Sunday, June 26, 2022 |
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A potential $300 tax rebate for most Hawaii taxpayers faces one final hurdle in the state Legislature.
A holdover from the 2021 legislative session, Senate Bill 514 would grant taxpayers earning less than $100,000 a year a $300 tax rebate for their 2022 taxes. Taxpayers earning over $100,000 a year would receive a $100 rebate.
Gov. David Ige said earlier this year that the tax rebate would be “a recognition … that all of us have worked through COVID, and (I) wanted a way to support everyone.”
However, the rebate — which would cost the state an estimated $250 million — also would serve as a means of spending excess general fund revenues. The Hawaii Constitution requires that whenever the state’s general fund balance exceeds 5% of the fund’s revenues for the previous two fiscal years, the state must provide a credit to taxpayers or deposit money into the state’s rainy day fund.
So far, no draft of the bill has specified the size of the tax rebate. But Sylvia Luke — chair of the House Finance Committee — and Donovan Dela Cruz — chair of the Senate Ways and Means Committee — came to a tentative agreement in early April for the $300 proposal.
The passage of the bill now depends on the outcome of conference committees. A Senate communication on April 14 expressed unspecified disagreements with House amendments to the bill, requiring legislators from both chambers to come to a compromise.
The bill has not been substantially altered from its original state. However, because the bill also appropriates an unspecified sum into the state’s Emergency and Budget Reserve Fund — commonly called the rainy day fund — that appropriation may be the source of the disagreement.
In December, Ige proposed a $1 billion appropriation to the rainy day fund, but Luke killed a pair of bills that would have made that appropriation earlier this session. Luke’s committee recommended to defer one bill in February, and never agendized another in March. She said in March that she felt the appropriation was too large, given the other state projects that need money.
No date for the SB 514 conference committee has been scheduled.
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