Hawaii's pricey technology tax credits are likely to come under fire this year from lawmakers trying to find a way to pay for schools, charities and government services.

Legislators say they will take a hard look at the credits, which have cost the state $747 million in lost tax revenue from high-tech investors since they were started in 1999.

Critics of the program argue that technology is not taking off in a state struggling to diversify its economy, but tech backers claim the tax breaks have helped the industry create thousands of high-paying jobs.

“;Everything is up for grabs this session,”; said Sen. Carol Fukunaga (D, Lower Makiki-Punchbowl), chairwoman of the Senate Economic Development and Technology Committee. “;It makes sense to look at all credits and exemptions, with the perspective of whether or not they're still needed.”;

She will push for research into whether the state's investment in technology companies is paying off.

“;How much money in economic activity is being returned in exchange for these dollars?”; asked Rep. Angus McKelvey (D, Olowalu-Kapalua), chairman of the House Economic Revitalization, Business and Military Affairs Committee.

Investors claimed $105 million in tech tax credits in 2006, according to tax figures.

Many lawmakers want to see changes to the credits law—rather than a full repeal—so that it focuses on research and development instead of enriching investors. More than 95 percent of the credits were claimed by individuals with incomes over $200,000 in 2006, according to state tax data.

“;The public doesn't like to see the rich enriching themselves through these types of tax credits,”; said Rep. Glenn Wakai (D, Moanalua Valley-Salt Lake). “;The lesson learned is not to get rid of Act 221, but tweak it and change it to meet the goals of developing a legitimate high-tech industry.”;

Under the current act, investors can deduct their entire investment in tech companies from state taxes owed over a period of five years. The money from the credits goes to movie and TV productions as well as high-tech enterprises and is never paid back to the state.

Technology companies understand that state services will suffer because of the poor economy, but now is not the time to end a long-term project to grow new business opportunities, said Lisa Gibson, president of the Hawaii Science and Technology Council.

“;The visionaries who came before us have succeeded. These industries have taken root,”; she said.

Lowell Kalapa, president of the Tax Foundation of Hawaii, said he wants the tax credits thrown out altogether because the tax money saved by wealthy investors has to be made up by the rest of the state's residents.

“;When it comes down to the wire and legislators see their favorite programs being cut, they're going to think twice about the high-tech credit,”; he said.