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The Honolulu Advertiser
Posted on: Sunday, March 21, 2010

Five Questions | House Speaker Calvin Say

Do you think taxes need to be raised to balance the budget?

Yes, I do, some form of taxes, not taxes that would be across the board, but more in the specialized field of taxes. As an example ... there are almost 30 entities that are exempt from the general excise tax. Should they not consider being asked to pay a little at this point in time, to spread the pain throughout the community as a whole?

What do you see happening if visitor arrivals, business activity, tax revenue stay flat for the next three years instead of increasing?

If tax revenues stay flat for the next three years, I think we have to restructure state government once more. We've got to look at the areas of where the major expenses are. It's basically in salaries and wages, it is in fringe benefits, the employer's contribution to the health fund, the employer's contribution to the pension fund.

And also, we have to address the issue of our debt service. Everybody wants to build, build, build, but building a new facility out at West O'ahu, building a facility in Kaka'ako for cancer research, building a facility in Hilo will all cost the taxpayers money. And the question is, do we have the resources to pay the debt service, if we do float these obligation bonds?

Do you think it's more or less painful to raise income taxes or the general excise tax?

My outlook for both taxes, I really don't support them. It really goes counter to the view that if you work hard you're going to make your money, and then you're going to be taxed for more the more that you make. And secondly, for the general excise tax, it's just a regressive tax that affects everyone throughout this community.

I've always shared with the House leadership and the members of the House that we should look at taxes that are special taxes, or fees, in trying to get us through this economic malaise. And most of them will be temporary also.

A case in point, like last year, we did raise the personal income taxes, you recall, to the 11 percent rate for those who make $150,000. We did raise the conveyance tax for those who own a home of $3 million or more, and we raised the tobacco tax, along with the hotel room tax. Those were specialized taxes that we did raise in trying to address a $2.1 billion shortfall.

This year now, we are addressing another $1.2 billion shortfall. What form of taxes do you try to incorporate? There are a lot of specialized taxes ... the liquor tax, the insurance premium tax, franchise tax, exemptions, credits, etc. All of those may be part of an overall package in coming up with a balanced budget.

You guys take a lot of heat. How do you not take it personally?

That's a very interesting question. And my response, very sincerely and honestly, would be this: If you feel you are doing the responsible thing, you should not feel guilty of anything, as far as taking the heat. Part of being a leader is you have to make some very tough decisions on behalf of your membership. And those are the type of decisions I'm very honored and privileged to make, at this point in my career.

Is there anything the Legislature and the governor can agree on this session?

Yes. I think both the Legislature and the governor agree on one premise: We are here to help the general public.