Intent to Veto

by Tom Yamachika, President, Tax Foundation Hawaii

On June 21st, Gov. David Ige released a lengthy list of bills he intended to veto.  The Hawaii Constitution requires him to issue that list and provides that any bills not on the list will become law, with the Governor’s signature or otherwise.

The bills on the list included a few we had been discussing in this space.

House Bill 58, what we had been calling the “Enola Gay Frankenbill,” was a mishmash of tax increases and General Excise Tax exemption suspensions.  We wrote articles discussing the exemptions proposed to be shut off; discussing the “Frankenbill” process where the bill, which at that time had nothing to do with tax increases, was stuffed with material from Senate Bill 56, which was all about tax increases; and describing its predecessor Senate Bill 56, an omnibus tax increase bill that we called the “Enola Gay” bill because of the potential for it to carpet-bomb our economy with the tax increases it contained.

In his intent to veto message, the Governor said that our economy was now looking to be in better shape so we no longer need the extreme revenue-raising measures contained in the bill.  It also didn’t help that the bill would have raised conveyance taxes on all residential housing developments, including affordable housing.

Another bill that made the list was House Bill 862, which would shut off the existing sharing with the counties of transient accommodations tax money and force the counties to impose their own TAT surcharge on top of the 10.25% TAT, 4% GET, and 0.5% GET surcharge that is already imposed on a tourist’s hotel bill.  We wrote about that bill back in May. 

This bill also holds the dubious distinction of being the winner of the League of Women Voters’ and Common Cause/Hawaii’s  “Rusty Scalpel Award” for being the most appalling bill that begins with one topic and drastically changes content in its way through the legislative proc es.

There, the Governor’s intent to veto message cited concerns about not adequately funding the Hawaii Convention Center, and also voiced concern that an added 3% county TAT “could have a major impact on Hawaiʻi’s nascent economic recovery.”

Also on the intent to veto list is House Bill 613, which among other things appropriated federal American Rescue Plan Act money to the Department of Education in great detail, and provided for a one-time stabilization payment of $2,200 for each full-time and half-time teacher.  We observed that the “me too” syndrome may be in play here because HGEA’s members, including principals, staff, and custodians, were left off that gravy train.

The Governor’s message on this one focused on his concern that the appropriations in the bill didn’t comply with federal guidance for the spending, putting the state at risk for federal recapture of the funding.

Interestingly, several bills on the veto list, including this one, were called out for lack of transparency or lack of public participation in the law-making process.  That struck this author as something unusual, and to some degree hypocritical because the Governor has suspended the State’s open records and open meetings laws for over a year, and that suspension is still in effect per the “Twenty-First Proclamation Related to the COVID‑19 Emergency” issued on June 7, 2021.  If it can be believed, it’s a good development.  It should force legislators to think more carefully about gut-and-replace, wholesale closed-door changes, or other secret maneuvers that change legislation at the last minute so the opportunity for the public to weigh in on it is abbreviated or eliminated.

Shortly, we will find out whether some of these bills will be vetoed, and shortly thereafter we should be hearing whether our legislative leaders will be mustering for possible veto overrides.  Hopefully, the bad stuff will die and remain dead.