Bad news should always come first. Really, no one likes it if you start talking about butterflies and unicorns and then gradually bring up the subject of repossessing your house.
So today we are going to talk about taxes. The bad part is the state is planning to take more of your money for things it is doing already.
So more money is not going to get you something new — just the regular stuff, but costing more.
First up is Senate Bill 1012, Opens in a new tab which would raise the state’s fuel tax from 16 cents to 26 cents per gallon, push up annual vehicle registration fees from $45 to $50 and increase the annual per-pound motor vehicle weight tax. This is to fix the roads. The fees to be increased are fees already in place to fix the roads.
Mayor Kirk Caldwell also wants to raise your vehicle weight tax and your gas tax — but not just to fix roads, but to run the yet-to-be-finished train.
Watch out because in the world of taxes, the big-ticket item is Honolulu’s train.
That is the one that was over budget in 2015, but Caldwell said then that just one extension and everything will be good. The Legislature gave permission to keep charging half of 1 percent general excise tax until 2027. Now, Caldwell says to just give the city more money forever. In Caldwell- land, 2027 is actually infinity.
“Allowing the surcharge to be extended into perpetuity ensures that the city will have sufficient funds to cover construction and financing costs of the rail project,” Caldwell told lawmakers last week.
This comes as the Senate is looking at a tax bill, SB 1183, Opens in a new tab as sort of the Swiss Army knife of tax ideas. It has a tax increase in perpetuity, plus a low-income tax credit, and then says extra money collected goes for education, affordable housing and elderly programs. It is silent on the issue of whether or not to give all residents a free kitten.
The Tax Foundation of Hawaii was not amused. In prepared testimony, the nonpartisan foundation said lawmakers “need to decide exactly what it is they are funding, and the extent to which they are willing to write the counties a blank check.”
The bill was also called a “clear money grab” with the new dollars actually going to run, and not just build, Caldwell’s train — and the Tax Foundation warning “taxpayers may well conclude that they have been lied to when the tax was adopted.”
The city’s other approach on tax policy is to just scare the money out of you.
Council Chairman Ron Menor told the Senate that if the Legislature says the city, not the state, has to come up with the money, the city knows just where to go.
“If the Legislature passes a measure that requires the city to share in the construction costs of rail, the city will in all likelihood have to tap into real property tax revenues to make up the difference,” Menor said. The translation is: “If you own a house, a store or a hotel, give us more money.”
So far the train is stalled and is looking for money at the same time the state and the city are looking for money for teachers, school kids and an infrastructure that’s mostly collapsing.
So the good news is you get the bad news first: Taxes are going up.
Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.
