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The Honolulu Advertiser
Posted on: Tuesday, February 9, 2010

Furlough bill vote postponed

By Loren Moreno
Advertiser Education Writer

The state Senate's education committee again postponed a vote on a bill that would eliminate the remaining public school teacher furlough days through use of the state hurricane relief fund and an increase in the general excise tax by 1 percentage point.

After some committee members expressed concerns about the bill yesterday, Sen. Norman Sakamoto, chairman of the Senate Education and Housing Committee, deferred decision-making until tomorrow to give lawmakers time to discuss how to improve the measure.

Senate Bill 2437 calls for use of the state's emergency and budget reserve and federal Troubled Asset Relief Program funds to restore as many instructional days as possible until Jan. 1, 2011.

Beginning Jan. 1, 2011, the bill would then use a 1 percentage point increase in the general excise tax to pay for the remainder of the furlough days.

The general excise tax on O'ahu would increase from a nominal rate of 4.5 percent to 5.5 percent, although the amount businesses would legally be allowed to charge would actually increase from 4.712 percent to 5.820 percent, to account for the "tax on tax" effect.

On the Neighbor Islands, the excise tax would increase from 4 percent to 5 percent (4.166 percent to 5.263 percent).

To offset the tax increase, Sakamoto noted that the bill would also increase the state standard income tax deductions and would provide tax credits for the purchase of food items.

"If some of the concerns can be addressed, perhaps not all, maybe we can move it forward," said Sakamoto, D-15th (Waimalu, Airport, Salt Lake).

Committee members had a wide range of concerns, including opposition to a general excise tax increase and earmarks within the measure.

Sen. Fred Hemmings, R-25th (Kailua, Waimānalo, Hawai'i Kai), said he planned to vote against the measure and noted that the Hawaii State Teachers Association has been actively lobbying lawmakers to fund furlough days.

"I find it unconscionable that union leadership ... are holding our kids hostage by keeping our kids out of schools, posing tremendous hardship on the working parents of Hawai'i in order to raise taxes that will further exacerbate our economy," Hemmings said.

Sen. Shan Tsutsui, D-4th (Kahului), also said he planned to vote no, noting that the bill contained earmarks.

"As a member of the Ways and Means Committee, I would support a measure that would not tie our hands to certain programs and services but would give us the flexibility to deal with the current budget shortfall in its entirety," Tsutsui said.

The committee also deferred votes on 10 bills that would overhaul the public school system by reestablishing the elected Board of Education as a body that is fully or partially appointed by the governor.

Those measures would put a state constitutional amendment on the ballot in November.