Tax-hike bill crosses over to House
By Lynda Arakawa and Gordon Y.K. Pang
Advertiser Capitol Bureau
A bill to increase the general excise tax to raise more money for lower and higher public education was approved by the Senate yesterday, and is on its way to the House of Representatives.
Supporters of the bill said it would be a solid investment in Hawai'i's public schools, while opponents said the state's education problems are a result of poor management, not a lack of money.
Yesterday was the 26th day of the 60-day session.
Senate Bill 1626, Senate Draft 2, would raise the general excise tax from 4 to 4.5 percent and provide residents a food tax credit of up to $100. The measure is estimated to generate an extra $80 million to be earmarked for the state Department of Education and the University of Hawai'i.
The bill passed by a 16-9 vote, but it is expected to stall in the House. Gov. Linda Lingle has also pledged not to raise any taxes and recently criticized the bill.
The measure was among more than 800 bills lawmakers in the House and Senate voted on in marathon floor sessions yesterday to prepare for a deadline known as "crossover."
By midnight tomorrow, all House bills must cross to the Senate and all Senate bills must cross to the House, although legislation can always be revived in various ways throughout the session.
The House and Senate yesterday approved hundreds of bills and sent them to the other legislative body for consideration. Here is a snapshot of measures that passed in at least one legislative body (passing) and measures which did not pass either body (failing). Passing • Ban the use of hand-held cellular phones by motorists while driving. • Provide tax credits to individuals who pay for long-term-care insurance. • Establish advisory boards for the Board of Education. • Increase general excise tax from 4 percent to 4.5 percent for public education and establish food tax credit. • Provide $1 million for the Kapolei Public Library. • Authorize hospitals to provide sex-assault victims emergency contraceptives. • Allow residents to register to vote on election day. • Provide a tax credit for landing fees for airlines that have a domicile based in Hawai'i. Failing* • Constitutional amendment proposal for seven elected school boards. • Drug-testing for students. *If measures aren't sent to the other body, that does not necessarily mean they are dead for the session. They can be resurrected through amendments on pending measures. But failure to advance indicates they have not gained widespread support in the House or Senate.
Bills that did not pass include measures imposing the death penalty for the murder of a minor and proposing a non-binding referendum on gambling, both of which never received a hearing.
Crossover
The Lingle-backed proposal for a constitutional amendment for seven elected school boards also did not pass, despite a last ditch effort in the House by the minority Republicans to salvage the measure. The vote fell along party lines in favor of the Democrats' push for 15 "complex area school councils" that would be selected by the existing Board of Education.
Those councils would be given some authority such as prioritizing construction and repair projects. They also would make other decisions about campuses in their respective complexes of schools that would be grouped geographically. Each seven-member council would be appointed by the Board of Education and be required to include at least one student, one parent and one teacher.
Rep. Kirk Caldwell, D-24th (Manoa), said any plan to create elected school boards would need to go to voters no earlier than 2004 in the form of an amendment to the state constitution. House Bill 289 House Draft 2, creating the school councils provided immediate attention to the pressing concern of school governance, he said.
Republicans, however, dismissed the councils as nothing more than advisory panels with no power. "They don't really have any authority. They don't really do anything," said Rep. Bud Stonebraker, R-17th (Hawai'i Kai, Kalama Valley).
The House also moved out measures to ban the use of hand-held cellular phones while driving. Transportation Chairman Joe Souki, D-8th (Wailuku, Waiehu), said the increasing use of hand-held cell phones by motorists "makes for potential disasters" and that the state was already found liable in one death that occurred when a motorist using a cell phone led to a collision.
House Republicans, however, said they know of no conclusive evidence that the use of hand-held cell phones was more dangerous than other distractions, from eating to pressing stereo buttons. "When are we going to outlaw eating in the car?" Rep. Mark Jernigan, R-6th (Kailua, Keauhou) wondered aloud.
On the proposal to raise the general excise tax, Sen. Gary Hooser, D-7th (Kaua'i, Ni'ihau), said he hates the general excise tax "with a passion," but that the more important issue is investing in education.
Sen. Willie Espero, D-20th ('Ewa Beach, Waipahu), noted economic uncertainties with the possibility of war. "This is one option we must leave on the table," he said.
But Sen. Fred Hemmings, R-25th (Kailua, Waimanalo, Portlock), said the premise of the measure is "fundamentally flawed," and that money is not the problem, the system is. "Putting more money in the education system without changing the system amounts to putting more money in a bucket with holes in it," he said.
Lawmakers also passed bills aimed at protecting the elderly and those cared for in adult residential care homes. Both the House and Senate voted to authorize the state Department of Health to conduct surprise inspections on care home operators, which would end a long-standing policy where operators are given advance notice of inspections.
House and Senate lawmakers also approved legislation targeting the long-term-care issue. They each passed bills to impose a tax of about $10 a month to fund a state long-term-care program that would provide $70 in daily cash benefits for up to a year.
The Senate passed the governor's proposal to provide long-term-care insurance policyholders a tax credit that would be phased in at 10 percent of insurance premium costs in 2004, 20 percent in 2005 and 30 percent in 2006.
The House's proposal approved last night would encourage the public to purchase long-term care by providing a tax credit of $2,500 or 50 percent of a premium, whichever is less. The credit would only be allowed to be claimed if the governor declared general fund tax collections in two successive years are 7.5 percent higher than in each of two previous years.
The Senate and House also passed a number of other tax credit measures, including bills to provide tax credits for creating high-paying jobs, tax credits for landing fees for airlines, and credits for development at the Ko Olina resort.
Reach Lynda Arakawa at larakawa@honoluluadvertiser.com and Gordon Y.K. Pang at gpang@honoluluadvertiser.com.
