July 1: A Day of New Burdens for Hawai'i Tax Payers

by Rep Lynn Finnegan House Minority Leader and Republican candidate for Lt. Governor www.LynnFinnegan.com

When families around our state woke up this morning, they were met with reports in the newspaper, on television and on radio about the new legislation which takes effect today, the vast majority of which are new taxes and fees on Hawai‘i residents.  

Perhaps the broadest reaching tax increase is the hotly debated barrel tax, which increases the tax on a barrels of petroleum products from 5 cents per barrel to a whopping $1.05.  Passed by the State Legislature under the guise that the proceeds would be used to support environmental response and encourage our reduced dependency on foreign oil, the actual ramifications will mean that more than $22 million per year will be taken from Hawai’i residents pocketbooks, without any substantial changes to the State’s to meet its energy independence and food security goals.  Meanwhile, nearly everything our families purchase - from a gallon of gas for your vehicle to a gallon of milk - will likely see an increased purchase price. As House Minority Leader, I am proud to stay I voted against this regressive barrel tax.  

The Legislature also moved forward with reinstituting an inheritance tax on estates of more than $3.5 million for deaths that occurred starting May 1, 2010. Now, when families are dealing with the loss of a loved one, his or her estate (which includes a myriad of components, not just real estate) will face levies starting at more than $200,000.  When this vote came to the floor of the Legislature, I voted against the death tax. 

Another cost to O‘ahu families beginning today is increased City and County of Honolulu sewer fees, which jumped 15-percent starting today.  Additionally, Mayor Hannemann has announced a pending settlement with the EPA about Honolulu’s mismanaged sewer treatment facilities and processes.  As a result of this $1.2 billion settlement, we can certainly expect even higher rates and more fees in the coming years.   

As our residents’ grapple with these drastic increases to their monthly budgets, our state’s number one industry, tourism, must work to counter the multiple disincentives placed by the State Legislature on visitors to Hawaii.  Despite Governor Lingle’s veto last session on the transient accommodations tax (TAT) or hotel room tax, the additional tax on Hawaii hotel rooms will skyrocket from 1 percentage point to 9.25 percent. As state representative, I voted against the TAT increase and against the override of the Governor’s veto.  

We will also charge our visitors for the drive to the outrageously taxed hotel room.  Effective later this year, the rental car facility charge will rise from $1 a day to $4.50 a day.  The fees will be used to help pay for plans to build $500 million of new airport car rental facilities.  While the plans are laudable, I struggle with imposing such a large fee increase on our visitors.  For this reason, I voted against raising the rental motor vehicle customer facility charge.   

Today also marks the effective date of a bill which eliminates the state income tax deduction for political contributions, increases the cigarette tax and temporarily increases certain insurance fees.  I also voted against this legislation.  

I voted against each of these tax and fee increases because I believe Hawai‘i residents already carry a heavy enough burden, evidenced by our rank as one of the most heavily taxed states in the nation.  I voted against these tax and fee increases because I believe government must live within it’s means. 

It’s time for Hawai’i residents to stand up and have their voices heard. Not just repeating the mantra of “no more taxes”, but also to show their sincerity in the voting booth this fall, but electing balanced leadership in the State legislature and our executive branch. 

Now is the time, like no other in our history, to stop the hemorrhaging of our residents’ hard-earned tax dollars. 

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