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DENNIS ODA / DODA@STARBULLETIN.COM People milled around the hallways of the state Capitol yesterday on the eve of today's legislative opening. They includded Lillian Koller, right, Jack Tweedie and Debra Chassman.

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Legislature opens
with talk of tax cuts

Democats want to explore ways
to ease middle-class burdens

Star-Bulletin Legislature Database Star-Bulletin Legislature Guide (PDF, 1.9 MB) State Legislature: Bills & Hawaii Revised Statutes

A booming local economy is fueling new talk of tax cuts as the state Legislature opens today.

Senate Democrats, who in previous years urged tax increases to balance the budget, are now looking to reduce state taxes.

Senate President Robert Bunda is expected to call for a review of state tax policy and also examine ways to lessen the tax burden on Hawaii's middle class.

Because the state's income tax brackets are designed so that almost everyone, even the poor, must pay taxes, Bunda said that a family earning $70,900 a year is "taxed in the same bracket as a family with an annual income of $900,000."

"Let me put it to you another way: Two experienced school teachers with a combined taxable income of $80,000 would be taxed at the same rate as one of our top CEOs," Bunda said in remarks prepared for delivery this morning. "This is simply not fair.

"Maybe it is time for a tax cut for the middle class; maybe it is time to review the entire system."

He is suggesting a change to state income tax brackets, which would "bring our tax laws more in line with economic realities in Hawaii."

"It could also provide long-term tax relief to our middle-income families," Bunda (D, Wahiawa-Pupukea) said.

Republican Gov. Linda Lingle has also called for a modification of state tax brackets to lower the standard deduction, which would eliminate state income taxes for Hawaii's working poor.

Republican Senate leader Fred Hemmings noted in his speech that it was because of Lingle's restrictions of the state budget that "for the first time in a decade, we can implement a state budget that lives within our means."

Hemmings (R, Lanikai-Waimanalo), in remarks prepared for delivery today, said that the booming economy should not signal a new round of state spending.

"We face well over $200 million in new obligations, including $160 million in increased debt costs, $70 million more to increase public employee fringe benefits and the list goes on," Hemmings said.

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DENNIS ODA / DODA@STARBULLETIN.COM State Rep. Pono Chong, sitting, conferred yesterday with staffer Janis Higaki while his mom, Helena Chong, talked on the phone.

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"The point is, any increase in tax revenues has already been spent. It is prudent for each of us as legislators to recognize that we cannot fund everything," Hemmings said.

Hemmings did call for the state to hold another constitutional convention. The last one was held 27 years ago.

"We have seen increasing 'ballot initiatives' that are needed to override judicial activism. Some would say that a few of the codicils in our Constitution need to be eliminated altogether," Hemmings said.

In the House, Republican leader Galen Fox took up the newly announced drug plan of Lt. Gov. James "Duke" Aiona, saying, "It is time we put prevention first, treatment second."

"Prevention is more than after-school programs. Prevention must include helping police intercept drugs before they reach young people. The police need tougher laws," said Fox (R, Waikiki).

Fox also said in remarks prepared for delivery today that the state should support "voluntary, confidential drug testing in schools to help families, as families fight drugs."

Fox called for lawmakers to "fix the bottle bill." The mandatory bottle recycling bill, Fox said, "is our worst piece of legislation since the infamous 'Van Cam' bill five years ago."