Let’s talk about something that might not sound too thrilling at first glance but touches every aspect of how our government spends our tax dollars: legislative fiscal notes. Yeah, I know, it sounds about as exciting as watching paint dry, but stick with me – it’s actually pretty important stuff.

Now, I’m no financial wizard, but even I know to check the bill before tapping my credit card. The same goes for our state government. Before they spend on new programs or cut taxes, they must have a clear picture of the financial impact.

Enter the fiscal note — a cost estimate attached to every bill the Legislature considers. These notes help ensure responsible budgeting and informed decision-making. And Hawaii is the only state that doesn’t mandate them at all.

The most recent comprehensive report on state fiscal note practices dates to 2015. Then, 38 states and the District of Columbia prepared notes for nearly all bills. Every other state requires fiscal notes for at least some legislation. California, for example, requires a fiscal impact statement for ballot initiatives submitted to voters.

In its 2015 report, the Center for Budget and Policy Priorities listed five best practices for fiscal notes: prepare notes for all proposals, employ nonpartisan staff to conduct the analysis, project fiscal impacts for four or more years, revise fiscal notes throughout the legislative process, and make each note available online.

Bills proposing implementing some version of these practices in Hawaii’s legislative process have been a staple in Republican packages, at least since I was elected in 2013 and signed one. This year, Rep. Gene Ward is the only Republican to sign on to one.

Curiously, it’s a proposal led by progressive Democratic Rep. Natalia Hussey-Burdick, one of Ward’s ideological polar opposites. Fiscal transparency appears to be one of those rare moments when conservatives and progressives can agree.

Of the proposal, Hussey-Burdick wrote via text, “Understanding the potential fiscal impacts of each bill is an essential element of doing the people’s work. We shouldn’t have to rely on speculation from special interest groups in testimony, we need an independent state agency to provide unbiased input.”

Like Hussey-Burdick, Ward also highlighted the need for transparency and greater independence. But, for Ward, fiscal notes would provide independence from other legislators.

“Bottom line: having fiscal notes would dilute the centralized power wielded by just a few Democratic leaders,” Ward texted.

The current set-up, he said, “allows for complete control of the outcome of the Session by the Speaker and his Majority’s top leaders.”

At worst, Ward is correct, and the state doesn’t have fiscal notes because it’s not in the majority leadership’s best interest. But, before we jump to the worst-case scenario, there are other possibilities.

Most notes are still best guesses. Despite their importance, accurately estimating the costs of proposed policies can be challenging. Factors such as uncertainty in economic conditions, behavioral responses to policy changes, and evolving programmatic details can complicate cost estimation efforts.

Producing fiscal notes would require a significant investment. Ironically, we don’t actually know how much it would cost because both the House fiscal note bill and its Senate companion didn’t include any dollar amounts. Yet, we can guess that the cost of setting up a new research office could be in the same ballpark as the cost of the Legislative Reference Bureau, which received $4.2 million for operations and expenses this year.

Controversially, I’d also add that creating a whole new office to produce fiscal notes is somewhat duplicative of existing efforts.

In February, the Senate Government Operations Committee heard the companion to Hussey-Burdick’s bill. Of the four pieces of testimony the committee received, three individuals expressed their support, while the Department of Budget and Finance offered brief comments and pointed out that “currently, the Senate Committee on Ways and Means and House Committee on Finance share similar responsibilities and duties as proposed by this measure.”

I think that’s a point we often miss when advocating for fiscal notes. Legislators are required to pass a balanced budget, and they can’t do that if they’re blind to a bill’s cost when it reaches the final stages of the legislative process. Sitting through budget negotiations with Ways and Means Chair Donovan Dela Cruz and then-Finance Chair Sylvia Luke, I can confidently say they had a good grip on the fiscal impacts of their committee’s decisions and could explain them to me whenever I asked.

This expertise is evident in the 83-slide PowerPoint Sen. Dela Cruz produced for senators last year describing budget changes, the impact of major bills, and how the Legislature’s decisions change the state’s overall financial outlook.

According to Dela Cruz, he’s been making these PowerPoints since his first session as the Senate Ways and Means Chair in 2018. “Members didn’t like voting on it (the state budget) without knowing the full financial plan,” he explained in a recent interview. “So I started doing a full presentation on the big bills that we need to pass, the budget, and the Senate position’s impact on the financial plan. Now, that’s all done before we vote in committee.”

For most bills, Dela Cruz said his committee often asks departments to provide fiscal information before they hear a bill and tries to add appropriation amounts to committee reports whenever they’re not included in the legislation itself.

As someone who remembers former budget chairs who silently crossed bill numbers out with Sharpies on a giant easel pad to let the public know that a bill just died in a mysterious backroom, I do think the process has improved over time. That said, more needs to be done.

But, since the quest for fiscal notes has been languishing for over three decades, we need to try something different. An independent, nonpartisan office dedicated specifically to producing fiscal analyses for each bill the Legislature considers might be the gold standard, but it’s a heavy lift. While I know it’s an unpopular strategy in today’s political environment, I think we need to take an incremental approach.

To start, the Legislature should adjust its internal rules to require some of the best practices that some chairs already employ. For example, chairs could be required to include an approximate fiscal impact, including appropriation amounts or estimated changes to state revenues, in any committee report that accompanies a third-reading bill.

In California, rulemaking agencies are required to fill out an economic and fiscal impact statement in a standardized format that identifies potential private sector impacts and costs to local governments using checkboxes. The Legislature could require committees to use a similar form for each bill that’s scheduled for a hearing in its final committee. If a sponsor or chair doesn’t know the exact numbers, they can fill out what they do know, and at least, the public will know what level of information legislators are working with.

And, since I suspect a lack of staff resources is the primary reason we don’t get more of this information on a regular basis, both money committees need funds to hire additional permanent staff with expertise in economic forecasting. Legislators could also consider creating more positions in the five research agencies that currently exist. Adding staff to an existing agency is usually much more cost-effective than creating a new one. Plus, if the committees and agencies are already doing some of that work, it makes more sense to focus on improving the current system before we try to take the whole thing apart.

All that said, I know these changes aren’t everything. Internal rules aren’t laws, and legislators can always waive them.

But it’s a beginning that we need. If the Legislature adopts new rules that urge chairs to make fiscal impact analyses more consistent and public, it can help build the case for bigger changes.