Fighting to save Hawaii’s income tax cuts

by Keli'i Akina, Ph.D., President / CEO, Grassroot Institute of Hawaii

I wish more of our lawmakers would realize that no government program could do as much to help struggling families in the islands as significant tax cuts. 

But maybe public reaction to the governor’s effort to “pause” the phase-in of the state’s historic 2024 income tax cuts will help them come to their senses.

Lawmakers on the committees considering the proposed pause were inundated this past week with testimony against the bills. By one count, there were more than 150 testimonies submitted in opposition to the House version of the proposal, HB2306.

The Senate version, SB3125, received more than 170.

“If these tax cuts are unwound, our representatives essentially lied to their constituents to get elected,” Scott Fernandez stated in written testimony. “A better course is for the legislature to keep its promises to the people and figure out a different solution.”

Also addressing the Senate bill, Diana Heiman wrote: “This state will not prosper unless the government starts protecting those creating jobs and stops overtaxation.” 

Clearly, the proposal to abandon announced tax relief has eroded public trust — and raised a lot of questions about our government’s commitment to reducing Hawaii’s cost of living.

My colleagues at the Grassroot Institute of Hawaii have identified at least $1.4 billion in funds that lawmakers could use to balance the state budget instead of increasing our taxes.

Among them: roughly $500 million in idle special funds, $380 million in vacant state positions, $115 million in special funds that the state auditor has identified as needing to be abolished or reclassified, and $49.5 million in special funds currently budgeted for the new Aloha Stadium.

Also: $120 million could be saved by returning the budget to 2019 levels, adjusted for inflation, and $64 million by axing the Hawaii Tourism Authority.

For encouragement, legislators could look down the street to the office of Honolulu Mayor Rick Blangiardi. Faced with flat revenues this year, he has chosen to trim the county’s budget by eliminating vacant positions that tie up $50 million. 

Mayor Blangiardi announced that he refused to raise funds through a tax hike.

“We've made a commitment not to raise property taxes and to live within our means. That's an easy trick to raise the property taxes. We're not doing that,” he said.

Public comments made by state lawmakers this week indicate that they are already rethinking the scope of the governor’s bills, presenting significantly amended versions for consideration. 

I hope the Legislature ultimately chooses budget discipline over revoking our much-needed tax relief.

E hana kākou! (Lets work together!)