HILO — A House-Senate conference committee breathed new life Wednesday into Mayor Harry Kim’s request for a general excise tax surcharge by extending the deadline for the County Council to approve the measure.
It’s estimated the half-cent county surcharge to the state tax would add $50 million annually to county coffers.
But so far, the council has been reluctant to pass it. After letting a March 31 deadline run out, the council is expected to take up the measure at its May 9 meeting. Only three of the nine council members voted in favor of the bill in committee.
Kim has been lobbying the Legislature to give him more time to persuade the council the tax increase is needed. With time running out before the May 3 end of the legislative session, the mayor asked legislative leaders to pass an extension anyway.
“I again thank you for letting this bill advance this far, and for giving me the time to round up the votes at the Hawaii County Council to approve a GET surcharge,” Kim told Senate Ways and Means Chairman Donovan Dela Cruz and House Finance Committee Chairwoman Sylvia Luke in an April 19 letter. “I have done what I can to secure the necessary votes, but I have not yet succeeded. I haven’t given up, but I know you cannot wait forever.”
A half-cent GET surcharge would add 54 cents in tax to a $100 expenditure. Currently, all the GET collected, 4 cents on the dollar, goes to state, not county, coffers.
HB 2587, approved with amendments by the conference committee Wednesday afternoon, contains two deadlines, Kim said. It also expands the allowable uses for the money, so that up to 40 percent of the proceeds could be used for non-transportation purposes and up to 2 percent could be spent on private roads used by the public.
If the council approves the surcharge and Kim signs it by June 30, it would go into effect Jan. 1. If the council passes it and the mayor signs it by March 31, 2019, it would go into effect Jan. 1, 2020.
Kim said Wednesday that he’d like to pretend the second deadline doesn’t exist and just concentrate on the first one.
“I have to keep pushing for what I think are the needs of this county,” Kim said, naming mass transit, police and homeless services as priorities. “Nobody wants to raise taxes … but this is about the future of this island.”
Council Chairwoman Valerie Poindexter, who previously voted against the county measure, Bill 102, said the changes to the allowable expenditures could cause procedural hurdles to the bill.
“The question is, do we have enough time,” she asked.
“The bill would need to be amended to reference the new act that provides for the extension,” she said. “Here is where it gets tricky. If the parameters of allowable expenditures are changed to allow for other types of expenditures, a new bill would need to be introduced. This would start the entire process over again, which includes a public hearing.”
The House conferees passed the extension 3-1, with Luke and two fellow Democrats voting yes, and Oahu Rep. Gene Ward, a Republican, voting no. The Senate conferees included Big Island Democratic Sens. Loraine Inouye and Kai Kahele. They voted yes.
This is just insane! The Council has wasted funds on raises, given outrageously high contracts to members of da Hui and have been irresponsible in executing their fiduciary responsibilities. NO MO MONEY!
This is exactly what I predicted back when he got elected almost two years now. Harry Kim has no problem spending and growing government at our expense. Contract hires, insane raises to department heads, including himself, dumping money we don’t have into broken projects….the list goes on and we read it every day. Giving him more money will never solve the problem for this compulsive spender, he will only waste money and grow government to unsustainable levels yet again. Lets not forget Harry Kim promised he would restore trust in government, IS THIS TRUST?
Trust? In most parts of the country he’d be in prison for his years of corruption.
If he was in Korea his home town they would be dragging him through the streets along with big riots. I was in Korea for two years they don’t mess around with criminal politicians.
Time to vote out corrupt Inouye & Kahele! Kim failed as usual to implement a massive tax increase on the poor and these wackos give him more time to pull off this heist? If any of these 3 were actually Democrats they would be pushing a massive GE tax DECREASE, not an increase. I’m time to seriously consider recalling Kim. His corruption is exceeded only by his incompetence.
well said…..run for mayor
Hardship Harry could you please stop staving the children of Hawaii island. Not everybody makes 170,000 a year like yourself. You have forgotten why your in office. It’s obvious money changes people and their MIND SET. Too bad for us the tax payers. Decrease decrease that’s what I’m voting for next.
Mayor Kim has no respect for the working people of this island. He’s wants to increase GE taxes which will hurt the poor and working poor (they spend almost all their income on daily necessities, which will see a 12% increase in GE taxes). All while he accepts a 30% raise for himself.
His level of arrogance and entitlement is simply beyond belief. Any council member who votes for this shouldn’t even consider running for re-election or other offices, as the people will remember this for a long time.
well said
Harry Kim has never seen a tax he did not love. The county is really out to squeeze every nickle out of its citizens it possibly can. Then they will raise their pay again and go on trip after trip all on the taxpayers dime. Are you getting the point? They are nickle and diming us to death.
vote any political hack out of office if they vote for tax increase…..only taxpayers or citizens vote for increase in taxes,no one else
“A half-cent GET surcharge would add 54 cents in tax to a $100 expenditure.” Well not really.. before this $100 is taxed we have already paid income tax, property tax, plate fees, gas tax so we only have $40-$50 after the government gets their take. GET it? No more!
Good point! We pay lots of taxes. The GE tax, however, is one of the most regressive and damaging to the quality of life for Hawaii residents.
One thing we need to understand about the GE tax is that nearly every good or service transaction is taxed: food, medicine, clothes, gas, medical supplies, rent, vehicle sales, personal care items, furniture, consulting services and so on. And, they are taxed at every transaction, so the actual cost of the GE tax is much more than 4.166% because as an item or service moves through the economy, it’s taxed at every transaction. It’s not a sales tax;. I’ve seen estimates that it adds up to 12%+ to cost of many goods and services by the time they reach the end user. So, Mr. Kim’s proposal to increase the GE tax 12% would be multiplied as it affects the cost of good and services on the island.
It’s a horrible, regressive that that impacts our island’s most fragile–the poor and working poor disproportionately.
It’s also horrible for island businesses that compete globally for tourists’ dollars and businesses that have any competition from outside of Hawaii–nearly all when you consider the options available in our global economy.
Here’s an example. A sub-contractor buy wood and pays 4.166% on the purchase of that wood. He then charges is contractor 4.166% tax on his bill to the contractor. The contractor then charges 4.166% on his bill to the homeowner. And, of course, the architect would charge the contractor 4.166% and the contractor would charge 4.166% on the architect’s part of the final bill to the homeowner. That’s why Mr. Kim’s 12% increase in the GE tax will affect everyone much more than the ill-informed statement that “A half-cent GET surcharge would add 54 cents in tax to a $100 expenditure.” Technically true–it adds 54 cents per $100, but that $100 has gone through many parts of our economy and has been taxed many times!