 How they voted
 By Lynda Arakawa
Advertiser Capitol Bureau
The Senate yesterday passed, by a vote of 14-11, a controversial bill to eliminate the income-tax cuts lawmakers promised in 1998.
The vote followed a heated floor debate that lasted about an hour, with supporters saying the proposal is necessary to have money for teachers’ pay raises and opponents arguing that it breaks a promise made to taxpayers.
Gov. Ben Cayetano and lawmakers had promoted the tax cuts as a way to stimulate the state’s economy. The first of three tax breaks has been phased in, but the bill would cancel the final two reductions and enable the state to collect $200 million more than it would have over the next two years.
The bill also would provide a new $25-per-person tax credit for all Hawai‘i residents.
Many Democratic lawmakers used the 1998 income-tax cuts during their re-election campaigns as an example of their efforts to renew the stagnant state economy. Voting to pull back the tax cuts may haunt Democrats in the 2002 elections, when every seat is up for grabs and districts are reapportioned.
Senate Ways and Means Committee Chairman Brian Tani-
guchi, D-11th (McCully, Mo‘ili‘ili, Manoa), said: "I’m sure that Republicans will try to take advantage of this, but I think once people understand the kinds of challenges we’re facing (with) the budget that hopefully they’ll understand."
Cayetano has said he will veto the bill, which now goes to the House.
House Speaker Calvin Say said yesterday he hopes the House Finance Committee will at least hear the bill, but others in the House leadership disagree.
Last week Vice Speaker Sylvia Luke, D-26th (Punchbowl, Pauoa), said the bill "appears dead on arrival" in the House, and House Majority Leader Marcus Oshiro said yesterday he doubts it could win approval on the House floor.
Oshiro, D-40th (Wahiawa, Whitmore), said many House members vividly remember the controversy over the House’s 1998 vote to increase the excise tax as part of a package of tax changes that included an income-tax cut. The excise increase was later dropped from the package.
"A lot of members were just shaken by that experience. To do something like that, I don’t think you can do it today," Oshiro said.
Taniguchi yesterday defended the bill on the Senate floor and described the hundreds of millions of dollars the Legislature faces in mandated state costs and raises for teachers and other public workers. He reminded senators that the governor’s budget proposal didn’t include money for public worker pay raises.
"This bill is not a tax increase," he said. "It is simply looking ahead and deciding that we probably cannot afford to implement tax reductions at this time."
He said while he and his committee will try to balance the budget, "we need to send a strong message to the House and to the governor that the Senate is serious about funding teacher pay increases and that we are willing to make sacrifices like eliminating the governor’s income tax reduction scheme to fix our schools in a meaningful way by acknowledging the sacrifices and commitment of our teachers, principals and school staff."
Senate Minority Leader Sam Slom, R-8th (Wai‘alae Iki, Hawai‘i Kai), said senators should go back to the table and discuss collective bargaining issues in terms of "what we can really afford."
"If we say education is the most important, then we do that first, and then other people may have to wait, but not the taxpayers who have already been overburdened," he said.
Sen. Colleen Hanabusa, D-21st (Kalaeloa, Makaha), said to vote for the bill would be to take responsibility for the obligations to pay for public worker pay raises and other costs.
"Yes, everyone has elections in 2002. Yes, this is not an easy decision to make, but we have the responsibility," she said.
But senators who opposed the bill said it would erode consumer confidence and break a promise to Hawai‘i taxpayers.
Sen. Les Ihara, D-10th (Waikiki, Kaimuki), said the taxpayers did not have an opportunity to be heard on the proposal and that the bill would in effect raise income tax rates for residents. The measure would be retroactive to 2001, when the second phase of cuts has already taken place.
The tax-cut plan reduced in 1999 the state’s top income-tax rate from 10 percent to 8.75 percent, and adjusted the lower tax brackets proportionately. The top tax rate was cut to 8.5 percent on Jan. 1, 2001, and is scheduled to be cut to 8.25 percent next Jan. 1, with lower brackets reduced proportionately.
Ihara also mentioned the governor’s promise to veto the bill, saying, "We should face up to this reality now so that a responsible financial plan can be worked out."
How they voted
State senators voted yesterday on whether to roll back income tax reductions:
|
YES
Jan Buen
Robert Bunda
Jonathan Chun
Suzanne Chun Oakland
Colleen Hanabusa
Cal Kawamoto
Donna Mercado Kim
Russell Kokubun
David Matsuura
Ron Menor
Bob Nakata
Norman Sakamoto
Rod Tam
Brian Taniguchi |
NO
Avery Chumbley
J. Kalani English
Carol Fukunaga
Fred Hemmings
Bob Hogue
David Ige
Les Ihara
Lorraine Inouye
Brian Kanno
Matt Matsunaga
Sam Slom |
[back to top] |
