Despite broad concerns, governor says tax system upgrades are on - KFVE, K5-Hawaii News, Weather and Sports

Despite broad concerns, governor says tax system upgrades are on track

(Image: Hawaii News Now) (Image: Hawaii News Now)
HONOLULU (HawaiiNewsNow) -

The governor says a $60 million project to modernize the tax department's outdated computer systems is moving forward with the right team in place.

That's despite significant concerns from union members and the sudden resignation on Tuesday of his tax director after claims of mismanagement, taxpayer problems and warnings of a tax disaster.

Gov. David Ige said state Tax Department Director Maria Zielinski's sudden resignation was not directly related to the tax modernization project that's been under fire. On Monday, he'll nominate Labor Director Linda Chu Takayama as interim director.

Deputy Tax Director Damien Elefante will serve as acting director until Takayama assumes the role and manage the project with Chief Information Officer Todd Nacapuy as "executive sponsor."

Zielinski told Hawaii News Now her reasons for resigning are personal but unrelated to the tax system modernization project.

The new system is critical because it impacts thousands of taxpayers and brings revenue to the state.

When asked what Ige can do to restore public confidence in the project, he said, "I just want to emphasize that this project has proceeded. We have a management team in place now. Many of these projects are very complex."

With the roll out happening in phases, taxpayers complained of problems from security issues to unanswered calls.

Meanwhile, tax workers speaking anonymously to Hawaii News Now alleged mismanagement by the CIO and deputy director and retaliation for speaking out. They supported Zielinski.

"A failure of this tax system could potentially be disastrous for the entire state because we have a failing tax system right now," said a tax department employee.

State Rep. Sylvia Luke, Finance Committee chairwoman, said lawmakers have heard complaints from taxpayers about problems as the new system is rolled out.

"We had people who get delinquent notices for of tax filings when they actually filed their taxes," she said.

While previous reports by an independent consultant painted a brighter picture, the latest one said "at times, the project has operated under a veil of secrecy. This over-tight control on discussions and communications has caused unnecessary work, anxiety, and non-productive negative adoption."

"There are claims the report content was being manipulated by prior tax administrators. We could argue that the current report that was just issued was manipulated by the CIO," said Perreira.

The Governor said CIO Todd Nacapuy was not involved with that report.

Zielinski said, "to my knowledge, no facts or findings were manipulated in any way."


"I as one of the individuals who had been critical of the tax department and their performance feel very disappointed that we weren't given an accurate picture," said Luke. 

HGEA said that once news of the tax department turmoil came out, it received similar mismanagement complaints about a separate $16.7 million project to modernize the state's payroll computer system.

Ige says employees are being trained on the new system.

"We are replacing old and antiquated systems that have been around for a very long time. Change is hard. We engage our employees. We do know they are on the front line," he said.

Luke added, "A lot of it is personality driven. There has to be communication. The CIO needs to go and earn the confidence of the workers."

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