Wednesday, September 18, 2019
Hawai'i Free Press

Current Articles | Archives

Tuesday, January 31, 2017
SB938: Eliminate DoTax 10% Rail Skim
By Grassroot Institute @ 4:58 PM :: 3065 Views :: Rail, Taxes

Grassroot Institute Urges Legislature to Act on Surcharge "Skimming"

Comments on SB938 emphasize transparency, accountability

News Release from Grassroot Institute

HONOLULU, HAWAII--January 31, 2017--Today, the Grassroot Institute of Hawaii offered comments on a bill that would put an end to a controversial state practice that allows the Department of Taxation to profit from its administration of the rail surcharge. In testimony on SB938, Grassroot cited the need for greater accountability and transparency on the part of DOTAX in collecting and managing the surcharge.

The Grassroot Institute referenced the lawsuit brought by the Tax Foundation of Hawaii against the state of Hawaii regarding the provision up for repeal in SB938. Currently, the law allows DOTAX to deduct 10% of the gross proceeds of the county surcharge for the costs of administering it. While the Department is instructed to calculate the actual cost of its management role and return the remainder to the county, it has not done so. The Tax Foundation has challenged this practice and Grassroot recently filed an amicus brief in support of the plaintiff in the suit.

"The simple truth is that the current law is little more than state-sanctioned skimming of tax funds at the expense of the taxpayers," stated Keli'i Akina, Ph.D., President of the Grassroot Institute of Hawaii. "The Tax Foundation has calculated that the Department of Taxation has collected more than $177 million under this law--an amount far in excess of what would be required to carry out its duties. That is a clear violation of the people's trust in government and suggests a distressing disregard for taxpayers' wallets."

Dr. Akina continued: "It is encouraging to see the legislature is finally taking notice of this problem. However, given the problems besetting the rail project and the consistent lack of transparency in our state agencies, we suggest they go one step further. It is time that they require a full audit of both the rail project and the Department of Taxation. That would send a strong message in favor of responsible spending and accountable government."


Grassroot Testimony on SB938 (Repealing the Reimbursement Provision of the Rail Surcharge)

From Grassroot Institute,  Jan 31, 2017

January 31, 2017 -- 1:15 PM 
Conference Room 229

To: Committee on Public Safety, Intergovernmental & Military Affairs 
Sen. Clarence K. Nishihara, Chair 
Sen. Glenn Wakai, Vice Chair

From: Grassroot Institute of Hawaii 
President Keli’i Akina, Ph.D.


Comments Only

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on SB938, which would repeal the requirement that the Director of Finance deduct 10% of gross proceeds of the county surcharge on state tax for the purposes of administering that surcharge.

In the spirit of disclosure, we should mention that the Grassroot Institute has filed an amicus brief in support of the plaintiffs in the Tax Foundation of Hawaii’s lawsuit against the state in reference to this particular statute. In that brief, we discuss the fact that the issue is not only one of government accountability and transparency but also the state’s responsibility to the taxpayers.

Under the existing law, the Department of Taxation has been allowed to keep a full 10% of the rail surcharge for the costs of administering it, despite the fact that the law directs DOTAX to calculate how much is required for its management of the surcharge, then return the remainder to the rail project. While the Department does not claim that it requires the full 10% for its administrative efforts, no official attempt has been made to calculate the actual cost to the Department of collecting and administering the tax.

The Tax Foundation of Hawaii estimates that so far, DOTAX has kept more than $177 million, adding that in many years, the amount collected for administrating the surcharge was at or near the entire departmental budget for that year.

At best, this demonstrates a lack of accountability and transparency. At worst, it is tacit permission for a state agency to skim proceeds of a tax for its own purposes instead of the one which was presented to the voters and citizens of this state.

Given that the state rail project has already been beset by problems, this surcharge administration fee has become a violation of the public trust. Every dollar taken from the wallets of taxpayers that is not demonstrably needed by DOTAX to administer the surcharge should go directly to that project.

This situation makes it clear that a full audit of the rail project and the Department of Taxation are necessary to increase transparency and restore public trust in state management of the project.

Thank you for your consideration of our comments.

Grassroot Institute’s amicus brief can be viewed at: LINK 

SB938: Text, Status

  *   *   *   *   *

About the Grassroot Institute of Hawaii:

The Grassroot Institute of Hawaii is a nonprofit, nonpartisan research institute dedicated to the principles of individual liberty, the free market, and limited, accountable government throughout Hawai`i and the Asia-Pacific region. Read more about us at

Like us on Facebook:

Donate to help us grow:

Tweet us at

About Grassroot President:

Keli’i Akina, Ph.D., is a recognized scholar, educator, public policy spokesperson, and community leader in Hawaii. Currently, he is President/CEO of Grassroot Institute of Hawaii, a public policy think tank dedicated to the principles of individual liberty, free markets and limited, accountable government. An expert in East-West Philosophy and ethics, Dr. Akina has taught at universities in China and the United States and continues as an adjunct instructor at Hawaii Pacific University. 


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

808 State Update AM940


ACA Signups Hawaii



Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii



Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii


Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube


Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes


Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii


OHA Lies

Opt Out Today

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii


Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii