Homeowners’ tax credit
replaces construction plan

---

By Richard Borreca
rborreca@starbulletin.com

Gov. Ben Cayetano and state legislative leaders are dropping the plan for a $1 billion construction budget and replacing it with a state tax credit for homeowners' new construction.

Cayetano explained yesterday that the Legislature did not want to borrow money for the $1 billion construction budget but agreed to the tax credit, which will allow homeowners to take a credit for the taxes paid on new construction. Homeowners would be eligible if they rebuild, remodel or build a new home, Cayetano said.

Legislators had been leery of committing the state to the huge construction project because it would have cost the state about $85 million in interest on state bonds to pay for the project.

"I am a little disappointed they aren't going to give me everything I asked for," Cayetano said. "But last night (Thursday), we worked out some tax credits that may accomplish the same results."

Cayetano hopes to spur local construction in order to generate more money for the local economy, which has been hammered by a tourism slump stemming from the Sept. 11 attacks.

At the same time, the legislative leaders tentatively agreed to $100 million in new construction. The money will go for repair and maintenance of local schools, Cayetano said.

The special legislative session is expected to begin at 10 a.m. Monday.