Under the Big Top
by Tom Yamachika, President, Tax Foundation Hawaii
“Ladies and gentlemen, children of all ages, welcome to the greatest show on earth! What you are going to see today is stupendous! It’s astounding! It’s historic! The circus is about to begin!”
Something like that is what you could expect to hear from a ringmaster at the circus, where various and sundry acts from jugglers and high-wire acrobats to trained elephants would perform for your entertainment.
Here in Hawaii, “astounding” is something our Governor said about the way our tax collections have been rebounding. And he’s not alone. Our Council on Revenues, the panel tasked with projecting tax collections so our lawmakers can budget accordingly, is saying that our tax revenue will swell to about $8.3 billion in the fiscal year that ends on June 30, 2022, and jump to $8.6 billion in the fiscal year after that. These are revenue levels we have never seen before.
With this kind of money projected to come in the door, politicians of all stripes are staying up nights plotting and planning how to spend it. Hopefully, they can perform in the legislative session beginning later this month with a flair that will have enough impact with their constituents so that they can confidently cruise to a re-election victory at the end of this year.
Gov. Ige, however, seems to be an exception. His pitch is to squirrel away a cool billion dollars (yes, billion with a “B”) into our state rainy day fund that has, by the way, shrunk to a mere $300 million.
The public worker unions, understandably, are licking their chops and are quivering at the chance to pounce on some of that moola. Their members have been forced to scrimp for the past several years while our economy was getting clobbered, by the national recession and then by COVID, and it’s now time to make things right. They have a point.
Some legislators cite maintenance backlogs that have been around for years and hope that additional funding can be directed to those departments and agencies with problems so they can finally be addressed. They certainly have a point.
Some legislators want to give their newfound wealth away to those less fortunate, and are eyeing such things as a hoist to the minimum wage, tax relief for working families such as making the state earned income tax credit refundable, and expansion of early education and affordable housing programs. They have a point too.
We’re hoping that amidst all of the hoopla, constructive change can be made to our agencies that allegedly are either sitting on tons of money, too lazy to reach for millions of available federal dollars, too lazy to do something about bad actors picking their (and our) pockets, or are mismanaging income-producing assets.
We can look forward to all kinds of bill acrobatics, magical disappearing and appearing provisions, bills rising from the dead (yes, our supreme court made it harder to “gut and replace,” but we think some of that stuff will still be happening), and other unimaginable spectacles!
But we are going to have to patiently wait in the bleachers while all of this is going on. Our leaders in the House and Senate, professing to be worried about rising case counts due to the COVID-19 Omicron variant, have told us that the Hawaii State Capitol will remain closed to the public. Only members, staff, and “a selected few,” we think, will be allowed in the Big Top – I mean, the big square building. That’s how it has been for almost two years running. In a way, it’s like entertainment where we’re allowed to see the performances but, for the most part, not participate in the action.
Ladies and gentlemen, children of all ages, the circus is about to begin!