by Andrew Walden

Challenged at an April 7, 2014 gubernatorial debate over his 2011 sponsorship of a 25% GE Tax hike, Ige tried to contain the damage, telling the audience: "...the GET hike died in committee.  That is the end of the story."

Not.

Ige's HB793 SD1 would have soaked Hawaii consumers with $791M in new taxes, raising the GE Tax rate from 4% to 5% and taking a bite out of transactions again and again by eliminating GE Tax 'exemptions'.

Pushing his amended bill through his own Senate Ways and Means Committee, Ige ignited a firestorm of protest.  Consumers and small businesspeople crammed committee meetings and submitted 1,069 pages of testimony--almost entirely in opposition.

A Kahaluu resident explained: "Time and again this legislature has proven it cannot live within its means. Every time you raise the tax you spend all of the proceeds and then some, forcing you to consider raising taxes again. I say enough is enough. Cut back your spending, audit the DOE, eliminate all the waste and fraud and learn to live with a tighter budget.  All of us tax payers have had to cut back drastically on our spending because budgets have been tight. We are spending more for food, gas, electricity and clothing. Prices are going up but our paychecks are not.  To raise our GE TAX will cause prices of everything we buy to go up more than they have already. Taxpayers have no way to raise their paychecks when our budgets run short."

A small business owner from Mililani pointed out: "...a GET increase will mean layoffs and business reductions to the State's revenue source with additional impacts to SUI and not to mention crumbling new business development.  This perpetual cycle must be broken and our budget problems fixed by reducing spending and reducing government.  The State Legislature must find ways to correct our financial situation outside of tax increases."

Inundated by protest, Ige's committee rebelled.  Hawaii Reporter April 7, 2011 told the story:

Sen. Donovan Dela Cruz, D-North Shore, lead the effort to kill the tax hike. He asked fellow Senators to split the bill so only the exemptions remained.

In a dramatic and unusual twist, 10 Democrat Senate members went against their chair (Ige) to kill the tax hike.

Dela Cruz told Hawaii Reporter that his position has always been to oppose the GE increase, and to support the position of Gov. Neil Abercrombie and House against the tax hike.

He said he received hundreds if not thousands of calls, emails and faxes from his constituents, largely in opposition. “The fax machine is going off the hook and we are getting dozens of emails by the hour,” Dela Cruz said.

It is not a referendum on a power struggle or balance of power in the senate, he said. "This is way bigger than any of us," Dela Cruz said.

Realizing the tax hike might be defeated, Ige tried to delay the vote for two hours.

Senators said the chair tried to postpone the vote so several committee members would be unable to vote because they would be in other committee hearings. But the majority, who took a brief recess and met outside, then called for the vote.

The final vote to kill the GE tax hike and keep removal of tax exemptions was 10 in favor and 4 opposed.

Sens. David Ige, Suzanne Chun Oakland, Carol Fukunaga and Sam Slom voted against the measure.

Slom voted 'no' because even after stripping out Ige's $600M GE Tax rate hike, the bill still had $191M in GE Tax increases manifested through the removal of 'exemptions.'

Ige, Chun-Oakland, and Fukunaga were the three bitter-enders holding out for the full $791M in GE Tax hikes.

That is the end of the story.

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HB793 of 2011: Text, Status

Rebellion in the Senate Kills GE Tax Hike Proposal

Kona Gubernatorial Debate April 7, 2014