Thirty-seven transactions that are now exempt from the state's 4 percent general excise tax would be subject to a tax of 1 percent starting July 1, and the tax on a barrel of oil would jump to $1.55 from a nickel under proposals advancing in the Legislature.

While the tax hikes advanced, so too did a proposal to use money from the Hawaii Hurricane Relief Fund to restore the remaining 21 furlough days for public school students.

Those measures and dozens more were in play yesterday as lawmakers approach deadlines for completing work on legislation ahead of next week's start of conference committees, where House and Senate members meet jointly to work out differences and come up with the final version of all legislation.

The proposal to use Hurricane Fund money to end Furlough Fridays appears headed to conference. It advanced in the House, but with blank amounts as lawmakers wait to see whether the Lingle administration can reach an agreement with the teachers union and Board of Education on the amount needed. The two sides are $30 million apart.

Democrats defeated an attempt by the six-member Republican caucus to amend the proposal and require that the money from the hurricane fund be deemed a loan that is required to be paid back.

Finance Chairman Marcus Oshiro said the amendment was vague, with no terms specified, and was mostly an attempt by the GOP to insert Gov. Linda Lingle's plan to end Furlough Fridays into the bill.

Money bills were the main focus yesterday as lawmakers still looked to close a $1.3 billion budget shortfall.

The 37 transactions that would be subject to a 1 percent GE tax under Senate Bill 2402 include gross income generated by nonprofit organizations from certain conventions, conferences, trade shows or other events, and maintenance fees paid to condominium associations. (The complete list is online at hsblinks.com/29f.)

“;This is our alternative to raising the general excise tax,”; said Oshiro (D, Wahiawa-Poamoho).

The 1 percent tax would begin July 1 and expire after five years. Opponents, mostly Republicans, voiced concerns at the prospect of increasing the tax burden without doing enough to cut state spending.

“;The alternative is not an increase in the general excise tax; the alternative is to cut government spending wherever possible,”; said state Rep. Barbara Marumoto (R, Kalani Valley-Diamond Head). “;I think we haven't made enough of an effort in this area.”;

While passing measures to raise the barrel tax (House Bill 2421), raise the tax on cigarettes another penny per stick (HB 1985) and suspend for five years the so-called Act 221 high-tech tax credits (SB 2401), lawmakers also passed a measure giving gamblers the ability to deduct losses on state income taxes (SB 2834).

Another measure, HB 2598, takes $44 million in hotel room tax money from the counties to help balance the state budget by putting it in the state general fund. The bill barely cleared the Senate by a 14-11 vote. The House had kept the counties' money from the transient accommodations tax intact, so the two sides will have to work out the differences in conference.

    Legislature, parents pressure both sides to end furloughs

 

 

State lawmakers and parents are increasing pressure on the governor, the school board and the teachers union to end Furlough Fridays in Hawaii's public schools.

 

[ Watch ]

 

 

 

 

The Senate was forced to pull back action on the state budget because of a protest by the Hawaii Government Employees Association.

Senators had hoped to save an estimated $5 million a year, starting next year by moving public school principals from a 12-month to a 10-month contract, but a letter from the HGEA on Monday caused state Sen. Donna Mercado Kim, Ways and Means Committee chairwoman, to ask that the budget be amended and the provision removed.

“;The union says it is a negotiated item and they would have labor issues with it,”; Kim said. The bill is scheduled for a vote tomorrow.

Hawaii Supreme Court rulings have stipulated public union contracts can be negotiated only between the union and management and cannot be changed by the Legislature.

Both the House and Senate approved measures to allow voters to amend the state Constitution to allow the governor to appoint voting members of the Board of Education.

Senators shot down a bill, HB 2667, calling for the state to study the “;feasibility of establishing a statewide ferry system.”; Opponents noted the privately funded Hawaii Superferry had gone bankrupt in the face of critical state Supreme Court rulings.