Sunday, June 12, 2005


Tax cuts, credits would
make living a bit easier


A healthy economy and growing tax revenues has prompted calls for tax relief.

GOVERNOR Lingle and some lawmakers say summer would be a good time to make the living easier for Hawaii residents by convening a legislative session to enact tax cuts.

The decreases would give all taxpayers a break, but would be especially welcome in Honolulu where sewer and other fees will go up steadily to make up for years of flatness.

The state's economy appears strong with revenues predicted to come in 14.6 percent higher this fiscal year than last, meaning an additional $158 million in the state's pocket. The latest tax collections support that forecast. Through the end of April, about $3.2 billion had flowed in, a 14.6 percent increase over the same period last year.

Collections from individuals and corporations have also risen, up 17.9 percent and 64.3 percent respectively through May.

Lingle had sought tax cuts during the legislative session earlier this year, but lawmakers set her and their own proposals aside. Now the governor, bolstered by the bigger revenue takes, has suggested that if legislators return for a special session to override any of her 30 or so expected vetoes, they should use the opportunity to approve tax relief measures, too.

Senate President Robert Bunda is all for that, but House Speaker Calvin Say isn't.

Like others, Say argues that during lean years, many programs and projects such as school repairs were neglected and should be taken care of when the money is available. Without question, fixing and renovating public facilities are necessary.

However, at times of plenty, taxpayers could also use some relief. Hawaii's current income tax on the working poor is among the nation's highest. Increasing the standard deduction would help them as well as low- and middle-income families.

Lawmakers should also consider a credit to offset the state's excise tax on food, medical services and drugs. Between 1987 and 1995, credits ranged from $27 to $55. That's not a lot, but every little bit counts.

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