Tax cuts top Lingle’s agenda
Some legislators see other imperatives as the state forecasts a 10 percent surplus
By Tara Godvin
Associated Press
In the run-up to next year's Legislature, Gov. Linda Lingle has made her intentions clear early: Bring back the tax cut bills that foundered last year, and beef up disaster preparedness.
Packages from House and Senate Democrats, meanwhile, are still in the works. And while there will likely be some common ground between the governor and legislators on such issues as bolstering public education and making long-term health care more accessible, the subject of tax breaks is a little more iffy.
"We're looking at what is appropriate, but we see the so-called revenue projections as, No. 1, being projections," said House Majority Leader Marcus Oshiro.
According to the state Department of Budget and Finance, the state is expected to have $473 million left over at the end of fiscal 2006 on June 30, which will equal about 10 percent of anticipated income for the year.
If the state were a business, that would be like making a 10 percent profit, but the Hawaii Constitution does not allow the state to simply save up its extra income.
Late this summer, Lingle announced that with that much of an expected surplus, she will push for revival of a host of tax relief bills that were set aside last session.
Passing the bills this session is an imperative, she said, because under the constitution, when the general fund balance is more than 5 percent of revenues during two successive fiscal years, the Legislature must give back to taxpayers.
But Oshiro (D, Wahiawa-Poamoho) said the state also needs to look ahead and prepare for less federal money coming to Hawaii as the result of federal spending cuts. That could result from reductions in Medicaid, Medicare and public education, as well as transportation. Higher fuel costs will also boost construction costs for the state, he said.
"You need to look at the cumulative effects of all these unanticipated types of shortfalls for emergency funding requests that will be coming in. So we don't want to overpromise, and we don't want to squander the opportunity to make long-term investments," he said.
Legislators across the nation have been voicing similar caution as their states' revenue forecasts brighten following a string of less optimistic years. Many states fell hard after a spate of spending during the late 1990s and now must contend with immediate demands on funds.
Senate President Robert Bunda said he hopes both houses will be able to agree on tax relief measures. Last year, Bunda was behind a bill to revise Hawaii's tax brackets, which now require even those who qualify for public assistance to hand a portion of their income back to the state.
Along with putting more support behind education, disaster preparedness and alternative energy, Senate Democrats also hope to help Hawaii excel in the health care industry, Bunda said.
"Can we be leaders in cord blood stem cell research? And the answer is yes," he said.
The topic of stem cell research, which has sparked a national debate, does not have to be controversial if the stem cells do not come from embryos, said Bunda (D, Kaena-Wahiawa-Pupukea).
The nation as a whole needs to strengthen its position in areas such as science, and Hawaii can lead the way, he said.
"If we're not competitive in some of these areas, we've lost our productivity, we've lost our whole character in the whole world, we've lost our presence in the whole world," he said.
Oshiro said House Democrats will be focusing on quality-of-life issues, such as preserving open land and ensuring that all residents -- including those in the islands' more far-flung rural areas -- have health care services they can access near their homes.