Gov. Neil Abercrombie said Wednesday that he will not give up on tax relief for seniors even though state lawmakers have shown little interest in the idea this session.
The governor, who had proposed an unpopular pension tax in 2011, called for tax relief for seniors in his State of the State address in January. The governor will continue pushing for bills that would offer income tax exemptions for about 25,000 low- to middle-income seniors at a cost of about $5 million a year and would double a refundable food and excise tax credit for about 110,000 low- to middle-income seniors, a cost of about $7 million a year.
But the House and Senate have not moved the governor’s bills, and key lawmakers have said they are inclined to consider tax relief for seniors next year.
"You’ll have to ask the Ways and Means chairman why he thinks it’s a good idea not to give tax relief to seniors," Abercrombie said of state Sen. David Ige, his rival in the Democratic primary. "There’s obviously some kind of political agenda operating there."
Abercrombie said he would not concede "until that last hammer comes down on that last day and minute and second of the Legislature."
The Senate Human Services Committee heard Abercrombie’s income tax relief proposal for seniors in February and chose not to advance the bill to the Senate Ways and Means Committee, although the committee did move a version of the governor’s food and excise tax credit for seniors.
Ige (D, Pearl Harbor-Pearl City-Aiea), chairman of the Senate Ways and Means Committee, declined to advance the governor’s food and excise tax credit for seniors. Instead, he moved a bill that would potentially expand the tax credit to cover more low-income residents, who often face the greatest burden from the general excise tax.
"The general perception was that they would prefer broader-based tax credits than tax credits focused purely on seniors," said Ige, who had fought Abercrombie’s pension tax in 2011.
Rep. Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu), chairwoman of the House Finance Committee, said Wednesday that she will put off the question of tax relief for seniors until next year. She said she would be cautious about all tax credit proposals, since many lawmakers and budget analysts believe the state Council on Revenues might downgrade the state’s revenue forecast next week.
The House Finance Committee released its draft of a $12.1 billion state budget on Wednesday, which would cut Abercrombie’s budget request by about $53 million.
"Right now, we are taking a cautious approach to the budget and any type of bills" with tax credits, Luke said.
Abercrombie’s other priorities for the session are faring better than tax relief for seniors. A minimum wage increase and additional money for preschool, housing for the homeless, invasive species and climate change are still in the mix as the legislative session approaches its halfway point.
Responding to reports that the Hawaii Health Connector — the state’s health insurance exchange for the federal Affordable Care Act — will not be financially sustainable beyond this year, Abercrombie hinted at an expanded state role.
"Everybody recognizes that we can’t go forward as we now stand because it’s unsustainable financially," the governor said. "In every other instance where I have faced a financial crisis, I’ve made a hard decision and I’m moving forward. And in every instance, it’s working. And I’m confident that when we come up with the proposal — in conjunction with the Legislature, I hope — that we’ll be able to handle the question of the uninsured in a reasonable and efficient way."
Abercrombie encouraged the Legislature to listen to development plans by the state Office of Hawaiian Affairs near the waterfront in Kakaako. OHA took control of land in Kakaako in a $200 million settlement with the state in 2012 over former crown land revenue — one of Abercrombie’s biggest achievements since taking office — and OHA has since said that residential development is necessary to obtain full value from the land.
But some lawmakers want to preserve a 2006 policy decision that prohibited residential development near the ocean in Kakaako, which had blocked a waterfront development project by Alexander & Baldwin.
"All OHA is saying is, ‘Give us a chance to see if we can come up with something that makes sense in the urban core, that can get genuine community approval.’ And not have it simply shot down on sight from — I’m sorry — from many times from folks or organizations that so far as I can tell have no housing plan at all," the governor said.
Abercrombie, whose job approval ratings have hovered at about 40 percent for the past few years, said voters — not only in Hawaii, but across the country — have a general unease about the future health of the job market and the economy.
But the governor believes voters will conclude that the state is significantly better off financially than when he took office. "Job approval and votes — when you come into the voting booth — are two different things, as you see over and over again in every election," he said.
"I don’t make decisions on the basis of job approval. I make decisions on the basis of what’s good for the state."