Wednesday, June 19, 2024
Hawai'i Free Press

Current Articles | Archives

Thursday, January 13, 2022
State budget windfall should be shared with taxpayers
By Grassroot Institute @ 2:39 AM :: 2922 Views :: Taxes

State budget windfall should be shared with taxpayers

by Joe Kent, Grassroot Institute

The following commentary was published originally on Jan. 8, 2022, in Hawaii Filipino Chronicle.
_______________

Hawaii lawmakers are wracking their brains about how to balance the state budget, only this time, the problem isn’t too little money, it’s too much. And maybe some of it should go back to Hawaii taxpayers.

Here’s the background: Gov. David Ige drafted his proposed state budget for fiscal 2023 thinking that tax revenues for fiscal 2022 would be 4% greater than the previous year, based on projections from the state Council on Revenues. But on Dec. 20, he revealed that revenues for the first five months of fiscal 2022 had increased by 27.3%.

If that pace continues, the state could see up to $1.7 billion more in tax revenues than originally expected, according to Grassroot Institute of Hawaii calculations — and that is not counting the $1 billion Hawaii received in federal American Rescue Plan aid for the fiscal 2022 budget and the additional $286 million in such aid for fiscal 2023. It also does not include the $2.8 billion Hawaii is to receive from the recently enacted federal Infrastructure Investment and Jobs Act.

How could this windfall benefit Hawaii taxpayers?

Hawaii’s Constitution requires that any “excess revenues” be given back to taxpayers, if the revenues are over 5% for each of two successive fiscal years. That is exactly the situation we are in today, as the state’s revenues increased by 8.1% in fiscal 2021 and are projected to show a 6.3% gain by the end of fiscal 2022.

Unfortunately, the state Constitution doesn’t specify exactly how much should be returned, which is how lawmakers were able to give just $1 back to each taxpayer in 2008, when the constitutional requirements also were met. Then-Sen. Sam Slom rightly called the puny tax rebate “demeaning.”In the current situation, a more respectful option could be for the state to distribute $1 billion of its recent windfall cash to Hawaii’s 734,673 taxpayers, or $1,361 per taxpayer.

That would be a welcome amount for most Hawaii taxpayers, who have suffered considerably under two years of lockdown orders that have damaged all manner of economic activity in the state, squashing businesses and spiking unemployment.

But there is a hitch: Over the years, the constitutional tax-refund provision has been amended to also allow excess revenues to be saved for a rainy day or be used to pay down debt or unfunded liabilities.

In other words, the excess funds could be used to pay down Hawaii’s $26 billion of unfunded liabilities or $13.6 billion of bond debt, or they could put into the state’s rainy day fund, which, in fact, is what Gov. Ige is proposing to do, to the tune of $1 billion. All would be good moves, although Ige’s preference to replenish the rainy day fund, in particular, would prevent that money from being refunded to taxpayers.

However, even if the windfall were not refunded directly to taxpayers, there still would be plenty of room to lower state taxes, which would be a refreshing change from the deluge of tax-hike proposals we see each year.

Moreover, supporting tax cuts would be in step with Hawaii citizens, 70% of whom believe their taxes are too high, according to a recent poll of nearly 1,000 Hawaii residents conducted for the Grassroot Institute by marketing research firm Anthology.

At the very least, lawmakers should not add to the state’s tax burden, and the governor, to his credit, has stated that he is not planning any tax increases for fiscal 2023, which starts in July.

Ultimately, a tax refund and tax reductions would help Hawaii the most in the long run, since our economy typically ranks as one of the costliest places in the nation to start a business. Any gesture favorable toward economic growth would foster general prosperity and pay dividends in the form of greater tax revenues.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii