Reject plan to privatize excise tax collection
A city-state plan would turn over the function of excise tax collections to a private entity.
WHILE it would seem to citizens that collecting taxes is a basic government function, apparently state and city leaders don't agree.
They have a plan to turn over the job of collecting and administering both the state's general excise tax and a transit project surcharge to a third party, presumably a private company, so that neither the city nor the state would be saddled with the task.
The plan should be soundly rejected. Contracting a "third party" to handle all excise tax collections, as the state-city agreement calls for, is a solution that goes far beyond current needs.
In addition, officials should end this foolish and chronic city-state conflict about responsibilities.
Hiring a private company to handle taxes not only would be costly, but would expose confidential taxpayer information. In addition, it would transfer accountability to an entity less accessible to taxpayers.
State and city leaders have been at odds about who will collect and administer the half-percent surcharge that will be used to pay for a transit project on Oahu. Governor Lingle had threatened to veto legislation that authorized the tax increase, saying that since the city would receive the funds, it should do the collecting.
However, the city doesn't have the workforce, database or expertise to collect the tax. The state already has a system in place for excise taxes, and collecting the surcharge should not be a big burden.
The Hawaii Government Employees Association, the state's largest public workers union, is opposed to the plan since it would eliminate a number of jobs and possibly violate collective bargaining agreements. A union grievance would surely complicate the matter and possibly stymie progress on the city's transit project.
Such a radical endeavor would seem to require a legislative change. The city-state plan appears to exceed the authority of both administrations. Even if the City Council approves the plan, it remains questionable whether the change is lawful.
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