Rallying Against A Tax Increase

Rick Hamada
By .(JavaScript must be enabled to view this email address)
Wednesday - May 05, 2005

An essential component of democracy occurred at TheBigSquareBuilding last week. The halls were filled with chants from caring and pro-active citizens demanding “no new taxes” from their state Legislature. Although the rally boasted close to 300 people in attendance, the true success was in the passion behind the protesters’ messages.

The core of our protest — I asked my radio listeners to join the protest — centers around HB1309, which authorizes counties to levy a surcharge on the state General Excise Tax of 1 percent, increasing the present rate of 4 percent to 5 percent, a 25-percent increase. The justification for this proposed increase is the construction of a rail transit system. In concert with local efforts, U.S. Rep. Neil Abercrombie maintains there must be a defined funding mechanism before the federal government will consider financially assisting Hawaii to the tune of approximately $500 million.

According to a recent Honolulu Star-Bulletin poll, more than 70 percent of those responding are opposed to a GET increase. My KHVH poll indicated more than 90 percent of the listeners participating are against the GET increase. Despite opposition of citizens and their vocal opposition, there has not been any acknowledgement of their opposition by Democrats, and some Republicans, in the Legislature. As a matter of fact, there is a tremendous amount of arrogance and smugness exhibited by some supporters of the tax increase and rail “proposal.”

We all need to understand a couple of things about this situation.

First of all, as of this writing, the legislative conference committees are still in session. It will take a miraculous dose of clarity and responsibility for the conferees to kill HB1309 and its partner HB1645. If these bills are indeed eradicated, I will give up wine for a week. But if it so happens the bills pass conference as of this writing, it will mark one of the most reckless fiscal actions taken by any legislative body in the history of our state.

I’d like to reinforce the fundamental disagreement regarding the need for a GET increase.

It is found in the fact that there is no rail transit plan to fund. The shaky generalizations cited by supporters like state Rep. Marilyn Lee and state Sen. Willie Espero are vague and unfounded. There is no data that supports their claims the rail transit system, whatever it may be, will improve the quality of life of commuters and will allow them to spend more time with their families. How? Can you tell us the route? The technology? The points of origin and termination? The ridership? The fare? What happens when the train gets to its last station? Will there be buses, trolleys, vans or cabs? Will our surface streets be able to handle the additional, larger vehicles? What about commuters who need to be mobile and flexible for their jobs or to pick up their kids from school?

What we do know is even if a rail project were to be approved, it will take from seven to 10 years to complete. The cost is an estimated $2.7 billion. A 25 percent increase in the GET will generate anywhere from $300 million to $400 million per year in collections. State Department of Transportation director Rod Haraga estimates the annual cost of maintenance to be $50 million. He states definitively there will be a need to subsidize any system constructed.

So who pays?

Not the federal government. Its contribution is finite and ends at $500 million.

This means you and I — and our children — will be paying $2.2 billion out of our pockets. Add an additional $50 million per year for operation and maintenance. Oh my.

Oh, and ever heard of cost overruns?

It is clear there has been a lack of discourse between supporters and detractors of the GET increase and the phantom rail system. So even if the Legislature authorizes counties to increase your tax, there will be a small window of opportunity to debate this issue before the counties make a decision.

I am offering my radio program as an open forum for folks on both sides to converse, debate and talk to the people of this state. Are you willing to defend your respective positions?

The assault on taxpayer pockets is unprecedented this session. Not only are we battling a possible increase in the GET, but we are also threatened with millions taken from us to publicly fund elections. HB1645 calls for an ad valorum tax on your automobile. A similar proposal resulted in the recall of former Gov. Gray Davis in California. If passed, this would be a double taxation on your car because you already are taxed at the county level via a vehicle weight tax. And let’s not forget the bottle tax and a move to increase the conveyance tax.

Please urge supporters of the GET increase and rail system to openly debate these issues in an open forum. We must demand information from both sides so we can make better decisions for our community.

Finally, if the GET increase for the counties moves forward, get ready to pay a visit to Honolulu Hale.

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