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The Honolulu Advertiser
Posted on: Thursday, May 7, 2009

Lingle resolute on anti-tax vow

By Peter Boylan
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Gov. Linda Lingle

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Gov. Linda Lingle yesterday continued to denounce tax increases approved by the Legislature when she took her message of no new taxes to the people in a live webcast.

The governor's Web site was overloaded during the 4:15 p.m. time slot and many late-arriving viewers had trouble loading the page.

Lingle plans to veto the tax increases at a public ceremony at the state Capitol at 3:30 p.m. today. The bills up for veto would increase state income taxes on the wealthy, the hotel room tax, and the conveyance tax on the sale of luxury homes.

House and Senate leaders have said they believe they have the two-thirds votes necessary to override the vetoes and have extended the session two days, until tomorrow, to allow for possible overrides.

During her online address yesterday, Lingle attacked the logic behind raising the hotel room tax, claiming it will result in job losses for a visitor industry already suffering from fewer tourists.

A tax increase aimed at people earning more than $150,000 a year and households earning more than $300,000 would unfairly target small-business owners, she said, while an increase in the conveyance tax would discourage real estate investment and raise costs for churches and nonprofit organizations.

"I will follow through on my promise to veto these tax measures because they would further erode our already weakened economy, cause greater loss of jobs, and discourage visitors from coming to Hawai'i," Lingle said.

She did not say yesterday whether she would veto tax increases on cigarettes and other tobacco products.

She said her administration has taken "steps to restrict spending, freeze state government hiring, restructure debt, and scale back ineffective programs, resulting in over $1 billion in savings."

"Democrats in the Legislature say they passed these tax increases because there were no other practical ways of closing the budget gap. They say they had no choice. That is not true. In fact, the opposite is true," Lingle said in the address. "There are clear alternatives to balancing the budget, and my administration has recommended them over and over again in order to avoid tax increases that will be destructive to our economy and result in more lost jobs."

Democratic lawmakers dismissed Lingle's address yesterday as being out of touch with the economic realities facing the state and the rest of the country.

"I'm not concerned about Donald Trump (and his tax bracket). She is catering and playing to her base, which is the same as George W. Bush," said state Rep. Marcus Oshiro, D-39th (Wahiawa), chairman of the House finance committee. "Not only is it conquer and divide but it's pitting neighbor against neighbor ... worker against worker. She's dividing us."

House and Senate Democrats said they have been able to achieve $800 million in savings by cutting costs and without job cuts, and said the state cannot generate the revenue necessary to meet the shortfall without tax and fee increases.

State House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo Valley, Wilhelmina Rise), said, "I would have thought the administration would be much more prepared to address this international financial meltdown. No matter what computation that one makes, she should not have stated that she is not for any tax increase or for any 'warm body' cuts," said Say, speaking in his office following Lingle's speech.

"I thought the House did an excellent job coming up with a balanced budget ... at the end of the day the people of Hawai'i should be very proud that we did not increase the GET (general excise) tax," Say said.

Lingle wants to achieve $278 million in labor savings through negotiations with the four government labor unions that represent the majority of state workers but does not want to cut jobs.

Negotiators with the Lingle administration and unions have been discussing potential furloughs of state workers, and Lingle has also said the state does not want to pay additional costs for worker healthcare benefits.

"Unfortunately, too many lawmakers have allowed their sense of obligation to the public employee unions to obstruct their view of the bigger picture and what's best for our economy and all the people of Hawai'i," Lingle said.

Reach Peter Boylan at pboylan@honoluluadvertiser.com.