[ OUR OPINION ]
SENATE Democrats inexplicably persist in their efforts to raise the state's general excise tax despite opposition from their counterparts in the House and Governor Lingle, and despite the fact that an increase will squeeze businesses and taxpayers already struggling financially. Senate turns up
the temperature in
Hawaii’s tax hell
THE ISSUE Senate Democrats keep up the push for an increase in the state excise tax.
While there may be no good time to boost taxes, there certainly are bad times and this is one of them, especially since voters have made it clear they want government to rein in spending.
The Senate is forging ahead with a bill that will hike the excise tax from 4 percent to 4.5 percent, ostensibly to fund public education. It also wants to give the city the authority to impose a sales tax of up to 1 percent in exchange for relinquishing its shares of the hotel room tax. The city's portion of about $31 million would then flow into the state's general fund.
By cloaking themselves in the mantle of public education, Senate Democrats hope to make an excise tax hike -- which is expected to generate about $120 million -- more palatable. However, of the $108 million earmarked for public schools, less than half is clearly allocated for education expenses. The balance is vaguely pegged as money to be spent for school projects as the Legislature sees fit.
A tax rebate for all residents was supposed to lessen the sting of the increase, but the initial $100 return has shrunk to $80 and will probably be limited to low-income households. In any case, the rebate would not come close to matching the $200 more the average resident will pay each year for the increase.
For Honolulu residents, the excise tax increase and new sales tax would add 5.5 percent to the cost of retail goods. Neighbor island residents also could see similar increases should the Legislature extend the sales tax authority to all the counties. Because the excise tax hits services as well as goods and because it is imposed at several transaction levels, prices for almost everything undoubtedly would go up.
As the nation's jitters calm with the winding down of the war in Iraq, the economy will likely stabilize. Tourism, recently buffeted further by fears about SARS, could regain its legs and revenues, projected to drop, could exceed expectations. If so, the state would be relieved of some of its budget constraints, but the tax increases will still cramp taxpayers' pocketbooks.
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PRISON populations in Hawaii and across the country continue to grow, although not at the alarming pace of several decades ago. While more prison space may be needed, alternative methods of dealing with drug offenses are the most logical remedy. Hawaii's new public safety director is well-equipped to combat the problem. Public safety head
rightly focuses on
drug treatment
THE ISSUE Hawaii's new public safety director has said he will concentrate on providing improved treatment for drug offenders.
Governor Lingle has named John F. Peyton Jr. as director of the state Department of Public Safety. As an assistant U.S. attorney in Honolulu for more than 20 years, Peyton was deeply involved in drug prosecution and headed the law-enforcement wing of the highly successful Weed and Seed program.
Peyton sees prison expansion as "one of the potential solutions" to prison overcrowding in Hawaii. However, he can be expected to focus on fixing what he calls "the superficial treatment" that has been provided to drug offenders.
More than 2 million Americans are now behind bars. The rate of incarceration in mid-2002 was 702 inmates per 100,000 U.S. residents, which means one in every 142 residents was in prison or jail. That compares with less than 100 per 100,000 in most European countries and is 18 times the incarceration rate in Japan.
Hawaii's rate of 309 inmates serving at least one-year terms in state prisons was well below the national average of 425 per 100,000 population, but the percentage increase of inmates from the previous year exceeded the national rate. The number of Hawaii inmates grew from 5,412 to 5,541, a rise of 2.4 percent compared with a national increase of less than 1 percent in state prison populations, according to the Justice Department statistics.
Hawaii cannot house that many prisoners and sends more than 1,200 to private prison facilities on the mainland. The transfers have saved the state money; it costs the state about $50 a day per inmate, compared to $80 to $90 a day to keep an inmate in Hawaii.
Much of the increase in prison population has resulted from mandatory sentencing and, in some states, "three strikes and you're out" laws that send people to prison for lengthy periods for minor crimes. However, more than 20 percent of state prisoners nationwide were convicted of drug crimes.
