April is tax month, so it is a good time to look at the intersection of state politics and state taxes.
Presented with budget deficits upon coming to Washington Place, much of Gov. Neil Abercrombie’s first three years in office has been defined by his attempts to raise taxes and fees.
Some of the action was to foster social policy, such as his so-far unsuccessful attempts to discourage consuming soda and other sugar-laden drinks by increasing the taxes on sugar-sweetened beverages.
Other taxes were simply to raise money.
The Tax Foundation of Hawaii compiled a list of Abercrombie’s requests for increases in taxes and fees for his first three years as governor. So far he has introduced 40 tax measures, with three passing in both 2011 and 2012.
The biggest controversy in 2011 was Abercrombie’s attempt to tax pensions and index taxes for inflation. The attempt failed but drove a wedge between Abercrombie and senior citizens, especially retired government workers.
Abercrombie defended the proposal, saying it was fair because the federal government already taxed pensions and the state needed the money, but it was a political nonstarter.
The Hawaii AARP mobilized retired state and county workers to lobby the Legislature and Abercrombie is remembered for bragging during a 2011 speech on Kauai about the AARP: "I’m not going to counter them; I’m going to roll over them."
If Abercrombie was unsuccessful in taxing pensions, two big revenue increases for the state in 2011 came when he raised motor vehicle registration fees from $25 to $45. That took an estimated $34 million a year from car vehicle owners, with the money going to the state highway fund. An additional $33 million a year was handed over by vehicle owners when Abercrombie convinced the Legislature to raise the motor vehicle weight tax.
The governor tried to again raise vehicle registration fees by a dollar to pay for administering the handicapped parking placard program, but it was killed by the Senate Ways and Means Committee.
For two years in a row, the Abercrombie administration has tried to tax plastic bags, even though all four counties are moving to or have already limited their use.
Last year, the plastic bag fee would have gone to the state environmental response revolving fund and the natural area reserve fund. This year the money was to be used to improve water quality and work on climate change programs. Both in 2012 and this year, the proposals died.
As he starts to frame his campaign for re-election, Abercrombie notes that when he came into office, the state had a serious budget deficit and he was forced to take immediate action to cut the state budget.
That is true, but Abercrombie does not include that the year before he took office, the 2010 Legislature carried out a historic set of tax increases.
Lawmakers raised taxes on rental cars, hotel rooms and wealthy taxpayers. Also, a series of tax breaks were suspended.
So while Abercrombie has continued to look for ways to raise taxes and fees, much of the politically dangerous work of taxing to balance the budget had already been done for him.
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Richard Borreca writes on politics on Sundays, Tuesdays and Fridays. Reach him at rborreca@staradvertiser.com.
