New figures released by the National Conference of State Legislatures show Hawaii as the only state to have cut taxes by more than 1 percent in the past fiscal year. Hawaii rated as
lone state to cut taxesThe isle tax cuts came as 26
other states raised taxes or feesStar-Bulletin staff
Hawaii's tax cuts come at a time when 16 states raised taxes and another 10 raised fees, according to NCSL data. Gov. Ben Cayetano said the cut to the state income tax will result in a $2 billion tax savings over six years.
At the same time that Hawaii has reduced taxes, Cayetano said, the state has been able to build 13 new schools, give pay raises to state workers and "add nearly 3,000 additional full-time positions to the Department of Education."
Many of the positions were to implement the federal court-ordered consent decree to bring the state into compliance with federal law regarding equal education opportunities.
The NCSL said 12 states cut K-12 education spending during the last fiscal year and another 11 cut it this year. Hawaii, which opened the legislative session in January with a $300 million potential deficit, cut education by $24 million and the University of Hawaii budget was cut by 2 percent.
Since then, the state tax collections dropped another $87 million and Cayetano this week said the state did not have money to give state workers any new pay raises next year.
The national report said the current economic downturn and the lingering economic problems from last year's terrorist attacks are likely to cause problems for state budgets next year.
The report said state fiscal conditions have "deteriorated dramatically" and state ending balances fell nearly 42 percent from the 2001 to 2002 fiscal years.