More management, not more money is needed for the state to solve its financial problems, according to Lowell Kalapa, executive director of the independent Hawaii Tax Foundation. Possibility of tax
increase draws a
critical commentaryBy Richard Borreca
Star-BulletinIn an interview yesterday, Kalapa reacted to suggestions by House Speaker Calvin Say that the state Legislature will have to look at both raising taxes and perhaps levying a new tax on presently tax-exempt nonprofit organizations and charities.
"There is a disconnect between right and left hand of budget. If you don't control spending, you are going to have to raise taxes," Kalapa said.
He interpreted Say's warning as putting next year's Legislature on notice that "unless they do something to the right-hand side of the ledger, it is a promise."
"There are so few who see that if you don't control spending, you are going to have to raise revenue," Kalapa added.
To control spending, Kalapa said the Legislature must press state managers to become more aggressive about demanding performance standards.
Kalapa said he was encouraged by the Legislature approving bills to allow for reform of the public employee health fund and also allowing state and county government to privatize services.
He noted that the House has usually been more reluctant to propose raising taxes to deal with budget shortfalls or downturns in the economy, saying "the Senate has never been shy about raising taxes."
Senate leaders Brian Taniguchi and Robert Nakata both suggested this year that the budget could be balanced if taxes were increased.
"It is not a revenue problem. It is a management problem; it is an efficiency problem," Kalapa said. "Calvin needs to talk about lighting a fire under government leaders and telling them they have to lead."
Kalapa said Say's nonprofit tax idea would be difficult to administer even if he could sell the politically volatile idea of taxing charities and nonprofits.
"Would you tax the Sunday collection plate? Would you tax the payments government gives nonprofits for social services?" Kalapa asked.
Say is calling for the state House to study his proposal this summer in expectation of considering tax changes during the next legislative session.
Say also proposed taxing charities and nonprofits when he was House Finance Committee chairman but was unable to find many supporters.
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