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Tuesday, February 10, 2015
Massive GE Tax Hike On the Move in House and Senate
By Andrew Walden @ 4:16 AM :: 7077 Views :: Taxes

by Andrew Walden

Hearings are set for Thursday, February 12, 2015 at 9:30AM for SB727 and HB1253.

(UPDATE: HB1253 has been deferred. SB727 was passed with amendments. See details below.) 

The twin bills call for a 0.5% increase in the General Excise Tax on top of the existing 0.5% Honolulu GE Tax surcharge for Rail.  According to the text of the two bills, the excuse for the tax hike is "long term care" funding. 

The excuse is of course merely a sales pitch aimed at influencing the weak-minded.  Any funds earmarked for LTC would be offset by funds no longer allocated for LTC from the General Fund.  Thus the real purpose of the GE Tax hike is to provide for more wasteful spending of all types by the State.  

HB1253 is introduced by Reps Ito, Hashem, Oshiro and Takayama.  It will be heard by the House Committee on Human Services (HUS) at 930AM Thursday in Capitol Room 329.  HUS is Chaired by Rep Dee Morikawa and Vice Chair Bert Kobayashi. 

HB1253 is also referred to the House Finance Committee which has not yet scheduled a hearing.

SB727 is introduced by Sens Baker, Chun-Oakland, Green, English, Ruderman and Taniguchi.  It will be heard jointly by the Senate Committees on Human Services and Housing (HSH) and Commerce and Consumer Protection (CCP) also on Thursday February 12 at 9:30AM.  The Senate hearing will be one floor below the House hearing in room 229.  HSH is Chaired by Sen Suzanne Chun Oakland, and Vice Chair Josh Green.  CCP is chaired by Sen Rosalyn Baker and Vice Chair Brian Taniguchi.

SB727 is also referred to the Senate Ways and Means Committee which has not yet scheduled a hearing.

Testimony must be submitted 24 hours in advance.

How to submit testimony to the House >>> HERE.

How to submit testimony to the Senate >>> HERE.

---30---

UPDATE: SB727 was approved with amendments by the Human Services and Housing and Commerce and Consumer Protection committees February 12.  It still must be heard by the Senate Ways and Means committee.  The votes were as follows:

The committee(s) on HSH recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HSH were as follows: 3 Aye(s): Senator(s) Chun Oakland, Harimoto; Aye(s) with reservations: Senator(s) Riviere ; 0 No(es): none; and 2 Excused: Senator(s) Green, Slom.

The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 4 Aye(s): Senator(s) Baker, Kahele, Kidani, Nishihara; Aye(s) with reservations: none ; 0 No(es): none; and 3 Excused: Senator(s) Taniguchi, Wakai, Slom.

The amended version of SB727 has not yet been posted.

HB1253 was deferred by the Human Services Committee February 12. 

State Budget Director Wes Machida testified in opposition to both bills.  Here is his statement:

Senate Bill No. 727 establishes the following: a long-term care surcharge on State tax to pay for claims for defined benefits under the long-term care financing program; and the Long-Term Care Benefits Trust Fund, which shall be separate and apart from the general funds of the State. The measure also makes an undetermined general fund appropriation to the Department of Taxation for the implementation and collection of the long-term care surcharge on State tax.

The Department of Budget and Finance strongly recommends that this measure be deferred until thorough studies in the following areas are completed: 1) actuarial feasibility; 2) economic impact; and 3) operational requirements. This long-term care program is a major social program akin to Social Security for Hawaii, and prudence must be exercised in its implementation.

HB1253: Text, Status

SB727: Text, Status

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