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The Honolulu Advertiser
Posted on: Friday, December 22, 2006

Budget plan should offer relief from taxes

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Holiday bill payment won't be the only headache facing everyone after the eggnog-laced cheer drains away.

Along with the new year will arrive a new excise tax increase intended to fund mass transit on O'ahu. It's up to 4.5 percent from 4 percent — a hike that may not sound like much, but as it applies to everything, it's going to add up.

Among the items to be taxed at the new rate: gasoline. And this hurts. Since April, when gas retailers were mandated to blend ethanol into the gas and qualified for a break from excise taxes, amounting to about 11 cents per gallon. That tax waiver expires Dec. 31, so the 11 cents will be slapped back on the price consumers pay at the pump.

The excise tax is what they call "regressive" because it hurts lower-income people more; expenditures on commodities such as food and gasoline represent a larger cut of their income— so they really feel the tax pinch.

Granted, mass transit is a public need that warrants financial support, and there are many other demands on the state pocketbook. Some of these — including a sizeable chunk for affordable housing — already figure prominently in Gov. Linda Lingle's proposed budget. Those needs have to be met.

But the taxpayers, many of whom were also hit with higher property assessments this year, have to see an end to the relentless tapping of their wallets.

Lingle last session proposed extending the ethanol waiver until 2009, but the bills died. She says she's working on tax relief ideas but won't say whether she'll seek an extension, or give any specifics.

The voters are waiting for someone with a balanced plan. Among the state's duties, the search for ways to ease the tax burden seems an obligation for the 2007 legislative session.