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The Honolulu Advertiser
Posted on: Saturday, May 20, 2006

Lingle signs tax relief bill

Associated Press

Gov. Linda Lingle yesterday signed into law a measure that will provide almost $50 million in relief to Hawai'i taxpayers.

"This bill provides permanent improvements in tax laws, which are important," Lingle said. "However, it falls far short of the tax relief I had proposed and the taxpayers deserve."

Lingle called in January for almost $300 million in tax relief.

Tax Director Kurt Kawafuchi said Lingle asked his department to push for additional tax relief next year.

Senate President Robert Bunda defended the bill passed by the Legislature.

"I think what we did was a start," said Bunda, D-22nd (North Shore, Wahiawa).

"That doesn't say the next time around that the Legislature won't look at it; I think we will," Bunda said. "If the governor should propose it next year, I think the Legislature should be open."

Bunda said state lawmakers are careful with tax cuts because they represent a recurring cost not just a one-time cost and "$300 million goes a long way as a recurring cost."

Under the new law, income brackets used to determine how much each taxpayer should pay the state have been expanded by 20 percent, saving about $38 million.

In addition, the state's standard income tax deduction has been increased from the current 25 percent of the federal standard deduction to 40 percent of the federal level. Taxpayers who use the standard deduction will save a total of about $11 million per year.