Isle Dems focus on cutting price of paradise

A form of tax credit or refund is on the way, although lawmakers have yet to determine how much

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WITH the 2007 session starting on Wednesday, majority Democrats plan to spend the next few days finalizing their legislative packages.

While they don't know yet exactly what proposals will make the cut, they do know what themes are likely to dominate their discussions over the next four months.

"We need to help people with the cost of living," said House Majority Leader Kirk Caldwell (D, Manoa). "We hear it loud and clear -- people can't keep up with the cost of living in our state. People are leaving the state. People are falling further behind."

Similar themes have emerged among Senate Democrats.

"I think the overall theme is: How do we build a sustainable Hawaii, with a focus on families and communities," said Senate Majority Leader Gary Hooser (D, Kauai-Niihau). "We're looking at economic development, we're looking at education and a wide range of issues.

"We're really trying to take a systemic, long-view approach, recognizing the interrelationship of many of these things."

The 2007 session begins with the state in healthy economic shape. Although economists recently warned that growth is slowing, there are no signs of a recession and general fund revenues are expected to increase for a fourth straight year.

But the passage of the new year also brought with it a half-percentage point increase in the general excise tax on Oahu to pay for a mass transit system. That surcharge, coupled with a 15 percent increase in property assessments on Oahu and the expiration of a general excise tax exemption on most gasoline -- equating to an increase of about 11 cents a gallon -- has many residents upset with the rising price of paradise.

Another cloud over the isles has been cast by the New York Times and the Wall Street Journal, which have examined the housing boom that has spurred economic growth, but also priced people out of their homes and onto beaches, public parks and into increasingly crowded homeless shelters.

"I really think people are getting to a point where they're saying it's hard for us to live day-to-day in this state," said Caldwell. "We've got to make sure people can meet their basic needs."

While the size of it hasn't been determined, some form of tax refund or credit is on the way. The state Constitution requires that lawmakers return some money to taxpayers when general fund growth exceeds 5 percent in two consecutive fiscal years -- a threshold that has been met.

No one has thrown out a figure, saying they expect to carefully examine any and all tax proposals introduced this year.

"We need to comply with the Constitution and the law, but what we really need to do is look at the needs and challenges of our state first," said Hooser. "There's a lot of catching up to do in our education system, our parks and general infrastructure needs and I'm hopeful that we will address those needs first.

"I also realize there's certain segments of the population that might need it (a tax rebate) more than others, so we're going to take a long close look at all of these needs."

Republican Gov. Linda Lingle also has not offered a target figure for a tax rebate, but is expected to outline that and all of her legislative proposals in her Jan. 22 State of the State address.

Lingle last week unveiled the centerpiece of her legislative package: $30.7 million over two years to promote high-tech skills and innovation.

The initiative is part of her effort to shift the state's economy away from land development toward one based on high-paying technology, math, science and engineering jobs.

"It's the only way to preserve our quality of life, and maintain this standard of living," Lingle said, adding that a better education leads to a higher-paying job and a greater ability to make ends meet.

"There are two things that make housing affordable -- one is the cost and price, and the other is my ability as a person to buy it," she said. "That's what this (innovation proposal) addresses.

"If I make $60,000 a year, the exact same priced house is now affordable. If I can only make $30,000, it's not affordable."

Noting that education would again be a key piece of the majority package, Rep. Caldwell echoed that thought.

"Improvement in our schools, in turn, affects issues like health care and affordable housing," he said, "because these children come out with a better education, get better jobs and are better able to obtain health insurance, or purchase a home in our state."