Though some delinquent situations involve individuals unable to pay their taxes, much of the money can be collected.

"A fair chunk of it is collectable," said tax department Director Kurt Kawafuchi yesterday.

Delinquent tax collections reached a record $156 million in fiscal 2004, up from $145 million in 2003, the previous record.

But the increase in collections has not kept pace with the increase in delinquent taxes. Last year the total of uncollected taxes owed the state rose by $11 million to $341 million. Part of that increase may be because of a new computer system that better identifies tax scofflaws.

Regardless of why the number is going up, the rise in uncollected taxes raises the question of how necessary is a tax increase. State lawmakers are debating an increase of as much as 1 percentage point in the 4 percent general excise tax to pay for a rail system on O'ahu.

Lowell Kalapa, president of the nonprofit Tax Foundation of Hawai'i, said the state should collect the millions of dollars in back taxes before raising rates on the taxpaying public.

"That's at the front end," Kalapa said.

Kalapa noted that one way to bring in more tax revenue is to hire more tax collectors.

"Of all the departments they should be funding, it should be the one that brings in the money," he said.

As the delinquent tax balance has risen, the number of personnel assigned to collecting taxes has dropped. In fiscal 1995, when the tax department had 109 people in its collections division, the outstanding tax balance was $117.2 million. Today the department has 83 positions in the division.

This year Kawafuchi, who has not sought legislative money for additional collectors since taking office two years ago, wants lawmakers to pay for the creation of 17 new collector jobs during the next two years.

State Sen. Willie Espero, D-20th ('Ewa Beach, Waipahu), said lawmakers would be willing to pay for more positions, if it's proven they'll bring more money into state coffers.

As for using the $341 million in back taxes to fund a rail transit system, "There's no guarantee whether that will be collected, or when it will be collected," said Espero, vice chair for the committee on Transportation and Government Operations.

"We need to work with solid numbers," he said. "We know we'll be able to get that from the general excise tax."

In prior years the state has hired outside collection agencies and offered wholesale settlements to raise delinquent tax collections. Another option could be to work with counties to tie up permit applications and drivers licenses of those who don't pay their taxes, Espero added.

"I leave it to Kurt (Kawafuchi) to come up with the creative ideas to collect that money," Espero said.