Posted on: Wednesday, March 2, 2005
Senate expected to pass tax relief
By Gordon Y.K. Pang
Advertiser Capitol Bureau
Three bills aimed at providing tax relief to Hawai'i residents advanced out of the Senate Ways and Means Committee yesterday, assuring that they will remain on the table as lawmakers approach the midway point of this year's legislative session.
The bills will get final readings next Tuesday on the Senate floor. They are expected to pass and then move to the House of Representatives, where similar bills have met with varying degrees of success.
The measures involve changes to the state's income tax laws.
Senate Bill 97 proposes to increase the standard deduction, an idea endorsed by Gov. Linda Lingle in a different bill.
The current $1,900 standard deduction for a married couple has not been raised since 1984 and proponents of the bill argue that even those who qualify for welfare are taxed by the state. The bill contains no set amounts. Ways and Means chairman Brian Taniguchi, D-10th (Manoa, McCully) said numbers can be filled in later in the session when the state's financial picture becomes clearer.
A similar bill in the House has been held in the Finance Committee.
Senate Bill 1740 calls for moving income tax brackets upward, which effectively drops lower-paid wage-earners into tax brackets that require them to pay less than they do now. The bill was authored by Senate president Robert Bunda, D-22nd (N. Shore, Wahiawa), and signed by 22 of the 25 senators.
The same bill has been shelved by the House Finance Committee.
A third plan calls for giving lower-income wage earners a refundable state earned income tax credit similar to one now given by the federal government.
The House Finance Committee has also been busy. Late Monday night, it approved an omnibus affordable housing bill and a measure allowing counties to add a surcharge of up to 1 percent on top of the existing 4 percent general excise tax. It also approved a measure creating a new public financing program for elections.
The housing bill, House Bill 1303, provides an unspecified infusion of cash for the Rental Housing Trust Fund to help the homeless and seeks to aid developers of affordable housing through a spectrum of incentives, from exempting general excise taxes to giving the counties more leeway in land-use decisions. The bill also increases conveyance taxes.
Also advancing out of the Finance Committee was House Bill 1309, which allows the counties to levy a surcharge of up to 1 percent on top of the existing 4 percent general excise tax in order to pay for mass transit projects. State tax officials estimate the surcharge would generate $296 million annually in Honolulu. The cost of a rail system from Kapolei to Iwilei has been put at $2.6 billion.
The committee also moved out House Bill 1713, establishing a new public financing mechanism for elections, which would provide candidates for state offices with public money if they agree to abide by strict contribution and expenditure limits.
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or 525-8070.
