April 8 appointing Alan Oshima as the Hawaii Economic and Community Recovery & Resiliency navigator.
“The work of the navigator is essential for Hawaii’s recovery and I am committed to supporting the efforts,” Ige said Friday when asked to respond to the Legislature’s decision not to fund the post.
The navigator concept was a tall order from the start. Oshima’s esoteric job title came with a lofty goal to direct “a collaborative effort to come up with a three-part strategy to address the economic and community impacts of COVID-19.” Oshima, who is on loan from Hawaiian Electric Co., where he is the senior executive adviser, was volunteering as the state’s navigator this year. Oshima planned to spend $9.1 million in consulting contracts, with the bulk allocated to Boston Consulting Group.
BCG’s best known ties to Hawaii are as a previous consultant for Hawaiian Electric. It also served as a consultant for NextEra Energy Inc. when the company was proposing to acquire Hawaiian Electric Industries. Ultimately the Hawaii Public Utilities Commission rejected NextEra Energy’s application and the merger didn’t go through.
State lawmakers questioned why nearly all of the navigator’s fiscal year 2020 budget was going to out-of-state contractors, who they said would take their contract profits and expertise with them when they left Hawaii.
“There really wasn’t a plan. The plan was only to pay for consultants,” said Dela Cruz (D-Mililani Mauka, Wahiawa, Whitmore Village).
State lawmakers also wondered why more of the navigator’s needs couldn’t be filled in-house by the state Department of Business Economic Development & Tourism, which bills itself as “a resource center for economic and statistical data, business development opportunities, energy and conservation information, and foreign trade advantages.”
It didn’t help that just five weeks into the effort, Oshima was already seeking funding for a new department that would run after the Dec. 31 deadline given to the state to spend the $863 million that it got from the federal Coronavirus Relief Fund.
Oshima wanted an additional $937,250 — with nearly 60% of that going to payroll — to cover the operating budget through fiscal year 2021. The forward budget would have created a new department with five positions costing $534,250 in salary and benefits. Oshima’s navigator position, currently a volunteer endeavor, was budgeted at $120,000.
“We are doing the startup on a shoestring, but for a sustained effort, some staff will be needed beyond the support provided by DBEDT, other state departments and agencies, as well as volunteers,” Oshima said in a statement Friday.
It’s unclear what will happen now. The state already has received some of the services in Oshima’s consultant budget, including communications support and the creation of its website, recoverynavigator.hawaii.gov.
Sen. Glenn Wakai (D-Kalihi, Salt Lake) said the contract for BCG hasn’t yet been signed.
“BCG is working with about seven other states. Their contract with Hawaii is the most expensive,” Wakai said. “It’s a waste of money.”
BCG has run into similar criticisms in other states, including Connecticut, where Gov. Ned Lamont was forced to defend a $2 million contract with the private consultants.
Wakai said the responsibility of the navigator now falls to DBEDT.
“We’re going to rely on DBEDT and (DBEDT Executive Director) Mike McCartney to take us to the promised land,” he said. “Right now, the navigator is totally their kuleana.”
The House special committee on Friday also recommended increasing the original $20 million budget for thermal screening at Hawaii’s airports to $36 million for a system Luke (D-Makiki, Nuuanu) hopes could result in Hawaii “leading the nation.”
Instead of creating centralized thermal scanning stations for arriving passengers, the House subcommittee endorsed a plan that includes taking photographs with thermal scans at gates for arriving passengers, to reduce the risk of passengers spreading the new coronavirus as they pass through Hawaii’s airports.
Luke said the new system could “potentially be up and running in two months.”
Dela Cruz and Luke also said that a draft of a color-coded playbook to reopen more parts of Hawaii’s economy is confusing and unclear. If the plan were in effect Friday, Luke and Dela Cruz said Hawaii would be at the “green level,” because Hawaii’s hospitals are at less than half capacity.
The color levels could change daily and the different islands could simultaneously be at different levels.
A red level would mean “definitely stay at home,” but otherwise many details were lacking in a draft of the plan, Dela Cruz said.
Luke said that changes between the different color levels have “to be followed by a plan.”
Keli‘i Akina, president and CEO of the Grassroot Institute of Hawaii, said the best way to revive Hawaii’s economy and to nurture diversification is for government “to create a climate where investment and entrepreneurs are rewarded for their actions.”
Akina doesn’t think the economic navigator is the route to go. He said the position isn’t clearly defined and duplicates functions that DBEDT and the Hawaii Tourism Authority should perform, especially given the need for government cutbacks.
“The best thing that the government can do is to lift the restrictions in a timely manner, reduce hurdles to business and restructure our tax system so that we let the markets function the way they should. Businesses themselves should determine demand and supply and the economy — it’s not something that government can do very well,” he said. “It’s very possible that the office of the economic navigator could inadvertently end up hindering the natural recovery that the markets could bring about.”
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