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The Honolulu Advertiser
Posted on: Sunday, March 12, 2006

Tax relief still a possibility in both chambers

Compiled by Derrick DePledge and Treena Shapiro

Tomorrow is Day 29 of the session. There are 31 days remaining in the session.

It was a busy week at the state Capitol as both the Senate and House held marathon sessions on Tuesday to vote on more than 600 bills that passed between the two chambers on Thursday, a key deadline called first crossover.

As expected, all the priority initiatives highlighted by Democratic majority leaders cleared this hurdle, including the omnibus bills to fix the public schools, reduce the state's reliance on fossil fuels and build more affordable housing. (See graphic on page A35 for more details.)

The big voting day followed a new Council on Revenues projection that the state's revenue could grow by an additional $50 million by the end of June, potentially increasing the state's $574 million budget surplus. While lawmakers have yet to decide whether any of this surplus will translate into tax relief, the possibility is still alive in both chambers.

KEY DEVELOPMENTS

Here, at a glance, are other highlights from last week's legislative action.

Tax relief: Drivers could see some form of tax relief if a bill that cleared the House on Tuesday stays alive. One of the larger debates centered on whether to suspend the general excise tax on gasoline for two years, which could save consumers as much as 10 cents a gallon. Those opposed to the bill or expressing reservations wondered why the state would give a tax cut to those well-off enough to drive or give incentives to people who drive cars, instead of investing more in public transportation or promoting alternative energy. Some were also concerned that the fiscal impact to the state was unknown. But others argued that it was a small way to give back to the taxpayers. Ultimately, only two members - Rep. Hermina Morita and Rep. Lyla Berg - voted against the bill.

Rural help: Bills aimed at getting more emergency transportation in rural areas in the form of ambulances, helicopters and mobile clinics received broad support. One bill would give the Big Island two medical vans that could serve as clinics in a part of the state where hospitals are as much as 50 miles apart. Rep. Josh Green, a doctor and a strong supporter of the Big Island medical vans, said, "This kind of thinking outside the box will save lives over time."

State budget: The House Finance Committee passed a draft of the state budget, which includes:

  • $160 million to the Department of Education for whole school renovations

  • $50 million to the DOE for major repairs and maintenance

  • $84 million for repairs and maintenance at the University of Hawai'i

  • $50 million in federal funds for homeland security and disaster preparedness

  • $24 million for increased enrollment in QUEST, the state's health insurance for low-income residents

  • $20 million for homeless shelters and services

  • $20 million to help the DOE ease the transition to the weighted student formula, which will result in big financial losses at some schools

  • $10.4 million for repair and modernization of vacant public housing units

  • $10 million to retrofit and harden buildings in case of a disaster

  • $10 million for renewable energy initiatives in all state buildings

  • $7.6 million for dental services for low-income residents

    Once it passes the House floor, the budget will cross over to the Senate Ways and Means Committee for revision.

    OVERHEARD

    "For goodness sake, let's just pass a little tax break for the drivers of Hawai'i." Rep. William "Bud" Stonebraker, R-17th (Hawai'i Kai, Kalama Valley), on a bill that would suspend the general excise tax on gasoline

    Reach Derrick DePledge at ddepledge@honoluluadvertiser.com and Treena Shapiro at tshapiro@honoluluadvertiser.com.