Harris seeks
taxing power

He proposes that the Legislature
allow the city specific authority
to increase the excise tax

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By Crystal Kua
ckua@starbulletin.com

Give us the authority, and we will decide what taxes the city should impose, Mayor Jeremy Harris told state lawmakers yesterday.

"Our philosophy is that ... like every other mainland city, we ought to have the ability to decide what taxes we levy," Harris said as part of his annual journey to the state Capitol to ask the state Legislature for financial help.

But Senate Ways and Means Chairman Brian Taniguchi (D, Moiliili-Manoa) said he doubted the city would be getting a bigger share of revenues or greater taxing power, considering the state's own tight financial situation.

"I think the feeling on the committee is, we're going to give the counties status quo rather than any radical changes being sought by the mayor," Taniguchi said.

Harris is coming before the Legislature as the city grapples with how to offset a $159 million shortfall.

Raising property tax rates, the main source of revenues generated by the city and the three neighbor island counties, is being considered.

Harris and the other counties have come in together to ask the Legislature for specific taxing authority such as the ability to raise the excise tax.

Rather than do that this year, he said yesterday that he decided to simply ask to give the city blanket autonomy to generate more tax revenues.

"If we decide that this certain service should be paid for with sin taxes ... we have the ability to do that," Harris said. "If we choose to have a tax on visitors, we should have our own authority to do that."

Lowell Kalapa, president of the Tax Foundation of Hawaii, said Harris' idea will not wash with legislators this year.

"Basically, it's dead on arrival," Kalapa said. "The Legislature is not going to share any of its taxing power with the counties."

Sharing taxing authority with the state can lead to higher taxes and whittles away the accountability, he said.

But he noted that Harris is not alone because "all four counties have to some degree shied away from raising the real property tax because of political heat, and so they've gone to other resources they've had and they've tapped what we've called user fees, and now they've come to the end of the rope."

Kalapa said the counties should control spending and be willing to take the heat that comes with raising property tax rates. "We like to buy these things, but we don't like to pay for them."

Harris also requested that the Legislature:

>> Transfer the revenues generated from uncontested parking and traffic fines to the counties, which could amount to about $5 million a year. Gov. Linda Lingle has said she agrees with sharing some revenue from traffic fines and parking citations with the counties.

>> Exempt the city from the state excise tax.

>> Give the city a higher percentage of the hotel room tax.

>> Allow the city to tax motor vehicles by value instead of by weight.

>> Give the counties the ability to set parking fines on county roads.

>> Let the counties to use the highway beautification fee for more than just removing and disposing of abandoned cars.

Taniguchi said the only thing lawmakers might consider is allowing the city and counties to use funds from the highway beautification fee for highway beautification projects instead of just for removing abandoned vehicles.

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The Associated Press contributed to this report.

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City & County of Honolulu