Getting Hit By The Governator

Rick Hamada
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Wednesday - March 12, 2008

The relentless assault on the Hawaii taxpayer/consumer does not necessarily originate from our own elected officials.

In a recent radio conversation with Chamber of Commerce president Jim Tollefson, we were reminded of continued efforts by the state of California to increase container fees on items shipped from Golden State ports. A bill being considered at the Capitol in Sacramento, SB 974, known as the California Container Tax Bill, would impose a $30 fee on each 20-foot equivalent unit.

Since we import approximately 90 percent of our consumable goods in Hawaii (most through California), this tax would cost Hawaii residents an approximate additional $68 million. The price tag would translate to about $57 for every man, woman and child in the state per year. A family of four would have to pay more than $225 per year in additional expenses. I know this does not sound like much to some (Rep. Calvin Say would dismiss this as “plate lunch” money), but this is real cash that makes a real difference to families in our community.

The Chamber of Commerce of Hawaii petitioned Gov. Linda Lingle in 2007 to intervene by explaining to California Gov. Arnold Schwarzenegger how this increase would negatively impact Hawaii. He agreed and publicly spoke in opposition to this initiative. However, California Sen. Alan Lowenthal, D-Long Beach, despite tabling the bill last year, has introduced SB 974 for the third time.

Although the proposal has failed in the past, it seems the bill is being fast-tracked this time around.

One of the reasons is Gov. Schwarzenegger himself. He has become more “green” in his policies and priorities, and now says, “I think fees are good. We just have to work it out with the various stakeholders.” He continued to say, “It’s extremely important that we find a way to create economic development and increase trade, but at the same time take care of our environment.”

Oh boy. The translation is this bill has the support of the Governator and, although we have a vested stake in the passage of this tax increase, I don’t hear a great deal of consultation with the Hawaii people on this issue. Clearly, another Republican governor has capitulated to the left in justifying onerous tax increases in the name of environmentalism.

Can anything be done? Requests to Gov. Lingle would be the first step. Hopefully, our congressional delegation would chime in and help us, too. If there is deafening silence from these state leaders, then you can rest assured the prices on just about everything will rise commensurate with the “fee” increases initiated by a California state senator.

By the way, if you thought the $68 million increase on goods shipped to Hawaii was bad enough, there are two recent tax increases benefitting California port authorities that will be in effect this October. The combination of these fee increases total approximately $30 million. If the container tax is applied, the increased cost of shipping to Hawaii consumers will total almost $100 million. This translates to about $340 for a family of four. Ouch.

Aside from political lobbying, there is another recourse: the courts. There are questions raised about the legality of this legislation. Containers moving through ports are considered interstate commerce, and the taxing authority is reserved for the federal government. Can a state supersede federal authority?

Until this question has been definitively answered, perhaps we can stave off another money grab.

If not, brace yourselves. Living in Hawaii just became more expensive.

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