Matson and Horizon monopolize Hawaii's shipping market because of the Jones Act Photo: Emily Metcalf
Matson cargo containers, Honolulu Harbor. Photo: Emily Metcalf

Matson Shipping Alerts Customers of Coming Price Hike

Matson Shipping, one of only two companies shipping cargo to Hawaii from U.S. ports, is increasing its prices again. However, this time, oil price increases are not to blame.

The company told its customers in an email that because the state legislature has removed its General Tax exemption this session, it will charge its customers for it to make up the difference.

Lowell Kalapa of the Tax Foundation of Hawaii was one of several people to warn lawmakers that removing General Excise Tax Exemptions for several categories of Hawaii businesses including shipping, airlines and construction, would lead to price increases for Hawaii consumers. And in the case of Matson, it will increase the cost of most goods coming into the state and being shipped out.

However, lawmakers removed the exemptions to raise $400 million in revenues to balance the state’s $1.3 billion deficit in fiscal years 2012 and 2013.

Matson is the first company to take action on the increase even though the governor had not yet signed the bill into law when they announced the increase June 13. Subsequently the governor did sign the tax exemption removal law.

Here is the letter:

“In order to increase tax revenues during this period of fiscal crisis, the state of Hawaii has temporarily suspended many general excise tax exemptions. The suspended exemptions include certain transportation and maritime support services such as stevedoring. This means that the state will tax carriers for a portion of the cargo costs that had previously been exempted, and the cost to carriers serving the state will increase.

“Effective July 10, 2011, Matson will implement a General Excise Tax Arbitrary to recover these extra costs. Because the calculation is complicated, Matson will implement a flat fee of $52 per container on all cargo moving to and from the state of Hawaii. This charge will appear as a separate line item on Matson’s Hawaii service bills. Our intent is to recover only the additional costs that result from the state’s action. Unless the legislature further extends the suspension, the exemptions would be reinstated in 2013 and Matson would remove the General Excise Tax Arbitrary charge at that time. We also will review the amount of this charge annually to ensure that it recovers only the additional tax costs we incur.

“The new tax arbitrary will apply to cargo moving to, from and through Oahu. Cargo moving to and from the Neighbor Islands already is assessed a Neighbor Islands Excise Tax Arbitrary of $13 per container. This tax was assessed by the state in 2004 and has appeared on Matson’s freight bills since that time. Neighbor Island cargo will continue to show this tax arbitrary on Matson’s freight bills in addition to the new $52 General Excise Tax Arbitrary that becomes effective July 10. If you have any questions, please contact your account executive or our Customer Support Center. Thank you for shipping with Matson.”

Reapportionment Meeting at the Capitol Tackles Military Issue

The Hawaii State Reapportionment Commission meetings are heating up. There is a great deal at stake – mainly how the district lines are drawn for the next 10 years – and how that will impact elections.

Wednesday, there is another meeting of the 9-member bipartisan commission headed by former Judge Victoria Marks at the state capitol starting at 10 a.m.

Last week, the commission made two major decisions: Not to consider reinstating multi-member Senate or House districts and not to revisit “canoe” districts, which set up multi island representation, other than Maui County, which does encompass the islands of Maui, Molokai and Lanai.

Tomorrow’s meeting may be contentious as commissioners will debate whether U.S. military personnel based in Hawaii (resident or non-resident) and their spouses and dependents will be included in the population count for the purposes of redistricting.

There are federal guidelines and standards that outline the procedure but state reapportionment commissions are allowed certain devitations from these standards.

Reportedly, there is several different points of view among the 9 commissioners and constituents have already weighed, with input coming from the areas of the state with a heavy military population. At this point, nothing is certain but the issue needs to be resolved as soon as possible so that the actual redistricting can take place and the newly purchased software can be applicable.

Hawaii ‘State to Watch’ In New Fuel Cells Report

Hawaii is listed as a state to watch in the newly released “State of the States: Fuel Cells in America 2011” report by Fuel Cells 2000.

California, Connecticut, New York, Ohio and South Carolina were singled out as the “Top 5” states, but Hawaii, Delaware, Florida, Maryland, and Texas are listed as “Up and Coming states to watch.”

The report said the industry is adding jobs as more than 50 MW of stationary fuel cells are installed and purchased and 1,500 fuel cell forklifts are deployed or ordered since April 2010.   Hawaii will open 25 stations in Oahu by 2015.

“Supportive state policies are helping foster fuel cell installations, company relocations and growth to help keep the U.S. at the forefront of fuel cell commercialization, despite competition from countries such as Japan, Korea, and Germany,” says Jennifer Gangi, program director for Fuel Cells 2000 and one of the authors of the report.  “Continued federal and state support is crucial to moving the emerging fuel cell industry into full-fledged commercialization for a wide variety of applications and power needs.”

Download the report for free at:  http://www.fuelcells.org/statereport.html.

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