Counties could keep
excise taxes, traffic
2 Senate bills
A Senate panel passes both --By Mike Yuen
unanimously on the tax measure
Hawaii's four county governments won't be feeling the pinch of the state's 4 percent general excise tax under a bill approved by a Senate panel last night.
The measure, which would save the counties an estimated $30 million a year, would require the state to reimburse the counties for the excise tax they pay on goods and services.
The bill was passed unanimously by the Senate Intergovernmental Affairs Committee, although Sen. Brian Taniguchi (D, Manoa) expressed reservations.
The committee on Thursday approved another measure to aid the counties by allowing them to keep unadjudicated traffic fines and forfeitures rather than having the payments go to the state.
County officials have argued for years that the counties should get a portion -- if not all -- of the estimated $7 million collected annually since it is county law enforcement that issues the tickets.
Under the bill, the fines and forfeitures would be earmarked for county police and fire protection, said Intergovernmental Affairs Chairman Cal Kawamoto (D, Waipahu).
Kawamoto said he pushed for both bills, which advanced to the Senate Ways and Means Committee, because the counties have been clamoring for financial assistance.
Last year, county officials unsuccessfully fought an initiative that cut the counties' share of the state's hotel room tax.
Under the reimbursement measure, rebates would be phased in over four years, with Ways and Means to determine each year's percentage.
One possible scenario, said Kawamoto, could be for the counties to get back 25 percent the first year, fiscal 1999-2000, with an additional 25 percent each year until the rate reaches 100 percent for fiscal 2002-03 and thereafter.
The counties would be permitted to apply for excise tax reimbursements semiannually. They would be required to submit an itemized claim, and the state budget director may ask for proof of specific claims.
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