There’s no money, Lingle told on tax cuts
Gov. Linda Lingle proposed five tax bills yesterday that her administration estimated would save Hawaii taxpayers $102 million during the next two years.
Legislative leaders, however, say there is no money in the state budget for tax cuts.
"To lead people to think we are going to do it would be irresponsible," Senate President Colleen Hanabusa said.
Speaker of the House Rep. Calvin Say flatly said the state has no more money to spend for tax reductions.
"At this point the governor does not have a balanced budget," Say said. "Let's be honest, if she doesn't want to address the needs of the University of Hawaii, be my guest."
Lingle, at a new conference in her office yesterday, said she was still urging state tax changes despite the state having lost nearly $300 million in estimated revenue because of declining tax projections.
"These will work within the confines of our fiscal condition," Lingle said. "They are focused on the high cost of living and what we can do about it."
Lingle is proposing four tax reductions and a small cut in the state charge on cell phone bills to support enhanced 911 service.
The other tax cuts would increase the tax credit for adult-care or child-care costs, plus add an additional tax exemption for children under 18.
Another measure would exempt the first $25,000 in income for people on nongovernment pensions. Lingle estimated that this would save $20.3 million for retired Hawaii residents.
Another bill would provide tax credits of up to $2,500 for people making changes to their homes to provide for an aged or disabled family member.
Finally, Lingle called for a state tax deduction of up to $20,000 for parents who put money in an approved state college-savings plan.
Lingle said her tax cut plans have not had success in past years, and urged legislators to come up with their own tax-reduction plan if they do not like her ideas.
"Everyone in elective office can do something about it and support this important, doable and targeted tax plan.
"I tell legislators that I will consider any tax relief message they care to adopt," Lingle said.
Instead of tax cuts, state legislators say they want to either increase or preserve existing state programs, and to do that, they will not be able to give any money back this year.
But the state Constitution requires a tax rebate this year because of past budget surpluses.
Saying the current state budget is running a deficit, they do not foresee any significant rebate.
The rebate, according to Hanabusa and Say, will either be a token $1 or a return that is just for lower-income taxpayers.