Just Which Programs To Cut?

by Lowell L. Kalapa, Tax Foundation of Hawaii

During the past few sessions lawmakers hung their hats on a strategy that they hoped would help generate additional tax dollars without having to adopt any explicit tax increase like an increase in the general excise tax rate.

However, this session it seems all bets are off, everything is on the table from an increase in the general excise tax rate to fund education to new fees on cell phone use to the administration’s proposals to tax sugary drinks and single-use bags. One would think with the governor hailing economic recovery and potential surpluses that there wouldn’t be a need to raise taxes. Obviously that is not the case. Instead, as one representative of the governor’s office asked, “Which programs are you gonna cut?”

And, readers, that seems to be the problem. Elected officials don’t want to step on anyone’s toes by cutting some constituent’s favorite program. In other words, they have to keep everyone happy by continuing this or that program even though it may mean raising taxes and fees or imposing new ones. In the case of existing taxes like the general excise tax, they have been sure to tie the increase to motherhood and apple pie issues like education. In the case of the conveyance tax increase and the single-use bag fee, it is tied to the restoration of the Islands’ watersheds.

What is disturbing is that the comments from the governor’s staff seem to indicate that either: (1) they are unwilling to cut any program in fear of offending someone; or (2) they are incapable of setting priorities for your tax dollars. In the case of the former, the unwillingness to make cuts is indicative of the lack of courage to make decisions that are unpopular even though they may be for the good of the entire community. In the case of the latter, one has to ask why did these folks run for public office if they can’t set priorities?

And where have these people been during the last five years as the economy went into the tank? Do they think that families have fully recovered from the economic downturn that they can afford to give up even more in taxes and fees? Do they really believe “happy days are here again?”

This is the same road that our national lawmakers took over the past decade as they added program after program while continuing to fund the wars abroad. At a time when it was politically incorrect to not support the troops over there, federal lawmakers continued to expand domestic programs and entitlements. After all, they had to keep the masses happy by handing out the peanuts and popcorn. Certainly at the federal level where they have the ability to merely print more money, they pushed the debt higher and higher to the point where they could not live without the continued funding of both domestic and foreign programs.

Now local elected officials find themselves in the same pickle, not wanting to ire a beneficiary of a program, but not being able to fund existing programs while wanting to embark on new programs. To a large degree it is shell game - find a new fee or tax linked to some sort of bad behavior or emotional issue and shift the responsibility for funding those programs or services from the general fund to special funds which benefit from these new fees and user charges.

Lawmakers can then turn around and tap the money that has been freed up in the state general fund for their new programs. But for taxpayers, it should be a real concern because this administration and this legislature appear to have no empathy for the poor taxpayers. Much as they may decry that they represent the poor and downtrodden, they - as elected officials - are doing everything possible to pile on more and more of a tax and fee burden.

Individually, each of these proposals seems harmless - a penny here, a dime there - it doesn’t seem like much, but put them altogether and families will be hit with a substantial whack to their pocketbooks next year. Surprisingly, even the media seems to be immune to what is going on at the legislature as they focus in on the individual proposals. They too have been lulled into “feeling good” that issues such as childhood obesity and watershed restoration are being addressed without comprehending the overall financial impact that many of these fees and taxes are creating.

So it is up to you, as the taxpayer, to weigh in as to whether or not you are willing to shell more out from your wallet for more government. Lawmakers need to hear from you.

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