Hawai'i tax bill is nation's highest

By Bruce Dunford
Associated Press

Hawai'i residents continue paying the most per person in state taxes in the nation, according to a U.S. Census Bureau report released yesterday. It's a reflection of Hawai'i's dominant state government, which deals with such things as education, health care and social services usually handled at a county or municipal level in most other states.

"We've always been No. 1, because we're the only state that does all that," said Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai). "Those are normally local functions, starting off with education, for God's sake."

However, even when the state and county tax burdens are combined, Hawai'i still ranks among the top states in the overall per capita cost, he said. Nearly 82 percent of those tax dollars go to the state with 18.4 percent going to the counties.

"The fact of the matter is, we're still too darn high," Slom said.

The Census Bureau has not provided any recent figures on the combined state and local per capita tax burden for the states.

The bureau puts Hawai'i's per capita state tax bill last year at $2,838, which is $954 more than the national average. Connecticut is second at $2,730. Texas had 2003's lowest at $1,316.

In 2002, Hawai'i also ranked highest with a per capita $2,757 in state taxes.

The bureau's table shows that Hawai'i's 1.25 million residents paid $3.349 billion in state taxes last year with more than half going to excise and use taxes. About one-third goes to the state income tax.

A Census Bureau breakdown shows the average resident last year spent $63 in state tax on gasoline, $32 on alcohol, $90 on utilities, $57 on tobacco products and $61 in taxes on insurance.

Hawai'i's per capita figure is somewhat skewed by the average 200,000 tourists in the Islands each day, who pay excise and hotel room taxes while they vacation.

The Census Bureau said state tax collections nationwide grew 2.4 percent in 2003 to $547 billion with general sales tax revenues climbing 2.8 percent while individual income tax revenues declined 1.5 percent.