Bills, on their way to becoming laws, that promote fiscal transparency.
News Release from Office of Sen Sam Slom, February 5, 2014
HONOLULU—Senator Slom says “It is important that Hawaii taxpayers have a better understanding of how their tax money is being spent and it is government's responsibility to be more transparent. These measures will contribute to that process. ”
Two important bills (SB2153 and SB2519) that promote greater fiscal transparency and protections for Hawaii's taxpayers passed the Ways And Means Committee today.
· Tax expenditures, which are defined as tax credits, exemptions, deductions and exclusions, are used to advance public policy objectives and are therefore no different than regular government spending. However, in contrast to regular spending, tax expenditures are less transparent. Tax payers not only deserve to know how much is being spent through regular appropriations, but also how much is provided through tax incentives. SB2153 will require the Department of Taxation to provide an annual report on the estimated costs of all tax expenditures.
SB 2519 (Introduced by Senator Ige)
· Under the current state constitution, spending from the state's general fund is constrained by the growth of the economy. The general fund expenditure ceiling, which was adopted during the constitutional convention of 1978, limits the growth of general fund spending to the three year average growth in state personal income.
· To reach the current expenditure ceiling, the legislature is allowed to spend $1.5 billion in additional spending, which amounts to 25 percent of the current general fund. Because the general fund expenditure ceiling is outdated and unpractical, SB 2519 proposes to reset the base year for the calculation of the general fund expenditure ceiling to FY2014. Under this proposal, the general fund ceiling will effectively be reduced to $300 million.
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