The legislative session hit its midway point, and the focus is still on managing federal funding impacts.
The crossover deadline means that if a bill was introduced in the House, it needed to pass by Thursday and be sent to the Senate, and vice versa.
One of the key negotiations between the chambers is a proposal to adjust the planned income tax cut. It was supposed to ramp up over the next five years, but now, future cuts are being reconsidered due to federal funding cuts.
The House and Senate have passed different proposals.
The Senate’s version preserves the future income tax cuts for most people, but pauses them for the top five highest tax brackets.
Senate Ways and Means Chair Donovan Dela Cruz explained that it’s part of a larger plan to recover funds to respond to federal government cuts.
“Looking at vacancies, looking at special funds, looking at different programs that might be duplicative, looking at all the different aspects within state government that we think could be reduced,” he said.
“So going back to a shared burden of some of the taxpayers taking on this burden because of the current situation, the businesses taking some burden and the government taking some burden.”
The House’s bill would put a pause on further tax reductions in the following years. But there would be a 1% rate increase for the top three income brackets.
This comes as the Council on Revenues, which dictates the state budget, froze its forecast from 2027 through 2032 because of uncertainty at the federal level and the current war in Iran.
On Wednesday, the House also passed its version of the state’s $10 billion budget, which will next be taken up by the Senate. It includes allocations for climate resiliency projects that will be paid for using the state’s new "Green Fee" on hotel accommodations and cruises.
Both chambers have passed measures that would protect immigrants from enforcement. For example, the Senate passed a measure that would ban local and federal law enforcement from covering their faces, with some exceptions.
The House advanced measures that would prohibit immigration enforcement without a judicial warrant in sensitive places like schools and hospitals, and would bar local law enforcement from signing into an agreement to be deputized as ICE agents.
Senate President Ron Kouchi added that housing is still a pressing issue.
“At this point, getting more affordable housing units is paramount. ... We need to get together around that so we can do everything else, but if the housing cost is too high, then we're not going to be able to recruit or keep our people,” he said.
“ As tourism has slowed, we want to see that we are able to make that investment in our infrastructure so the construction industry can be a stronger leg on the stool. Tourism has carried us for so long, and they're not going to be able to do that in this current environment.”
While many measures have stalled this session — like marijuana legalization and gambling — because it’s the second year of the biennium, bills that have survived crossover last year can still be considered this year, although it’s rare.
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