{"id":10176,"date":"2022-01-08T03:55:48","date_gmt":"2022-01-08T13:55:48","guid":{"rendered":"http:\/\/thefilipinochronicle.com\/backup\/?p=10176"},"modified":"2022-01-08T03:55:50","modified_gmt":"2022-01-08T13:55:50","slug":"budget-windfall-should-be-shared-with-taxpayers","status":"publish","type":"post","link":"https:\/\/thefilipinochronicle.com\/backup\/2022\/01\/08\/budget-windfall-should-be-shared-with-taxpayers\/","title":{"rendered":"Budget Windfall Should Be Shared With Taxpayers"},"content":{"rendered":"\n
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by Joe Kent

<\/em>Hawaii lawmakers are wracking their brains about how to balance the state budget, only this time, the problem isn\u2019t too little money, it\u2019s too much. And maybe some of it should go back to Hawaii taxpayers.

Here\u2019s the background: Gov. David Ige drafted his proposed state budget for fiscal 2023 thinking that tax revenues for fiscal 2022 would be 4% greater than the previous year, based on projections from the state Council on Revenues. But on Dec. 20, he revealed that revenues for the first five months of fiscal 2022 had increased by 27.3%<\/a>.

If that pace continues, the state could see up to $1.7 billion more in tax revenues than originally expected, according to Grassroot Institute of Hawaii calculations \u2014 and that is not counting the $1 billion Hawaii received in federal American Rescue Plan aid for the fiscal 2022 budget and the additional $286 million in such aid for fiscal 2023. It also does not include the $2.8 billion Hawaii is to receive from the recently enacted federal Infrastructure Investment and Jobs Act<\/a>.

How could this windfall benefit Hawaii taxpayers?

Hawaii\u2019s Constitution requires that any \u201cexcess revenues\u201d be given back to taxpayers, if the revenues are over 5% for each of two successive fiscal years. That is exactly the situation we are in today, as the state\u2019s revenues increased by 8.1% in fiscal 2021 and are projected to show a 6.3% gain by the end of fiscal 2022.

Unfortunately, the state Constitution doesn\u2019t specify exactly how much should be returned, which is how lawmakers were able to give just $1 back to each taxpayer in 2008, when the constitutional requirements also were met. Then-Sen. Sam Slom rightly called the puny tax rebate \u201cdemeaning.\u201dIn the current situation, a more respectful option could be for the state to distribute $1 billion of its recent windfall cash to Hawaii\u2019s 734,673 taxpayers, or $1,361 per taxpayer.

That would be a welcome amount for most Hawaii taxpayers, who have suffered considerably under two years of lockdown orders that have damaged all manner of economic activity in the state, squashing businesses and spiking unemployment.

But there is a hitch: Over the years, the constitutional tax-refund provision has been amended to also allow excess revenues to be saved for a rainy day or be used to pay down debt or unfunded liabilities.

In other words, the excess funds could be used to pay down Hawaii\u2019s $26 billion of unfunded liabilities or $13.6 billion of bond debt, or they could put into the state\u2019s rainy day fund, which, in fact, is what Gov. Ige is proposing to do, to the tune of $1 billion. All would be good moves, although Ige\u2019s preference to replenish the rainy day fund, in particular, would prevent that money from being refunded to taxpayers.

However, even if the windfall were not refunded directly to taxpayers, there still would be plenty of room to lower state taxes, which would be a refreshing change from the deluge of tax-hike proposals we see each year.

Moreover, supporting tax cuts would be in step with Hawaii citizens, 70% of whom believe their taxes are too high, according to a recent poll of nearly 1,000 Hawaii residents conducted for the Grassroot Institute by marketing research firm Anthology.

At the very least, lawmakers should not add to the state\u2019s tax burden, and the governor, to his credit, has stated that he is not planning any tax increases for fiscal 2023, which starts in July.

Ultimately, a tax refund and tax reductions would help Hawaii the most in the long run, since our economy typically ranks as one of the costliest places in the nation to start a business. Any gesture favorable toward economic growth would foster general prosperity and pay dividends in the form of greater tax revenues.

JOE KENT<\/strong> is executive vice president of the Grassroot Institute of Hawaii.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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