House and Senate Democrats put infrastructure improvements as the priority but left open the possibility of tax relief. Gov. Linda Lingle has said that about $300 million of the surplus should go back to the people as tax relief.

"If we are concerned about the future, we also need to reduce the tax burden of our citizens, a burden that has become more and more untenable," said Senate President Robert Bunda, D-22nd (North Shore, Wahiawa), in his speech. "I advocated tax reform last session. The current budget surplus makes an even stronger case for tax reform.

"In the past, we've resisted implementing any changes to our tax structure because of a lack of revenues to support them. What we need is not just a one-time rebate, but significant and permanent tax reform."

House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo, Wilhelmina Rise), told his colleagues to choose wisely. "Cutting taxes is an easy thing to do and maybe that's what we'll decide to do at the end of the day. Three hundred million dollars is a lot of money, but when you add up your share of the refund, what do you get? Enough extra to buy another loco-moco or plate lunch," Say said.

"Think about what else we could accomplish with that money. I always say, think about our kids sitting in a classroom where the roof is leaking, without a decent cafeteria, without enough books in the library," Say said. "Think about our harbors that are falling apart. Think about the water we will need to grow our own food, or maybe you think we should continue to import 90 percent of the food and energy we use every year?

"Think about how much money you need to buy a house. Most of all — think about the future our kids will inherit if we don't make the right choices."

Republican leaders said tax relief must be part of how the state uses the surplus and can be done along with improvements such as repairs to public schools. Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai), said the state should lift general excise taxes on food.