Ko Olina pledges job training
| • | Ritz-Carlton to join activity at Ko Olina |
By Sean Hao
Advertiser Staff Writer
New initiatives and substantial tax cuts aimed at growing and diversifying the state's economy will have to wait until the state is in better financial shape, Gov. Linda Lingle said during her state-of-the-state address yesterday.
Instead, Lingle announced plans to cut taxes for low-income taxpayers, provide support for the Ko Olina Resort and cut costs for health insurance. The proposals were met with a generally favorable response by business representatives.
Among her economic development efforts, Lingle is pushing continued support for $75 million in tax credits for developers of the 642-acre Ko Olina Resort & Marina in Leeward O'ahu. The Legislature previously approved the incentive, but it was vetoed by Gov. Ben Cayetano. The proposal would remain largely intact in Lingle's plan, except it now would require the project's developer to provide training for jobs at the resort.
Jeff Stone, a principal in Ko Olina Co., said he and officials of landowner Weinberg Foundation met with representatives of Ritz-Carlton, the hotel builder and operator that Lingle announced would play a significant role in the resort (see related story). All agreed on the need to train and hire workers locally for the estimated 2,000 permanent jobs the resort will create, Stone said.
"The governor's concerns were that when the luxury market was developed on Maui, many of the people there didn't have the skills for those jobs," he said. "We're happy to provide that training."
Lingle also is proposing to progressively increase the standard deduction for state income tax payers to the federal level. The move is aimed at lowering the tax burden for low-income filers. By her own estimates the tax cut would cost the state $9.7 million in revenues in fiscal 2005, which starts in July 2004, and another $15 million in fiscal 2006.
In addition to these tax incentives, Lingle proposed several measures to increase healthcare competition and lower costs. They include removing healthcare insurers HMSA and Kaiser Permanente from the Prepaid Health Care Advisory Council.
Their presence on the council, which recommends or rejects efforts by Mainland healthcare providers to enter the Hawai'i market, has been criticized as preventing competition for healthcare. A similar measure was introduced last year, but failed to pass.
The governor's recommendation was not unexpected, said Cliff Cisco, a spokesman for HMSA. He said the healthcare provider had already offered to resign from the board, as it does when each new administration takes office. Based on discussions with the new administration, HMSA did not expect to continue to serve on the board, Cisco said.
"I'm surprised that she mentioned it in her speech," he said. "We were already well down that road."
Lingle also wants to eliminate the 4 percent general excise tax on private health insurance companies — a move that would reduce tax revenues only about $100,000 a year because few for-profit insurers operate statewide, according to the state Department of Taxation.
Lingle's scaled-back economic proposals bear little resemblance to a legislative package introduced by Democrats last week.
The Democrats, who control both chambers, propose creating tax incentives for businesses that create high-paying jobs as well as agriculture companies within a specified development zone. They also want to create a state cooperative that would make health insurance more affordable to small businesses.
However, Lingle's budget sent to legislators last week presumes that only about $30 million would be available for the creation of new tax incentives. House Majority Whip Brian Schatz, D-25th Dist. (Makiki, Tantalus), said Democrats will consider Lingle's proposals along with their own.
However, it's unclear whether Lingle proposals alone will fit within the $30 million cap on incentives, said Schatz, who chairs the House Committee on Economic Development and Business Concerns.
