by Laura Brown, AFP Hawaii

As the old saying goes, “When you are in a hole, stop digging.”

No maxim better sums up what the 2011 Hawaii State Legislature should have done, along with what the Tax Foundation of Hawaii had to say on Senate Bill 754, which, in effect, imposes double taxation on many businesses: “Unless elected officials rein in the size and cost of running government in Hawaii, such desperate measures, such as this bill represents, may have to be adopted and in doing so will destroy the economic base of the state.”

The bill eliminates tax credits for shipping companies and airlines, among others, thus increasing costs to consumers, especially because this is an island state that is dependent on a duopoly of shippers bringing in most everyday items.

Matson Navigation Company, with an estimated 75 percent of the shipping market share here, increased its fuel tax rates this year by nearly 48 percent. And Hawaii falls under the Jones Act, which limits shippers to those operating under the American flag. That federal mandate also eliminates competition and increases the cost of everything that gets shipped into the state.

Within a week after Gov. Neil Abercrombie signed SB754 into law on June 9, 2011, under Act 105, Matson raised fees by another $52 per container in response.

The state Department of Taxation testified earlier this year that this bill “temporarily” increases revenue, aka taxes, by nearly $350 million through June 30, 2013. This increase cannot be absorbed by the businesses that provide the services, so consumers will see their cost of living in paradise continue to climb thanks to the lawmakers who passed this and several other tax increases this session.

See the newly passed law here: http://www.capitol.hawaii.gov/session2011/bills/GM1208_.PDF

The continuing rise in the cost of living has not been offset by increased productivity: gross state product decreased by $2,363 per capita in 2009, the worst decrease in the nation.

The 2011 Legislative Session began with a projected “$1.3 billion revenue shortfall,” despite the imposition of $815 million in new taxes, special fund raids and elimination of tax credits during the previous 2-year budget cycle ending June 30, 2011.

The Legislature’s solution to this “crisis” was to further increase the budget by $800 million and raise taxes once again.

Hawaii’s 2011-13 biennium budget now stands at nearly $22 billion, partially funded by an increase of $500 million in new taxes.

Meanwhile, the state carries a total outstanding debt of more than $26 billion, including debt, pension, unemployment trust funds and other unfunded liabilities.

The problem of unfunded liabilities is highlighted by the Legislature’s raid of both the Hawaii Hurricane Relief Fund as well as the “Rainy Day Fund” to provide emergency payments to the health, welfare and retirement funds.

What else have your legislators been up to and how has your family been impacted? And what can be done to right-size government in our state, while putting citizens’ needs first?

Imagine if taxpayers could put a check on government growth; if we could reverse the self-serving nature of bureaucracy to instead focus on the needs of our citizens; and if we could get control of the government checkbook.

Would we then have the basic infrastructure that we all have paid for – often many times over while the fund was being raided – for sewers, roadways, park maintenance, adequate police protection and schools in good repair that provide a quality curriculum?

It's time to go far beyond the “New Day” proposed by our governor; instead, it is time to eliminate monopolies and increase consumer choice to provide relief from an unbearable cost of living. Give people a reason to stay rather than reasons to leave.

Let's move in a new direction that will bring Hawaii into the 21st Century, moving beyond both the subservient plantation era and centralized government model of the 1960s, where few benefit at the expense of the many. Now is the time for individual enterprise, limited government and complete transparency.

We believe that the introduction of the Hawaii chapter of Americans for Prosperity will provide citizens of the Aloha State with the opportunity to join in with 1.7 million members nationwide who are dedicated to helping our states and country prosper.

LINK: DISCUSSION