More county tax
clout in doubtKey lawmakers balk at allowing
counties revenue sources other
than property taxes
The counties' desire to gain additional taxing authority will face an "uphill battle" at the Legislature this session, the chairmen of the Senate and House money committees said yesterday.
"Whether a tax is county-generated or state-generated or even federally generated, it's imposed on the same people in Hawaii," said House Finance Chairman Dwight Takamine (D, Hawi-Hilo).
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With the Legislature focusing on reforming education and combating the "ice" epidemic, funding for rail transit is also on the back burner, they said.
"I'm still open, but I think it is probably going to be hard (to pass)," said Senate Ways and Means Chairman Brian Taniguchi (D, Moiliili-Manoa).
Yesterday, Mayor Jeremy Harris again asked the Legislature for the ability to levy additional taxes. The counties' main source of revenue is property taxes.
Harris said he supports legislation by the Hawaii State Association of Counties that would give the counties an option of imposing a general excise tax.
"This will allow us to diversify the cost of local government so that all of the cost doesn't fall simply on property-tax payers. Many other people benefit from local government services other than property owners," Harris said.
Harris said that obtaining additional taxing authority is also crucial in funding a proposed $2.6 billion rail transit system.
"If you're going to do a rail system, you can't do it without an additional revenue source. So you're not going to be able to do a transit system on the island ... unless you have taxing authority to dedicate towards the capital," Harris said.
Harris said he would prefer that a rail transit project be planned without federal funding because it would cost less, take less time to complete and have a better chance of succeeding.
But it still would still need a dedicated tax to pay for building it, he said.
Senate Transportation Chairman Cal Kawamoto said he will introduce legislation to impose a half-percent hike in the state excise tax to fund transit.
But raising taxes isn't a popular idea this session.
"In the House, any legislation that could lead to tax increases probably would have an uphill battle," Takamine said.
Taniguchi said he doesn't see the Legislature approving any tax dedicated to transit until a plan is before lawmakers.
"I think even if we're looking at any tax increase, it would probably look at some of the priorities we have in terms of education or dealing with the ice problem," Taniguchi said.
Takamine also said neighbor island lawmakers have concerns about their constituents paying a tax that would benefit Oahu only.
Both chairmen said that any proposal for additional taxing power should be coupled with a broad look at all potential sources of county revenue to see if changes need to be made.
"Before allowing additional authority ... it would be important to tie it to what (county) services are being received by the taxpayer," Takamine said.
Gov. Linda Lingle reiterated her support for counties to be given the option of levying an additional tax. Based on her experience as the former mayor of Maui, property taxes weren't sufficient, she said.
"It's an option for the county -- you don't have to charge it -- but at least you have that ability and you have to answer to your own citizens and taxpayers," Lingle said.
