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Hawaii teachers face increased health care costs, other problems in 'paradise'

Hawaii public school teachers are fighting back against health care cost increases that have been forced upon them without proper notice and in violation of a court order. In a sign of what is happening across the nation, teachers are being used as scapegoats and are being villainized as not paying their fair share, when in fact teachers have contracts that are now being broken across the nation. This is reminiscent of Ronald Regan's Union busting of striking air traffic controllers in 1981. That year, the President of the United States, himself a former union official (!) in Actor's Equity, terminated all the 12,000 union members of the Professional Air Traffic Controllers Organization (PATCO) that walked off the job. Today, 30 years later, it is the teachers of America that are under attack by the government that seeks to bust unions across the nation, and although teachers were in the forefront of electing the current President of the United States, since Barack Obama appointed Chicago's Arne Duncan as U.S. Secretary of Education two years ago this month, the pattern is similar to what we saw 30 years ago.

The attacks on teachers are even taking place in "paradise" — Hawaii. There, teachers have been forced to accept "furlough" days (four day school weeks) and are now facing severe cuts in benefits. Consider the following recent article from the mainstream press (December 27, 2010).

Isle teachers may see higher health plan costs next week, By MARK NIESSE, Associated Press

http://www.staradvertiser.com/news/breaking/112535339.html, POSTED: 07:05 p.m. HST, Dec 27, 2010

Hawaii public school teachers will retain their health benefits but could have to pay more after they're forced to enroll in the same health insurance fund as most other state employees next week.

More than 15,000 teachers and retirees are being rolled into the Employer-Union Health Benefits when their exclusive Voluntary Employee Beneficiary Association expires in the new year, a move designed to reduce costs to the state.

"The bottom line is, nobody is going to lose coverage during this transition," EUTF Acting Administrator Marie Laderta said yesterday. "We don't want them to get too anxious. We want to address the anxiety."

But it's likely that teachers, who cost less to insure because they're healthier than other government employees, will end up paying extra for the same coverage.

Costs could rise depending on the plans and coverage teachers choose, Laderta said. Details of health plan costs will be posted on the EUTF website by tomorrow.

"Some will increase, and some will be about the same," Laderta said.

Teachers intend to fight any hike in premiums caused by a change in administration, said attorney Paul Alston, who represents teachers suing to block changes in their health coverage.

Circuit Judge Karl Sakamoto ruled this month that teachers' benefits must remain the same through the transition, a decision that Alston said should also prevent a rise in rates. He said he'll argue that the EUTF hasn't honored the judge's order.

"Coverages provided to the teachers under the VEBA have to be maintained because they're better and cheaper than the coverage provided under the EUTF," Alston said. "They're offering the teachers a plan that appears superficially similar, but which in fact is not similar."

Another concern over the switch is that the financially troubled and understaffed EUTF won't be able to handle the influx of new members, Alston said.

The EUTF — covering 161,000 employees, retirees and dependents — was losing more than $1 million a month earlier this year, and former Gov. Linda Lingle warned in April it could soon run out of money to pay doctors for medical bills.

Public employees enrolled in EUTF pay more than half of their total premiums due to rising costs, with the state government covering the remainder.

Teachers should prepare for higher costs, said House Labor Committee Chairman Karl Rhoads. The EUTF already raised premiums by 24 percent last year.

"Rates are going to go up," said Rhoads (D, Kakaako-Downtown). "It's a big deal, and it's big money, too. The expenses associated with providing health insurance for state and county employees add up."

Laderta wouldn't discuss the EUTF's financial condition or costs because of the ongoing lawsuit.

Hawaii State Teachers Association President Wil Okabe said he's worried that EUTF still hasn't announced how much health plans will cost with only a few days left before the health funds change.

"The teachers have to get the costs in order to make decisions," Okabe said. "Then we have to evaluate if those benefits are the same. If it's not the same, then we're going to have some concerns."

Health insurer Hawaii Medical Service Association, which covers 11,368 VEBA members, are prepared for the change, said spokeswoman Elisa Yadao.

"We want them to know we're doing everything we can to make sure the transition is seamless," Yadao said. "They won't see any disruption."

Hawaii lawmakers created VEBA as a teachers-only pilot program in 2005 that was set to end after three years. Legislators delayed its demise until Jan. 1 because of EUTF's difficulties.

An open enrollment period for teachers to change their plans within EUTF will take place from Jan. 3 to Jan. 24.



Comments:

December 29, 2010 at 3:50 PM

By: kugler

Non-Stop Greed

found this story of how millionaires get off paying property taxes in Hawaii, where they are manipulating the teachers union to force concessions and benefits adjustments.

Obama party stays in home taxed at $300

The owner of a historic Kailua house beside the one the president uses has his property bill cut

By Rob Perez

POSTED: 01:30 a.m. HST, Dec 27, 2010

The absentee owner of a multimillion-dollar home being used by President Barack Obama's visiting entourage gets one of the biggest residential property tax breaks on Oahu.

Kevin Comcowich, the Houston investment executive who purchased the nearly 5,000-square-foot home for $9 million in January 2008, was charged $300 in property taxes this year.

Last year, Comcowich paid nearly $30,000 in taxes for his 1-acre beachfront spread in Kailua. In 2007 the tab — paid by the previous owner — was about $48,000, according to city records.

Comcowich got the huge break because he was granted a 10-year property tax exemption by the city for his historic residence, built in the 1940s by Harold Castle, a key figure in the development of Kailua. The exemption is designed to encourage the preservation of historic homes.

Like last year, friends of the president are using the Comcowich home while they are vacationing here. Obama and his family are staying in a home next door.

Those who get full exemptions on Oahu pay only $300 annually in property taxes — regardless of the value of the residence. The flat rate, raised from $100 last year, is believed to be one of the most generous property tax breaks for historic homes in the country.

Critics of the program cite the Comcowich case as the latest and, with the president's visit, highest-profile example of the program's unfairness.

They say the exemptions disproportionately benefit the rich and provide an excessive break, without taking into account the value of the homes, how much is spent on maintenance, whether the owners live there and whether they even need the public to subsidize their taxes.

All homeowners who seek the exemption must sign an application that certifies, among other things, that the pre-exemption level of property taxes is a "material factor" threatening the existence of the home. But the city does not check to see whether that actually is the case. Comcowich had to sign such a form.

"There's no equity in the system," said good-government activist Holly Huber, who noted that Comcowich pays the same $300 in property taxes as the owner of a 731-square-foot Ewa Villages plantation home assessed at $268,000. Comcowich's property was assessed at $6.5 million.

Comcowich did not respond to two messages left on his phone in Houston.

Those who support the program say it is vital to preserving aging but architecturally significant residences that are costly to maintain. Without the tax breaks, more owners would be inclined to demolish their homes to build something that would provide a greater return on the dollar, program advocates say.

Supporters also say the program helps bring stability to neighborhoods and contributes to the overall preservation of characteristics that make Hawaii special.

A home must be placed on the State Register of Historic Places before it becomes eligible for the tax break.

"Historic Hawai'i Foundation feels that fundamental fairness requires that any property that meets the conditions for acceptance and that complies with the rules should be treated the same," the foundation's Kiersten Faulkner said in a statement. "The city should not discriminate based on income or citizenship, as long as the property owner is keeping the historic property's integrity and meeting the program's requirements."

THE CITY is reviewing the roughly 250 historic residences getting the exemptions in response to previous Star-Advertiser stories highlighting gaps in oversight.

Among other problems, the newspaper found that the city failed to adequately enforce a requirement ensuring the public had "reasonable" visual access to the homes. The Star-Advertiser found roughly two dozen mostly high-end residences for which the view from public streets was blocked or largely obscured. High perimeter walls, thick vegetation and other obstacles obstructed sightlines.

The Comcowich house, at 55 Kailuana Place, was among those with obscured views. The residence, at the end of a long driveway, is mostly hidden behind a rock wall and gate.

The home can be seen from the beach. But people unfamiliar with the area likely would have to guess which one it is.

Because the city charges a flat rate to those getting the full exemption, homeowners with the most valuable properties end up getting the biggest breaks.

Of the roughly 250 benefiting from the program, only one owner has a property — the former Walker Estate in Nuuanu — with a higher assessed value than that of the Comcowich house. That estate is valued at $7.8 million, city records show.

A bill revising the program is pending before the City Council.

"In these times of economic stress, property taxes are rising for homeowners who sometimes have multiple jobs in order to keep a roof over their heads," said Manoa resident Gary Andersen, who sits on that area's neighborhood board. "In my mind there is no question the historic homes tax exemption (program) is broke and needs to be fixed."

Manoa has the most homes getting the exemption.

John Riggins, a Realtor, said homeowners who sufficiently maintain their historic residences should be given a slight tax break because the properties add value to the community. Owners who allow the public to tour the homes at least once a year should be given the biggest break, he said.

But a $300 flat rate simply is too generous, Riggins added. "I don't believe the current program is fair."

Riggins is among those who believe the break should be linked to a property's value and maintenance costs and the owner's income.

But the city has said the program is not structured to help the rich.

"Any claim that the historic-homes exemption is designed to benefit the wealthy with expensive homes is simply inaccurate," Gary Kurokawa, the city's real property assessment administrator, said in September. He noted that dozens of homes in Ewa and Waipahu get the tax break.

Given the intent of the program, the exemption is based on the character of the home, not the income of the owner, he said.

The administration has so far reviewed properties that received exemptions since 2008 and "is following up with owners primarily on visual access issues," said city spokeswoman Louise Kim McCoy.

She also noted that the exemption ordinance "does not have a requirement or limitations with regard to ability to pay or level of owner income."

The Historic Hawai'i Foundation's Faulkner, in her written comments, referred to the estimated $900,000 the city does not collect because of the historic-home exemptions and said that represented only 0.005 percent of the total operating budget. While that percentage is minuscule, the investment in historic properties provides direct financial and indirect social benefits, including job creation, environmental stability and smart growth, according to Faulkner. She referred to a national study concluding that the forgone tax revenue often generates three to five times more revenue in new taxes and investments.

Kualoa Ranch President John Morgan, whose family trust owns three Robinson Lane historic homes, all designed by his great-grandfather beginning in the late 1800s, said properly maintaining the properties is expensive. "We certainly appreciate the tax break. It's a huge help."

The fact that his family owns three historic homes should not be a factor because each case needs to be considered on its own merits, Morgan added.

In researching homeowners getting the breaks, Huber found many to be current or retired corporate executives, lawyers, physicians, professors and others from well-paying professions.

Some, she found, were absentee owners, like Comcowich, who rent their properties. Some get more than one exemption because they own multiple historic homes. Some have only one exemption but own multiple parcels, including one co-owner who also had title to 14 other Oahu properties, according to Huber's research, which she presented to Mayor Peter Carlisle.

Huber has been particularly critical of what she sees as a double standard between how the city treats the rich and poor.

While historic-home owners do not have to live in their homes or prove the "material factor" requirement, those getting assistance in other residential programs have to be owner-occupants and must abide by strict requirements pertaining to finances, Huber said.

"The city is rubber-stamping exemptions for millionaires, while subjecting low-income residents to in-depth evaluations and scrutiny," Huber wrote in a letter to Carlisle. "This is egregious and unfair."

http://media.staradvertiser.com/images/300*175/20101227_loc_obama1.jpg

A plaque in the wall surrounding the Kailua home used by friends of President Barack Obama indicates it is a historic residence. As such, the house is supposed to be visible to the public, but a rock wall and wooden gate keep it hidden from the street. The structure that can be seen to the right is next door; the historic home is beyond the gate.

http://media.staradvertiser.com/images/20101227_loc_obama_c.jpg

Graph shows the reduction of tax bill for millionaire

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