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GE Tax, Tsunami Relief, Law Enforcement Memorial, Vehicle Fees & Public Labor Costs

June 16, 2011
Maui Weekly

Recently, I received a letter from a Maui businessman who said he had to lay off workers and cut pay 10 percent to keep his business in operation. He said he is thinking of adding some positions again, but is hesitating, because if his taxes go up, he will need to lay off workers again.

On a positive note, the minority caucus has been unified against a raise in the general excise (GE) tax. This is a regressive tax that affects all levels of commerce in Hawai‘i. Not increasing the GE tax is the right step to help our state move forward towards recovery.

The minority caucus has worked hard on proposing an alternative budget this year without increasing any taxes. You can see the minority caucus budget at hawaiistatebudgetonline.com.

Tsunami Relief

HR 157 & HCR 187 are resolutions that request support for emergency prevention efforts related to the March 2011 tsunami for the counties of Maui and Hawai‘i. This resolution requests that these counties maximize “available matching funds for federal reimbursements.” I co-sponsored this resolution along with other Neighbor Island representatives.

State Law Enforcement Memorial

HB 1622 HD 1 was signed into law by the governor as Act 014 on April 25. This is a very simple bill which states that a “law enforcement memorial” shall be built with private funds in the Capitol District. The memorial will honor members of law enforcement in Hawai‘i who have given the supreme sacrifice of their lives in the line of duty.

I was a co-sponsor of this legislation and was present when Gov. Neil Abercrombie signed the bill into law.

Increases in Vehicle Fees

Two bills that will sting Hawai‘i drivers this year are SB 1328 and SB 1329. I voted against both bills. SB 1328 will increase the flat-rate vehicle registration fee by $20. SB 1329 will double the vehicle weight tax. Depending on the weight of your vehicle, the overall impact of these two bills may be between $40 and $100 more than you currently pay to register your vehicle.

I spoke out on the floor of the State House against HB 1101 (House version of SB 1328). I offered an amendment to the bill that would require the funds raised to remain in the state highway fund. Unfortunately, the amendment was not accepted. Surprisingly, there were members who argued from the floor that it is a good thing to raid the state highway fund to transfer to the general fund.

Public Labor Costs

While it is true that the Legislature balanced the budget, I feel that lawmakers this year failed to address the real issue—the high cost of labor. The House Finance Committee was briefed on the rising cost of the employee retirement fund (ERF), which has grown to become a $9 billion-plus unfunded liability. The only state with a larger unfunded liability of state government employees is New Jersey.

The public sector labor costs, including the ERF, are the proverbial 800-pound gorilla in the room. In other words, this is the true issue that needs to be addressed. Unfortunately, lawmakers in this year’s Legislature have once again avoided this issue and passed on a liability of about $7,600 to each citizen of the State of Hawai‘i. This issue cannot continue to be swept under the rug. I am committed to speaking about funding of the ERF at the Legislature so it can be properly addressed.

If you need to contact me with any issues or concerns regarding South Maui, please call my office at (808) 586-8525 or email repfontaine@capitol.hawaii.gov.

 
 

 

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