Excise tax relief defeated in House

By Lynda Arakawa
Advertiser Capitol Bureau

House Democrats yesterday shot down the Republicans' attempt to advance a bill eliminating the excise tax on groceries, rent and medical care, saying the timing is wrong for such a measure.

House Republicans argued that House Bill 310 — carried over from last session — would help stimulate the economy and provide financial relief to the poor and sick.

The bill would "place money back in the pockets of the people who need it the most," said Rep. Mark Moses, R-42nd (Kapolei, 'Ewa Village, Village Park). Republicans have said the state can afford to give a $250 million tax break on groceries, rent and medical care.

Rep. Chris Halford, R-11th (S. Maui, Keokea, Kihei), said the tax is a greater burden on lower-income people, and thus "predatory on the most fragile members of our community."

But Rep. Terry Yoshinaga, D-22nd (Mo'ili'ili, McCully, Pawa'a), who introduced the bill last session, said she did so with the assumption that the economy was improving. Given the current economic situation and recent events, she said, she understands the timing is not appropriate.

Other Democrats argued that while they appreciate the measure's intent, it would cause more harm than good. House Health Committee Chairman Dennis Arakaki, D-28th (Kalihi Valley, Kamehameha Hts.), said the loss of revenue would take money away from government services aimed at the needy.

"It sounds good on the surface, but I think in the end the poor and the sick will lose out," he said.

The House will vote today on a bill that would return a $213 million surplus from the Hawai'i Hurricane Relief Fund to property owners who paid into it.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or 525-8070.