Excise tax collections belong in state hands

THE ISSUE Bills to transfer tax collections to the city or a private company remain in play in the first go-rounds at the state Legislature.

THE state tax director's distress about the "hardship" that collecting a transit tax would place on his employees seems a bit contrived when considering that one of his department's functions is to do just that -- collect taxes.

Lawmakers should dismiss his breast-beating, save taxpayers the expense of another bureaucracy and reject a misguided plan that would privatize not only the transit tax work but all state excise tax collections.

Rather than force the city to duplicate the state's system at a cost estimated at tens of millions of dollars, the Legislature should leave current law as it stands. The only change that might be warranted is to specify that part of the 10 percent in revenues the state will take off the top of the transit surcharge go to the department for additional staff.

That may have been Director Kurt Kawafuchi's aim when he told lawmakers to "think about the hardship and burnout" that taking in the 0.5 percent excise tax surcharge, designated to help fund a transit system for the city, would place on employees.

If so, he should have made his case straightforwardly since the collections probably will require more work.

The conflict between the state and the city about who will be responsible for administering the surcharge is the result of a compromise after Governor Lingle threatened to veto the authorizing legislation last year. The governor said the city should do the work since it would be the beneficiary; lawmakers promised to consider that this year if she let the bill go.

However, what has emerged is a plan to turn over all excise tax collections to a private company, an extreme solution to what seems to be a minor problem. The move could expose confidential information, and more importantly, cede accountability to an organization less responsive to taxpayers, primarily businesses that charge consumers, then transfer revenue to the state.