We all agree that education has the best payback of any government spending. The Bill and Melinda Gates Foundation published a study that every dollar spent on preschool education saves us $45 over the long run. It is well known that a year in prison cost us more than a college education.
Hawaii Prosecutor Mitch Roth once told me it can cost us $200,000 a year to imprison a teenager in Hawaii! We have long passed the day when readin’, ‘ritin’ and ‘rithmetic was an adequate education for most jobs. Most entry level jobs require some interaction with a computer and computer skills are mandatory for advancement. Pidgin won’t do for interaction with the public, especially non-residents or upper management.
We now have a rather bizarre proposal that local county taxes pay for education that is managed by the Oahu-centric Department of Education. Nothing makes for bad management like spending someone else’s money, for example, two-thirds of DOE employees are not teachers!
We are often called the People’s Republic of Hawaii implying that Hawaii is socialist. We do have a functionally one-party system dominated by Democrats but when it comes to taxation Hawaii is clearly anti-socialist. Regressive taxes like the general excise tax (GET) and fuel tax get enthusiastic legislative support but the somewhat progressive property tax is untouchable.
GET, although it is represented as a tax on business, its effect is a retail sales tax that applies to the things that working people pay on every dime they spend. It does not apply to many big dollar transactions that only the well-off participate in — like investment real property, stocks or oil futures. There are some really bizarre exceptions like aircraft maintenance and, of course, the yacht or jet bought in another state or country but moored in Hawaii.
The fuel tax is charged per gallon. Who pays the most, the billionaire living at the Hilton Waikoloa Village driving a 30 mpg Mercedes sports car two miles to the Kings Shops, or the hotel maid commuting 90 miles six days a week in an old 13 mpg station wagon?
We were promised that the revenue from the increase in these regressive taxes would be earmarked for transportation but what happened?
As soon as they were passed the general fund contribution to transportation was reduced, leaving Hele-On and Public Works just as strapped. The potholes in the county maintained portions of Highway 11 keep getting bigger and more expensive to fix. Instead of a simple resurfacing two years ago it will soon require complete rebuilding. With a little effort one can think of many examples of promised use of new revenue being offset by reallocation of the old budget.
Income tax was designed to be progressive, but Republican sponsored changes to the Federal Income Tax reduce the adjusted gross income of high earners. That trickles down to Hawaii’s income tax calculations. Exempt the wealthy, so they can make more political contributions. Tax the poor, there are plenty of them.
Property taxes are not as regressive, because people who own more land than they need (like me) pay more. The classifications, homeowner rate and old age exemptions, concentrate the tax on those better able to pay. That is those whose disposable income is greater than their unavoidable expenses. The Hawaii Constitution dedicates property taxes to the counties. Now the Honolulu dominated Legislature (that calls itself the state Legislature) wants a piece of that — promising it will go to education.
Just as transient accommodations tax (TAT) was diverted to Honolulu light rail that has zero benefit to rural island residents or tourists, claiming a new tax is for education is just another example of a bait-and-switch, aka gut-and-replace, tactic. What do they really want it for? Fool me twice … won’t fool me again.
Other Peoples Republics are also known for inefficiency and corruption, maybe that is what people really mean.
Ken Obenski is a forensic engineer, now safety and freedom advocate in South Kona. He writes a biweekly column for West Hawaii Today. Email obenskik@gmail.com.