Name on ballot:
State House – District 17
Previous job history:
> Nearly 20 years as a practicing CPA with an international public accounting firm rising to the level of partner; KPMG LLP. Keith’s experience included audit and consulting clients in diverse industries which also included a 5-year assignment with the firm’s Japanese affiliate in Tokyo, Japan.
> Over 10 years with a locally owned insurance company and its affiliated companies; Island Insurance Company. Keith served in various management capacities including as Director of Internal Audit, Chief Investment Officer and Treasurer.
> Over 3 years with the State of Hawaii Department of Accounting and General Services serving as Audit Administrator. Keith also served for 2 plus years on a temporary assignment as administrator of the State’s centralized engineering function.
Previous elected office, if any:
Please describe your qualifications to represent the people of Hawaii.
I believe my experience in financial matters, based on my prior job history, provides me with the relevant experience to deal with the challenging future we face with respect to our state budget and finances resulting from the COVID-19 pandemic.
What will be your top priority if elected?
Due to the significant damage caused to our economy by the COVID-19 pandemic, the recovery in our economy must be a top priority in the 2021 legislative session. This will be a multi-year effort as the recovery in our tourism industry will be a slow process.
As Hawaii faces the COVID-19 pandemic, what more can be done to protect residents’ health?
We should focus on the guidance of our public health professionals both nationally and locally. These include the use of face masks in public, practicing social distancing and frequent hand washing. At this point, in areas of the mainland experiencing a resurgence of the virus, public health officials have consistently advised the public of the need to practice these measures. We should learn from the unfortunate experiences of other states and be deliberate and cautious in how we reopen our economy, including the upcoming challenge of reopening our schools.
What more can be done to help residents who have been economically affected by the COVID-19 pandemic?
First, I would like to emphasize that the economic damage is not unique to our state. This is clearly a national problem that will require the involvement of the federal government in providing financial support, which has been through the benefits of the CARES Act so far. The support provided by this act will not be sufficient, though, especially in light of the recent resurgence in many states that has resulted in measures to pause or reverse reopening of their economies. In response, our Governor has extended the 14-day quarantine requirement through August. While the delay in permitting tourists into the state in a safe manner that avoids the 14-day quarantine requirement will cause additional damage to our economy, other states such as California with more diverse economies than ours are also projecting significant revenue decreases. Based on agreements reached with two of its public unions, California has budgeted for furloughs including deferring pay increases unless additional federal assistance is provided. These measures are in addition to other budget cuts to account for the projected shortfall.
Second, given the damage to our national economy, the federal response to the COVID-19 pandemic requires another round of support in the form of the HEROES Act, which recently passed the House and now must be passed by the Senate and enacted into law by the President. A substantial portion of the support in this act is for state and local governments, extends the extra $600 weekly federal unemployment benefits through January 2021, and includes benefits for gig workers, independent contractors, part-time workers and the self-employed through March 2021. This act also provides another round of stimulus checks and rental and mortgage assistance among other provisions to respond to the pandemic.
Third, even with the passage of a form of the HEROES Act we must be prepared to deal with our budget problems, which may include substantially less federal assistance than the House version. Without federal assistance, the Governor has warned that furloughs, pay cuts or layoffs for public employees will be necessary. Further, funding for a key provision of the CARES Act, the extra $600 weekly unemployment benefit is set to expire at the end of July. This will not be entirely offset by allocations of CARES Act assistance made by the Legislature.
Under these circumstances, we need to continue replenishing the unemployment fund through borrowing from the federal government while also, to the extent possible, minimizing the future financial impact to employers who fund the unemployment fund through unemployment insurance taxes. The potential interest costs on such borrowing would also be a consideration. Additionally, I believe deep cuts to the state’s payroll costs in the form of furloughs, pay cuts or layoffs will only prolong our economic recovery. However, any payroll reduction plan that is implemented should also include deferral of scheduled pay raises to ease the strain on our budget, especially if the HEROES Act does not pass or passes with substantially less federal assistance than needed to balance our budget.
Should public worker furloughs, pay cuts or downsizing be used to help the state deal with lower tax revenues and higher expenses during the pandemic? Why or why not?
I do not believe downsizing, which means layoffs, is the answer at this time because this would only add to the drain on the unemployment fund as former public employees file for benefits. I would prefer a plan based on furloughs negotiated with the unions that also includes deferral of scheduled salary increases. This would accomplish the goal of reducing payroll costs without impacting current pay rates and would also retain an already trained workforce, avoiding future recruiting and training costs as our economy recovers. Unless required by law, pay cuts should be a last resort if negotiations with unions fail to achieve the amounts needed to make up for any projected budget shortfall. Unless already provided for in existing collective bargaining agreements, pay cuts could take longer to negotiate than furloughs, but might be necessary to avoid deeper budget deficits especially with the uncertainty of the timing to safely permit tourists into the state and the uncertainty of the desire of tourists to travel due to their employment status and the status of efforts to control the spread of the virus including in our state.
Hawaii’s tourism-dependent economy has suffered greatly due to the pandemic. If elected, what would you propose to support and diversify the state’s economy?
Long-time residents are aware of efforts to diversify our economy going back to the 1970s as the pineapple and sugar industries cut back and closed altogether. Since then we have made attempts to diversify in agriculture, as well as technology and film (with support provided through incentives such as tax credits). None of these efforts have resulted in a higher percentage contribution to our overall economy as tourism continues to dominate as measured by employment data. While I believe diversification is a worthwhile goal, we should also be cognizant of the barriers to diversification that do not exist in many states. These include laws related to land use and zoning, the environment and labor (healthcare, sick and family leaves). Other barriers are our isolated location, which contributes to higher transportation costs, and limits to manufacturing production and capacity.
Many of these laws were enacted to protect our workers and our environment so I generally do not support repealing or relaxing them. Instead, we should look at other costs that are barriers to diversification, including our land use and zoning laws. and find ways to reduce land costs and develop affordable housing. Housing is a major contributor to our high cost of living in addition to other costs such as food, energy, transportation and taxes. These costs contribute to the increasing pressure to provide for a living wage by increasing the minimum wage. Labor costs, a major expense for most businesses, would limit attempts to support the development of sustainable businesses unrelated to the tourism industry unless they are at levels that allow for product and service prices that are competitive with those available from mainland and foreign sources.
Do you support reforms to policing in Hawaii? If yes, please explain what reforms you support.
I believe the issue is broader than just law enforcement. Focusing on law enforcement practices, however, we should first review standards, policies and procedures with the police themselves. This review should cover operational policies, including procedures to ensure compliance and, if warranted, disciplinary procedures to address noncompliance. This review should also cover recruitment and training standards and procedures. Public records, such as court cases on excessive use of force, should also be reviewed. Input from police commissions, prosecutors and the judiciary should also be incorporated. Finally, the public should also have the opportunity to provide input.
What has occurred in Minneapolis and other mainland jurisdictions should be of concern to us in Hawaii, but we should also be balanced in our approach to this issue. We should build a clear understanding of what we expect from law enforcement by learning more about what our police officers face daily in dealing with drugs, violent crime, domestic abuse and other violations of law. On Oahu, people can learn about this in the Citizen’s Police Academy, an 11-week course conducted by the Honolulu Police Department.
Do you support or oppose the construction of the Thirty Meter Telescope on the Big Island and why?
The construction of the Thirty Meter Telescope (TMT) has gone through the required regulatory review and approval. The entire process for confirming the legality of this project included judicial review through lawsuits, and ultimately the State Supreme Court confirmed the legality of the construction of the TMT. This project will also provide significant economic and educations benefits for the people of Hawaii for generations to come. For these reasons, I support the construction of the Thirty Meter Telescope.
Is there anything more that you would like voters to know about you?
I believe my experience in financial matters will be a relevant resource to the state as we contend with the economic damage caused by the pandemic that will unfortunately be a multiyear effort to put us back on a sustainable path towards full recovery. I hope to be one of many others from the public, private and non profit sectors that are needed to provide input towards solutions that will involve difficult and painful decisions but will make us stronger in the long run. More information about my background and experience can be found at my website https://keithkogachi.com.
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