Across the United States, state treasuries are cushioned by surpluses for 2006. Hawaii is expected a
surplus of nearly $600 million in excess revenue flowing into state coffers.

With such a substantial
inflow of revenue and one of the highest tax burdens in the nation, Hawaii legislators have the
opportunity to return money back to taxpayers in the form of rebates or tax cuts.

However, despite the surplus revenue, some big spenders and special interests are calling for tax hikes.
Hawaii Sen. Rosalyn Baker (D-5) has introduced a bill that would increase the cigarette excise tax
by $1.20 has passed through the Senate Committee on Health and is currently in the Senate Ways and
Means Committee.

If passed, Senate Bill 2961 would increase the cigarette excise tax from $1.40
to $2.60 per pack over the next three years, making Hawaii the state with the highest cigarette
tax burden in the country.
Tax increases in any form act as drains on a state

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