David Y. Ige

Remarks of Governor David Ige as prepared

November 9, 2016 – Hawai’i Tax Institute at Sheraton Waikīkī

Aloha. Thank you for having me here today.

When I first walked into the Governor’s Office nearly two years ago, I knew we were going to face some tough challenges.

My goal since day one has been to “make things right to make things happen.”

Those of you in business know that if you have an unhealthy core in your company, you will not be able to serve your customers well – if the core of your business is in trouble, it’s the first thing that needs to be addressed.

In the same way, I wanted to work on the core issues of governance in order to better align our state’s resources to solve our most critical problems and better serve the people of Hawai‘i.

We’ve been working on this in many ways.

First, our tax modernization project has been proceeding on time and under budget.

Our goal with the tax system modernization project was to: 1) process returns and refunds in a more timely manner; 2) provide no-cost electronic filing for individual income tax returns; 3) identify fraudulent returns using fraud detection technology, and 4) enhance revenue collection.

I’m pleased to report that in the first year of the project, we found $21.5 million in tax fraud.

The second phase of the project just began in August, where we focused on making tax filing and payment more accessible to General Excise and Transient Accommodations taxpayers via the new Hawai‘i Tax Online website.

We hope that the website will allow fast filing options, secure messaging to Taxpayer Services Staff, and the ability for businesses to update and access their own tax accounts.

Secondly, I’ve been working with the department of Budget and Finance to address the state’s $9 billion dollar unfunded liability for the Hawai‘i Employer-Union Benefits Trust Fund (EUTF), which provides health benefits to public workers, along with the $6.2 billion unfunded liability in the public worker’s pension fund.

By restructuring payments to pay back more quickly than required in statute, we will see savings of more than $1 billion over 20 years.

Third, over the summer we began the process of modernizing our payroll and time and attendance systems to more efficiently serve the 75,000 state employees we have in Hawai‘i.

The current system was built more than 40 years ago and run manually all on paper.

The new technology is being implemented over 18 months and will help resolve late and inaccurate payments, which can total more than $1 million a year.

Finally, my administration worked to improve our financial ratings for general obligation bonds. Last Fall, both Moody’s and Standard and Poor’s upgraded the state’s overall credit rating to the highest in our state’s history.

Moody’s changed their rating from Aa2 to Aa1 and S&P upgraded its rating from AA to AA+.

Both agencies recognized the state’s strong revenue and financial performance, proactive measures taken to reduce unfunded liabilities, and budgetary control as reasons for the ratings upgrades.

Shortly after the state received its upgraded ratings, we completed a bond sale which we were able to issue at a historically low interest rate.

The proceeds of the sale will be used to fund capital projects and refund existing debt.

What all these savings mean for you is more resources in our community – more funding available for schools, job training, health care, and social services to help those that need it most.

I know these types of initiatives aren’t splashy – they aren’t the programs that are going to make headlines. But the engineer in me says that we can’t get lasting results without fundamental change, and I am determined to do this – to make things fundamentally right first.

This takes work, and I’m committed to seeing this tough work through, so that the results we achieve will be sound and lasting.

And I invite you all to be a part of this change, by getting involved, to take risks, and help us in the state make things better.

I’m happy to answer any questions you may have.