Governor to reject bills increasing taxes


POSTED: Tuesday, May 05, 2009

On Thursday, Gov. Linda Lingle plans to go public with her veto pen as she holds a ceremony in the state Capitol atrium to veto at least two tax bills passed by the Legislature this year.

Lingle called bills to raise the hotel room tax and increase state income taxes for high income earners, Senate Bill 1111 and House Bill 1747, “;seriously detrimental to our economic health.”;

The Legislature is expected to return Friday to attempt to override the vetoes, although neither bill is popular with lawmakers.

“;We will have to educate the members once more on how important it is to balance the budget with these tax bills,”; House Speaker Calvin Say (D, St. Louis Heights-Wilhelmina Rise-Palolo Valley) said in reaction yesterday.

The Legislature needs two-thirds of its members in both the House and Senate to override the vetoes.

“;I think we will be able to override,”; said Sen. Donna Mercado Kim, Ways and Means Committee chairwoman. “;Nobody likes to raise taxes, so this is something we are all struggling with.”;

In a news conference called yesterday to protest the Legislature's action on a series of measures, Lingle said the tax bills “;will delay our ability to recovery in this economy.”;

Lingle, who has vetoed more bills and seen more of her vetoes overridden than any other Hawaii governor, called the Legislature “;clearly focused on special interests and not the general public.”;

“;I invite you to join me. ... We want to get the Legislature to rethink its position, and we want to draw a distinction between how we operate in public with rational explanations and how they have operated this session behind closed doors with no rhyme or reason,”; Lingle said.

So far Lingle has spotlighted only the income tax and hotel room tax bills as veto candidates, but she had previously targeted HB 1741, a bill to raise the conveyance tax on housing sales of more than $1 million.

Kim (D, Kalihi Valley-Halawa) said yesterday the hotel room tax would add “;one dollar on a hundred-dollar bill”; and that it was manageable.

Lingle and hotel operators have disagreed, saying their room rates are already cut and that any increase will hurt Hawaii's tourism.

“;It will make it harder for the state to get its economy back on track. It will cause more business to fail, and more families will be in dire straits,”; Lingle said.

The income tax increase is on incomes of more than $3 million, Kim said, adding that it was affecting a class “;that could afford it.”;