In a speech to the Senate, Senate President Robert Bunda, D-22nd (North Shore, Wahiawa), said working families should not be asked to shoulder so much of the tax burden.

"This is simply not fair," he said in prepared remarks. "Maybe it's time for a tax cut for the middle class. Maybe it's time to review the entire system."

Gov. Linda Lingle will likely again propose raising the standard deduction to help taxpayers on the lowest rung.

"She feels that's the most significant thing that can be done," said Linda Smith, the governor's senior policy adviser.

Bunda said helping the middle class would be a guiding principle for the session on issues from affordable housing, transportation, the environment and education. "Even that classification doesn't engender much excitement," Bunda said. "But it's a story whose time has come. Whether we are talking about the carpenter building a home in Mililani or the office worker in Lihu'e."

Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai), called for more common ground by working together toward fiscal responsibility. He also called for a Constitutional convention in 2008 to review whether some provisions need to be eliminated. "We can find ways to work together to make sure Hawai'i doesn't lose its magic quality we call `aloha,'" Hemmings said in prepared remarks.

House Speaker Calvin Say, D-20th (St. Louis Hts., Palolo, Wilhelmina Rise), in his speech, outlined transportation, housing, public education, the battle again crystal methamphetamine and jobs as the main priority for representatives.

The priorities, he said, "should surprise no one."

While House Majority Leader Marcus Oshiro, D-39th (Wahiawa) , was expected to outline a plan to give counties the authority to levy a county tax to pay for traffic improvements, including a transit project on O'ahu, Say said "there is no single, right answer."

Bunda and other Senate leaders said they prefer setting up a transit authority which would have taxing powers.

House Minority Leader Galen Fox, R-23rd (Waikiki, Ala Moana, Kaka'ako), said he believes drugs to be the biggest problem facing the state. He called for support of "voluntary, confidential drug testing in school to help families, as families, fight drugs."