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By Keli‘i Akina
Thanksgiving is at our doorstep and Christmas is simply across the nook, however all the pieces will not be joyful.
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Contemplating Hawaii’s excessive price of residing and the nation’s report inflation, many Hawaii households are taking a tough take a look at their funds and calculating how inflation and recession will have an effect on their vacation plans, if not their complete financial futures.
However there’s some excellent news: Hawaii has a state price range surplus of about $2 billion, and that’s anticipated to develop to about $10 billion over the subsequent 4 years. It additionally has $800 million in its emergency reserve, or “wet day” fund.
All of which is to say: It’s an ideal time for our returning and newly elected state legislators to chop taxes and take away obstacles to financial progress as a option to decrease the state’s back-breaking price of residing.
One good place to start out could be to exempt medical companies from the state common excise tax. Not solely wouldn’t it assist decrease our healthcare prices, it additionally would assist tackle the scarcity of medical professionals in our state.
Should you haven’t accomplished so already, I encourage you to signal and share the Grassroot Institute of Hawaii’s petition asking for simply such an exemption, which yow will discover right here.
And sure, a GET exemption for medical companies would scale back state tax revenues by about $200 million a 12 months. However contemplating the dimensions of the state’s price range surplus, lawmakers may minimize taxes much more and nonetheless come out forward.
One other concept could be to decrease the GET charge typically. Lowering its charge by simply 1 share level — from 4% to three% — would put $1 billion {dollars} again into the financial system and have the bonus impact of benefiting low-income earners who spend a better proportion of their revenue on the tax.
Our lawmakers may additionally slash our revenue tax charges, that are the second highest within the nation. And in the event that they wish to assist the tourism business, they might scale back the transient lodging tax, which initially was purported to be solely momentary anyway, leaving vacationers with extra money to spend within the personal sector.
The purpose is, there are many methods our legislators may put a refund into the pockets of Hawaii taxpayers. All that’s wanted is a little bit artistic pondering — and empathy for Hawaii’s struggling households.
Paradoxically, we discovered simply this week that the state went to the bond market to borrow $800 million — which, oddly sufficient, is identical quantity as within the wet day fund.
We may ask why the state wants extra taxes, charges or bond debt, particularly when it has such a cushty price range surplus. However regardless of the cause, it’s nonetheless an ideal time to chop taxes, trim pricey laws, scale back obstacles to housing and, typically, work extra significantly to decrease Hawaii’s exorbitant price of residing.
A state legislative decision urging Congress to reform the Jones Act, which provides to Hawaii’s delivery prices, additionally could be good.
In any case, we will all see that Hawaii residents are having a tough time as it’s, and the longer term is worrisome.
Lawmakers can do their half to assist flip this round, retaining in thoughts the excellent news: the state price range surplus.
What an exquisite vacation reward it might be if our state legislators let or not it’s identified that decreasing Hawaii’s excessive price of residing is to be their main focus within the coming new 12 months.
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Keli‘i Akina is president and CEO of Grassroot Institute of Hawaii.
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