honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Updated at 8:35 p.m., Thursday, May 7, 2009

Hawaii lawmakers wrapping up session

By MARK NIESSE
Associated Press

ON THE WEB

HB200: www.capitol.hawaii.gov/

spacer spacer

Hawaii lawmakers finished passing bills for this year's legislative session Thursday, including a $5 billion annual budget that relies on raising taxes, slashing government services and using an infusion of federal stimulus cash to fill the state's deficit.

Legislators also gave final approval to increasing taxes on oil, possibly opening a space port in the Islands, making residents pay taxes for Internet purchases, tightening technology tax credits and giving taxpayers a meager $1 rebate.

"What a roller-coaster ride it's been. And obviously, I don't care too much for roller coasters," said Sen. Donna Mercado Kim, D-Kalihi Valley-Halawa.

While Thursday was the last day to pass bills, lawmakers will return to the Capitol on Friday to attempt overrides of Gov. Linda Lingle's vetoes of tax increases on hotel rooms, income, property sales and noncigarette tobacco products.

It was the most hectic day of this year's legislative session, with Lingle holding a public veto rally in the Capitol rotunda, lawmakers rushing to finish their work and the Senate debating same-sex civil unions.

Most of the Legislature's time this year was occupied by trying to balance the budget, in part by passing tax increases totaling $300 million over two years. Nearly $1 billion more will come from federal stimulus money.

The biggest slice of the savings — about half — came from general fund budget cuts, including reductions in many state departmental base budgets by more than 20 percent.

The only "no" votes on the budget came from four of the Legislature's six Republicans, some of whom wanted public employee unions to share in the pain.

"Long-standing Hawaii businesses have gone bankrupt. Government unions want to walk away from this crisis unscathed. This legislature seems to be doing their bidding. This is not union bashing. It's the truth," said Senate Minority Leader Fred Hemmings, R-Lanikai-Waimanalo.

The Legislature on Thursday passed nearly 100 bills including:

  • An increase on the per-barrel tax on oil distributors from 5 cents to $1.05, which is expected to generate $31 million annually for alternative energy projects and food safety programs. It could cost consumers 2 to 3 cents more per gallon of gasoline.

  • A $250,000 appropriation for Hawaii to apply for a spaceport license from the Federal Aviation Administration in hopes of establishing space tourism in the Islands.

  • A bill that would ease the way for implementation of the 4 percent general excise tax on all Internet purchases made from Hawaii.

  • Restrictions on tax credits that would allow investors in technology businesses to deduct 80 percent of their investment from state taxes over five years instead of the current 100 percent.

  • Increases in the limit of campaign contributions that originate in the continental United States from 20 percent of a candidate's total donations to 30 percent.

  • A $1 rebate to all taxpayers to meet the state constitution's requirement that they be given money back when the state had too much money left over at the end of the past fiscal year.

    "No one will be completely happy with this budget," said House Finance Committee Chairman Marcus Oshiro, D-Wahiawa-Poamoho. "We tried. We gave it our best."

    ———

    AP writer Herbert A. Sample contributed to this report.