Wednesday, March 24, 1999

Senators change course,
may raise rental-car,
tour-bus taxes

By Mike Yuen


Legislature '99 The state Senate is reversing itself and wants to go further than the House in considering increases to vehicle-related taxes.

The chamber will now consider a House proposal to raise the daily surcharge on auto rentals from $2 to $3, even though his committee earlier quashed a similar measure, Senate Transportation Chairman Cal Kawamoto said yesterday.

The Senate will also suggest unspecified increases to the $15-a-month surcharge on tourist vans and to the $65-a-month surcharge on tour buses, said Kawamoto (D, Waipahu).

The Senate's new game plan comes as it is now shaping its version of the budget for the next fiscal biennium, which begins July 1. Since the Council on Revenues has lowered its forecast for the state's tax revenue growth, the Senate must cut at least an additional $45 million from the two-year, $12 billion operating budget that the House sent over.

The House wants the auto rental surcharge to remain with the state fund for highway-related improvements. The Senate wants the funds - estimated at $15 million annually - to go to the cash-strapped general fund, Kawamoto said.

The new tack the Senate is taking isn't actually new. Two years ago, the Senate floated the idea of raising the same three surcharges, but the House wasn't receptive.

The Senate, however, will not back a House bill that would impose a new value-based tax on automobiles, Kawamoto said.

To give the Senate more time to shape its tax initiative, the proposal to increase the vehicle surcharges will bypass his panel and will emerge in the Ways and Means Committee, said Kawamoto, a member of Ways and Means.

Kawamoto said his panel was set to consider the House's vehicle tax proposals yesterday, but the hearing was canceled Monday at the urging of Senate President Norman Mizuguchi (D, Aiea).

Mizuguchi could not be reached for comment yesterday.

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