With one day remaining in the 2011 regular legislative session, hope dims for laws that help businesses survive, reduce taxpayers’ burden and shrink out-of-control government spending.
The best that can be said about this session is what bills did NOT survive, such as: a 1 percent increase in the general excise tax; a 10-cent fee for a plastic or paper bag to carry consumer purchases; tax-free pensions that will now remain untaxed; Lanai and Molokai will not be covered with windmills to produce power for Oahu, saving Hawaii taxpayers an estimated $3 billion on an intra-island, under-water cable; and competition for shipping services that did not get eliminated as was included in a Public Utilities Commission clarification bill.
Here are the kinds of bills that did pass:
HB1039 – motor vehicle rental surcharge was increased to $7.50 a day, with $4.50 of that charge going directly into the general fund. In 2009, when a $2 surcharge was first imposed, it was supposed to go entirely into the special fund to build rental car facilities at state airports. The fee was to sunset on August 31, 2011. No facilities were ever built. This bill suspends the original facility surcharges until June 30, 2012. The $7.50 surcharge will now be divided into $3 to go into the state highway fund and $4.50 to go into the general fund. The second-to-last SD2 version of this bill called for floating bonds to build the car rental facilities, but in the last CD1 version of the bill, the bonds have been removed with no mention of building the car rental facilities.
As if SB2840 from last year wasn’t restrictive enough (requiring at least 80 percent of workers on all construction procurements – not just public works projects – to be Hawaii residents) this year’s SB1221 puts in yet another restriction that says the last payment of the project will be withheld until the 80 percent requirement is met. Really, the project will be nearly done, and then the project owner can withhold payment until the contractor or subcontractor hires 80 percent local workers? This mandate conflicts with contract law for private projects, in that a contractor or subcontractor can put a lien on a property if they do not receive payment. So doesn’t this mandate only apply to public works projects?
SB1520 is the precursor to the passage of the Akaka bill, referred to as the “Native Hawaiian Government Reorganization Act.” This bill pushes Hawaii closer to dividing its citizens into two separate groups: Native Hawaiians vs. everyone else. While this is an attempt by the majority of the 76 state lawmakers’ to convince Congress that Hawaii wants yet another government entity here, what is repeatedly being denied in this effort is a way for all Hawaii citizens to vote on this matter on a state level.
Helpful business/economic bills that died:
SB318 — Gives a tax credit to build a movie studio in Hawaii. So much for giving businesses incentives to create jobs and improve the economy, as well as promote Hawaii to the world;
SB268 — Requires a fiscal impact statement for any proposed legislation that calls for an appropriation or which will result in significant fiscal changes for the state; and
SB715 — Repeals the 10 percent ethanol by volume requirement for gasoline sold in Hawaii for use in motor vehicles.
The Legislature has one more day to approve any more bills for this session, and then it’s up to the governor to determine whether a bill is good enough to pass into law.
If, after raising fees, repealing tax credits and raiding special funds, the state budget is not balanced, the governor still has the executive power to cut lawmakers pay, including his own. That action would at least show citizens that the budget shortfall does indeed mean everyone must share in the responsibility to balance the budget.
To link to an overview of Hawaii’s budget, go to Sunshine Review, which says:
State legislators agreed on a final version of the state’s $11 billion FY2012-13 budget, which relies on pending tax increases generating $500 million over the next two years to fund the spending plan to balance the state’s $1.3 billion projected shortfall. Although legislative leaders said that the budget has $600 million less than that proposed by the governor, overall, the new budget increases state spending from FY2012. That is due to multiple factors, including rising Medicaid enrollment, the end of federal stimulus funds, and increasing public worker health expenses.;
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