A Mid-session Legislative Look

Larry Price
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Wednesday - March 18, 2009
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The state Legislature has reached the midway point in its session. It started with 1,800 bills, and the House and Senate are now down to considering about 300 bills before they reached the “crossover” point.

No one can be certain about what will happen when a House committee considers a Senate committee’s proposal. There is a lot of room for compromise in the days and weeks to come, and when it ends up in conference committee, but one thing is for certain, members of the Legislature are frantically looking for new revenues.

There are a few concepts worthy of keeping an eye on at this point.

Senate Bill 1346 would ask lawmakers to raise the general excise tax to help fund public education and provide tax breaks to low-income residents. This bill would obviously impact the small-business community, and the governor would probably veto the bill if it, in its present form, reached her desk.

Another more curious bill introduced by Speaker of the House Calvin Say, HB 1747, would eliminate the income tax for all filing categories on taxable incomes of $40,000 or less and increase the income tax for all filing categories on taxable incomes of $750,000 or more.

To no one’s surprise, the Department of Taxation and Hawaii Tax Foundation provided instant feedback on the idea. It’s not uncommon for the Speaker to float an idea to see the reaction from fellow legislators and the business communities.

The House Finance Committee noted the bill would result in a net revenue gain of $49 million, but then learned that the fiscal impact of the bill would actually result in a revenue loss of $131 million. That doesn’t mean the idea or purpose of the bill is dead. It suggests in political jargon that"there needs to be some technical, nonsubstantive amendments for clarity, consistency and style.” There were, and the bill moved out of the Finance Committee, with amendments by a vote of 15 for adoption, two ayes with reservation and zero no votes.

Providing cover for the legislators is HB 444, dealing with civil unions. Not all bills with emotional content survived. Bills that deserved to die and did include measures to ban text messaging while driving, smoking on the beach and driver’s licenses for illegal immigrants.

There is a lot of talk about our lawmakers’ reluctance to “take on” the public employee unions in the current economic crisis.

Government regulation has the advantage of protecting the interest of all employees, not just union members.

And make no mistake, government regulation is a blunt ax that can produce consequences that bear little resemblance to workplace or community reality for both workers and managers.

Example: Raising the general excise tax would generate revenue for the public education system, but would hurt small businesses and employment opportunities for workers.

It is probably not a good idea to pass legislation hoping to generate additional revenue in the short term, because standardized government rules administrated by governmental agencies are likely to present a greater obstacle to managerial flexibility than unions would ever pose.

Simply put, it’s not fair to blame public or private unions for the economic downturn we are experiencing or to suggest it is incumbent on them to get us out of it by giving up their hard-earned negotiated benefits.


In the end, no organization will put the interests of the employees over the interests of the shareholders. In this case, the taxpayers are the shareholders and deserve better treatment.

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