Liquor tax hike pared to 25 percent
By Lynda Arakawa
Advertiser Capitol Bureau
The state liquor tax would increase by 25 percent, under a bill approved yesterday by the Senate Ways and Means Committee.
The increase, which would generate roughly an extra $10 million in state revenue, is half the amount the Senate previously supported. The committee yesterday also approved House Bill 2827, which would draw about $123 million from dozens of state special funds to help balance the state budget.
The measures now go to the full Senate floor for consideration. House leaders, however, said a liquor tax increase is unlikely to pass the House.
Ways and Means Committee Chairman Brian Taniguchi, D-11th (McCully, Mo'ili'ili, Manoa), said the smaller increase for the liquor tax was in response to concerns about the effect on businesses.
"We did get additional testimony that 50 percent is still relatively high," he said. "We're trying to be responsive. Even if it's not exactly what everybody wants, we have to balance it with the fact that we're required to balance the budget."
Opponents of the liquor tax increase have said it would hurt the hotel and restaurant industry and lead to job cuts. Tim Lyons, a lobbyist for Anheuser-Busch Cos. Inc., said increasing the tax by 25 percent would mean a loss of 75 to 150 jobs statewide.
An increase of 25 percent would mean consumers would pay 13 cents more, or 65 cents, on a six-pack of beer and 27 cents more, or $1.33 tax, on a fifth of liquor.
The committee approved House Bill 2381 by a 10-3 vote. The three opponents of the bill were Sens. Lorraine Inouye, D-1st (Hawi, N. Kona, Waimea); Donna Kim, D-15th (Kalihi Valley, 'Aiea); and Sam Slom, R-8th (Wai'alae Iki, Hawai'i Kai).
Gov. Ben Cayetano, who had proposed doubling the liquor tax, said: "I frankly am not too concerned about how much the increase is, because the intent is to raise revenue at least to pad us over at least for this budget session. They need to find the money elsewhere."
But Cayetano did repeat his criticism of the Legislature's plan to raid various special funds, including taking $24 million from the Dwelling Unit Revolving Fund, which is used to facilitate the development of affordable housing.
Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or 525-8070.
