Use of fiscal notes would benefit both taxpayers and lawmakers

RE: P231 — RELATING TO THE FISCAL IMPACT OF LEGISLATION

Aloha Chair Szewczyk, Vice-Chair Yamamoto and other members of the Commission,

The Grassroot Institute of Hawaii supports proposed Charter amendment P231, which would require an assessment of the financial impact to the city of all proposed legislation.

The fact that the Council often considers bills without any reliable estimates of what the proposed legislation will cost or save the city and taxpayers is a matter of great frustration to lawmakers and residents. What would be irresponsible for a family budget — making purchases without any notion of their cost — is standard practice in politics.

The solution is to be found in the adoption of “fiscal notes,” which are informed estimates of how much revenue proposed bills might generate or cost.

The Commission has already advanced P066 and P156 — both of which would establish fiscal notes. All three proposals differ mainly regarding which city agency would be responsible for providing the fiscal notes.

P066, proposed by the Grassroot Institute of Hawaii, would require the Office of the City Auditor to estimate the fiscal impacts of all bills prior to their second reading before the Council.

P156 would give the Council authority to establish a “Legislative Office of Budget Oversight,” which would be tasked with providing budgetary analysis to the Council and creating fiscal notes for proposed bills prior to second reading.

Meanwhile, P231 would also require fiscal notes to be created for all legislation other than the city budget. This amendment — suggested by the city’s Office of the Managing Director — would assign fiscal notes to the Office of Council Services.

Grassroot defers to the Office of the City Auditor and the Office of Council Services on whether they have the expertise or desire to implement a fiscal note process. If neither office is comfortable with taking on the responsibility for creating fiscal notes, perhaps the best option would be to establish a new office as proposed in P156.

And regardless which amendment, if any, the Commission ultimately chooses to put before voters, Grassroot encourages the inclusion of language that requires fiscal notes for all proposed Charter amendments, too.

This information could be helpful to city voters presented with Charter amendments that propose tax changes, consolidating city operations or dividing operations into new or separate departments.

Thank you for the opportunity to testify.

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii