Gov wants legislators
to cut taxes

A special session to override
vetoes should also include
measures for relief, Lingle says

As Hawaii's economy continues to soar, Gov. Linda Lingle and some legislative leaders are saying this summer is the time to cut taxes.

Lingle said at a news conference yesterday that if legislators are coming back this summer for a special session to override any of her expected vetoes, they should also come back to cut taxes.

"I would certainly hope that if there is a special session this summer -- and glancing over the vetoes that might occur, I think there would be a special session -- we would expect tax relief to be a critical part of the agenda for the Legislature," Lingle said.

According to the state Constitution, the Legislature would have to meet July 12 to override any vetoes. At the same time, lawmakers could call a special five-day session to introduce legislation to cut taxes or address other issues.

Senate President Robert Bunda, who opened the legislature in January with calls for middle-class tax cuts, said he agreed with Lingle.

"If we are talking special session, we should consider tax relief," Bunda said.

"We need to engage our constituents. Despite the good economy, a lot of people are still struggling. They are struggling on one pay check and they want to feel we are listening," Bunda (D, Kaena-Wahiawa-Pupukea) said.

But House Speaker Rep. Calvin Say said he doesn't think the state has enough extra money to absorb tax cuts that could cost the state up to $60 million a year.

"I would say be cautious," Say (D, St. Louis Heights-Wilhelmina Rise) said. "Yeah, we may have the resources here today to pay for a tax cut, but would you rather have a cut in taxes and not have the revenues to face fiscal problems in the future?

"If you are anticipating the growth in the economy, are you also anticipating federal cutbacks and collective bargaining?"

Rep. Lynn Finnegan, the House GOP leader, disagreed, saying the economy can support a tax reduction.

"If we come back in, we should be working on tax relief immediately," Finnegan (Mapunapuna-Foster Village) said.

The June forecast by the state Council on Revenues was 4.6 percentage points higher than the growth estimate predicted in March.

The increase means the state will have an estimated $158 million in additional revenue for the fiscal year that ends June 30.

Lingle urged that lawmakers think of ways to make the state taxes more progressive, so that those earning less pay a smaller percentage than those earning more.

"It should be progressive and it should be substantial. It should help those who are having a tough time making it and it should be enough to make a difference," Lingle said.

Bunda said a special session is still "up in the air."

"It is still fluid, I am still trying to feel out a special session or even if we can have a veto override session," Bunda said.