`Ano`ai kakou… On May, 30, 2012, the Star Advertiser reported that the state Council on Revenues lowered the revenue projection for next fiscal year, which prompted Governor Abercrombie’s administration to cut back the state’s spending.
This is not surprising. When revenues are down, everyone cuts back on spending. Everyone except OHA.
Trustees Keep on Spending
Our new CEO, Ka Pouhana Kamana’opono Crabbe, has been working diligently to cut our budget wherever possible and to streamline operations to save money, but there are still Trustees who insist on spending more.
This extra spending puts enormous pressure on our dwindling resources at a time when OHA has already accepted major financial commitments such as Waimea Valley, ownership of the Kaka’ako Makai Settlement Properties, and other commitments such as the $3 million/per year for 30-years debt service for the Department of Hawaiian Home Lands and funding for organizations such as Alu Like, Inc. and the Native Hawaiian Legal Corporation that have made their way into our annual budget. These are huge amounts of revenues being contracted to these entities. Add to this the grants and annual operational expenses and we are maxed out.
A Constant Issue
Overspending has been a longstanding problem at OHA. In April of 2004, our money committee chair asked for a legal opinion that would allow OHA to spend more of the Native Hawaiian Trust Fund. He even questioned whether it’s even appropriate to build the Trust at all.
I have consistently argued against OHA’s 5% spending policy and strongly recommended that it be reduce instead to 4%, at least until the economy fully recovers again. Even Kamehameha Schools operates at a lower spending rate than 5%.
In these tough economic times, there are nearly a hundred nonprofit organizations asking for OHA grants each year. While giving the money away will make OHA very popular in the short-term, we should be focusing on the long-term health of the Native Hawaiian Trust Fund.
We have worked carefully for two decades to build the Trust to over $300 million. I would hate to see this relatively modest amount shrink down to nothing in shortsighted spending sprees that forces us to realign our budget several times a year and draw more money from our corpus (trust). What other organization does this?
State law (Hawaii Revised Statutes §10-14.5 on budget preparation and submission; auditing, Section b) requires that: “The (OHA) board shall provide opportunities for beneficiaries in every county to participate in the preparation of each biennial and supplemental budget of the office of Hawaiian affairs. These opportunities shall include an accounting by trustees of the funds expended and of the effectiveness of programs undertaken.”
I have recommended time and time again that OHA needs to take its proposed budget out to the community so that our beneficiaries can give us their input as well as tell us what their needs are.
This was the common practice of OHA in the past and I believe it helped OHA to develop a budget that was more in-sync with our beneficiaries’ concerns.
I will continue to press OHA’s money committee chair to take our next proposed budget out to the community, as required by law, including the neighbor islands.
So which path will OHA’s leadership take?
It has long been understood that OHA is a “temporary” organization that will someday be dissolved and its assets transferred over to the new Hawaiian Nation.
So the critical policy question is: “Will OHA continue to be a ‘temporary’ organization that will give the Hawaiian Nation the assets it needs to survive or will OHA continue to spend freely and shrink the Trust Fund?”
OHA desperately needs Trustees who will make the tough decision to focus on building towards a more permanent, long-term goal instead of taking the easy and popular path of short-sighted spending.
In this election year, OHA beneficiaries should look carefully at the candidates running for OHA Trustee and choose individuals who will take OHA in a more fiscally responsible direction.
What has been sorely lacking is for Trustees to prioritize our spending and focus on the things that our beneficiaries need and NOT use OHA’s “Strategic Plan,” which is at best a wish list of too many things and does not focus on the top priorities of our people.
NOT listing priorities leaves the door wide open for certain Trustees to continue to fund anything and everything while neglecting meaningful programs in healthcare and housing.
As long as trustees keep drawing money out of our corpus, or trust fund, we are taking money away from future generations of Hawaiians. After all, what is a nation without assets? Aloha Ke Akua.