Lawmakers Open Session With Skepticism Of New Taxes

Jan 21, 2021

The main task facing state lawmakers this session will be to plug the $1.8 billion hole in Hawaii’s budget. Leadership signaled a reluctance to accomplish that through raising taxes.

  Hawaii’s looming concrete capitol building was mostly quiet on Wednesday, the official Opening Day of this year’s legislature.

Passing motorists honked in support as thousands of Hawaii flags fluttered in the breeze. They covered the Capitol grounds, put in place by several native Hawaiian cultural groups.

Most years, including 2020, thousands of people and community groups flock to the seat of state government to meet lawmakers and join celebrations.

However, the scene this year the scene was much different. Health measures had already closed the capitol to public. By the time of Opening Day, entrances to the capitol were blocked by security barriers with signs reading “Government Property, No Trespassing.”

Dozens of police officers also stood watch as a precaution. All a response to the January 6th storming of the U.S. Capitol by insurrectionists seeking to block the certification of Joe Biden as President.

However the scene outside the Hawaii capitol on Wednesday was calm. There were no significant protests to speak of and lawmakers formally initiated the legislative process.

Their main focus over the coming months will be passing the state’s spending plan for the next two years. Maui Senator J. Kalani English described the challenge facing the state as “extraordinary.”  

 “How do we balance a budget with a huge downfall in revenues, at the same time balance the health and safety of our people, and at the same time keep an economy going?” English said, speaking via Zoom

The pandemic has reduced state tax revenue by almost $2 billion. That money will have to be made up by either raising taxes or cutting government spending, at a time when government assistance is in higher demand than ever.  

Lawmakers in both the Senate and the House expressed their opposition to any tax increase that would fall on local residents or businesses.

Some left the door open to raising additional revenue through some kind of narrow tax increase on visitors to Hawaii. An additional surcharge on rental cars was floated as something that would spare residents, while still generating funds for the government.

However, the general consensus was that raising taxes will not be the solution to the state’s financial woes, a view expressed by House Speaker Scott Saiki.

“People are starting to question whether higher taxes result in better government or better government services,” Saiki remarked following Opening Day proceedings.

“There is not a clear answer to that question.”

Instead lawmakers may pursue policies aimed at improving collections from existing taxes by boosting the economy or reducing expenditures within the state bureaucracy.