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    Should We Lower Taxes?

    The Hawaii State Tax Watch Doggie told me that he can convince me that tax cuts for everyone, such as some of the bold cuts that Governor Green is proposing, are not advisable for us today.  (Actually, he can’t really talk, but he can type on my keyboard, and if I get in his way he’ll bite me on the schnozzola.)

    “The only reason why tax cuts are being proposed is that we have a budget surplus.  Surpluses aren’t forever.  They’ll go away in a year or two.”

    But the State has recurring revenue, namely taxes. If we only spend what we take in and no more, we won’t have to eat into the surplus. We have a bigger problem with working families being unable to make ends meet. Even the most recent census numbers show that we are losing people, and the national Tax Foundation has observed that low-tax states are where many people are going. What are we going to do if government spends more and there are fewer people to share the cost?  

    “But even you would admit we have current needs.  Roads and bridges, for example.  Our airports.  Deferred maintenance at schools and universities.  How are we supposed to fund those if we’re cutting taxes permanently?”

    Maybe that’s a good argument for spending some of the surplus, to make up for disastrous planning decisions made in the past when we didn’t have money.  But in any event we have a large number of people who can’t make ends meet, which shows us that something is very wrong with the system we have now. 

    “Shouldn’t all or a large part of this manna from heaven go to our hard-working state employees who have been chronically underpaid, our teachers for example?  We have been asking them to tighten their belts for so many years now, and now we have some funds available to help make up for their past suffering.”

    We’ve been asking most of our population to tighten their belts and put up with tax increases.  Isn’t it time to give them broad relief as well?  By the way, state employees are taxpayers too, so relief for all or most taxpayers should benefit them too. 

    “Look, we already give relief to our poorest residents.  They have a GET exemption for food bought through the WIC program or other public assistance. And they have income tax credits, several different kinds. Are you seriously suggesting that we cut taxes on the wealthy, who clearly can afford to pay our current taxes?”  

    What I am suggesting is that relief be given to those between ‘our poorest residents’ and ‘the wealthy.’  Many of these folks are working two or three jobs and are barely getting by.  I don’t think you can call those folks wealthy (although they might be considered that in other states where the cost of living is much lower).  And, when it comes to thinking about those who ‘clearly can afford to pay our current taxes,’ you need to remember that when they are fed up with our tax and business environment, many of them are able to do something about it like buy a one-way plane ticket to the Midwest, Texas, Florida, or the Carolinas perhaps.  Many of our local nonprofits and news media have been collecting stories about people who have done just that.  Here’s a story from the Grassroot Institute, for example.

    Well, after reading this, who do you think had the better of the argument?  If you have an opinion on the issue, you might want to consider letting your legislators, such as your state representative, state senator, or county council member, know where you stand.  They’re supposed to be working for us, by the way, not the other way around, so they should be listening to their constituents.

    Gov. Green has opportunity to let the sun shine in

    By Keli‘i Akina

    With a new governor and a new Legislature now in place, Hawaii’s leaders have the opportunity to make a bold statement for government transparency and accountability. 

    The only question is whether they have the political will to do so.

    Given the various scandals that have rocked Hawaii in recent years — such as the mailbox conspiracy, which cast a shadow on the Honolulu Police Department, and the admission by two prominent legislators that they had accepted bribes — it is no surprise that Hawaii residents lack faith in the integrity of state and local government. 

    If corruption can thrive despite the existence of multiple oversight and ethics agencies, then we need something stronger. In other words, we need sunlight.

    Keli‘i Akina

    As the saying goes, “Sunlight is the best disinfectant,” so one important way to help restore Hawaii’s lack of trust in government is more sunlight — that is, more transparency in government. 

    Who can forget the fact that Hawaii was the only state to suspend its open records law during the pandemic?

    At the time, government watchdog groups warned about the ramifications of then-Gov. David Ige’s anti-transparency order. But we have never explored what it revealed about the state’s attitude toward transparency in general: that transparency is an inconvenience, something that is an unnecessary part of government work, easily dispensed with in an emergency.

    If that’s the position of the head of the state, it explains why it can be a struggle to get public records released. 

    As the Grassroot Institute of Hawaii and other public interest groups have learned firsthand, the success of an open-records request depends largely on the agency and people you contact. Some agencies are helpful and prompt in disclosing information. Some ignore you. And some send you six-figure estimates for your record search and copying.

    Earlier this month, the Grassroot Institute was among two dozen community and media organizations that signed on to a letter to our new governor, Josh Green, asking him to “establish strong leadership supporting an informed electorate” via a series of executive orders to improve transparency. 

    The proposed orders included requiring a presumption of openness that discourages agencies from invoking exceptions to disclosure unless necessary, a change in the approach to record request fees, and guiding the state Office of Information Practices back to its intended role as a guardian of the public interest.

    The governor’s initial response to the letter was positive, with a representative of his office promising the Institute that the executive branch will take transparency seriously and consider the requests in the letter.

    I understand that transparency may not seem as urgent to the governor as Hawaii’s housing crisis, inflation, the economy or any number of other issues, but this issue should not be pushed to the back burner. 

    Gov. Green has an opportunity to make a strong statement for openness as his term begins. This will resonate through every state agency and go a long way toward improving the public’s trust in government.

    Not only the governor needs to act. The Legislature can accomplish many of the same goals via laws that strengthen transparency. 

    Last year, it considered a bill that would prevent agencies from using high costs to discourage public record requests. It wasn’t passed, but this year it should be.

    The Legislature should also stop any efforts to curb open records with new exemptions. Last year, it created a working group to study the possibility of a “deliberative process” exception to records requests. Given the opposition to such an exception from public interest groups, there is no place for such an exemption in an open and transparent Hawaii.

    The governor and the Legislature can change the anti-transparency culture that has pervaded Hawaii government, but only if they make a strong declaration in favor of open records and sunshine. 

    Consider it part of our pandemic recovery plan. As a state, we aren’t going to be able to cure the bias towards secrecy without a strong dose of sunlight.
    ___________

    Keli‘i Akina is president and CEO of Grassroot Institute of Hawaii.

    More Temporary Tax Fixes Considered

    The elections have been held.  We know who the new Representatives and Senators are.  The Hawaii legislative session doesn’t open until Wednesday, January 18th, but you’d better believe that legislators have been busy already. 

    Unlike in Washington, D.C., our House for some time has picked a Speaker and our Senate has selected its President.  They have organized their respective chambers into committees which, in addition to considering bills and resolutions within their designated purview, are tasked with overseeing various Executive Branch agencies.  The House and Senate money committees, in particular, have been holding informational briefings with the various state agencies, to hear their plans for the upcoming fiscal biennium and to evaluate their budgetary requests. 

    At one such briefing on January 4, the Department of Budget and Finance testified that the Green Administration is considering another tax rebate this year, but this one would be targeted to middle-class and low-income residents grappling with the extremely high cost of living here.  (The Hawaii State Tax Watch Doggie points out that Hawaii has the most expensive pizza in the country, which to him is an unmitigated disaster.)

    The talk of a tax rebate, however, is far from encouraging.  It indicates that the Administration is now thinking about a temporary solution (a tax rebate) for a permanent problem (stratospheric cost of living).  Another tax rebate might be a sweet-sounding fix for one year, maybe two, and passing one would give lawmakers an excuse to punt for yet another biennium on grappling with the high taxes, costs, and fees that have given us the national spotlight—and not the good kind.

    Lawmakers are also considering additional or expanded credits that would give relief to people on the lower end of the income spectrum, such as the food/excise tax credit.  One of the problems with credits, however, is that they tend to be fixed amounts so that after a few years of inflation the credits do progressively less for people receiving them.  Those can also be thought of as temporary fixes.

    As we have written before, our lawmakers have a tendency to enact temporary taxes and let them spiral out of control into permanent problems.  Why can’t we use the opportunity that a better economy gives us to enact permanent fixes?

    Is the worry that the public worker unions will howl and moan?  Over the years, they howl and moan for more money whether the economy has been good, bad, or indifferent.  Economy bad?  “Our members are suffering and need more pay.”  Economy good? “Our members deserve more pay and you now have the money to pay them.”  Economy indifferent?  Choose either or both of the above narratives.

    The English poet John Donne wrote in 1623 that “No Man is an Island.”  It’s true that we are on an island, actually several, but that doesn’t make us lose our connection with the rest of our country and with the world.  Even now we are being compared with other states and countries.  The pizza news that the Doggie found is just one of many examples.  These comparisons motivate people.  They motivate some people to buy a one-way ticket out of here.  Our population continues to decline.  Even our state DBEDT is telling us, based on U.S. Census Bureau data, that we lost thousands of people in the last fiscal year ending June 30, 2022.  There are 42 more people per day moving out of Hawaii to another State than moving to Hawaii from another State.

    We need fixes.  Not the temporary kind.

    Reduce property tax rates to offset higher property values

    By Keli‘i Akina

    Hawaii’s population has been declining for six straight years, and if policymakers don’t do something quickly to avert the looming increase in county property taxes, that is likely to continue.

    That’s because taxes are a key component of Hawaii’s high cost of living, which surveys show is the No. 1 reason people have been leaving.

    As I wrote in my Dec. 17 column, “Counties should not profit from Hawaii housing crisis,” the potential spike in county property taxes is due to higher property assessments, which in turn are due mostly to high home prices and accelerating inflation.

    Since property taxes are based on property assessments, the counties stand to receive a windfall of tax revenues — without even having to raise their rates.

    Keli‘i Akina

    No doubt, some county officials would love to get their hands on that extra money. But for Hawaii homeowners and renters, it would mean an unanticipated and possibly disastrous higher cost of living. It would mean having to sacrifice spending on things such as food, medicine, clothing, transportation and simple entertainment just so they can keep roofs over their heads.

    Is it any wonder so many Hawaii residents are struggling to make ends meet, that so many people in the state have left or are planning to leave, and that so many residents are homeless?

    I am not making this up. This is really happening. And it looks destined to continue happening — unless county officials step up and find ways to counter it.

    For example, a respected, longtime local couple wrote in Honolulu Civil Beat on Thursday about how they will have no choice but to increase the rent for their long-term tenants if the new assessments result in higher property taxes. In their own case, their Kailua home just moved up to the county’s Residential A (Tier 2) property tax category, which doubles the tax rates of nonowner-occupied homes worth more than $1 million.

    For county lawmakers who haven’t settled on what to do about this situation, I have a few suggestions:

    >> In the short run, lower the property tax rates to offset the valuation increases. 

    >> Another short-term option is homeowner exemptions.

    >> In the longer run, all the counties should review their property tax systems to eliminate favoritism and promote simplicity and fairness.

    >> On Oahu, Council members should take a hard look at the Residential A classification, which applies to all nonowner-occupied residential properties. It might be best to eliminate that designation altogether, but at a minimum, its Tier 2 threshold should be substantially increased from $1 million, which is too close to the median Hawaii home price.

    >> To ensure that property taxes don’t spike in future years, the counties could put a cap on how much the property tax revenue can increase in any given year. For example, the average annual increase over the past decade was 6.05%, so a limit of about 5% a year would prevent the counties from profiting from Hawaii’s housing crisis.

    >> In general, at both the state and county levels, taxes should be lowered. Whether we’re talking about property taxes, income taxes, corporate taxes, excise or other taxes, tax reduction is one of the most powerful tools we could use to make Hawaii more prosperous and affordable.

    This isn’t a time for half-measures. County lawmakers must act now to prevent a damaging property tax increase. Let us end the trend of people leaving Hawaii, which has been tearing apart our families and communities and weakening our economy.

    This isn’t just an opportunity to prevent a crisis. It could also be the first step toward making Hawaii more affordable for everyone.
    ____________

    Keli‘i Akina is president and CEO of Grassroot Institute of Hawaii.

    Gov. Green responds positively to groups seeking greater transparency

    The following was issued as a news release by the Grassroot Institute of Hawaii on Jan. 12, 2023.
    _____________

    In a Jan. 6 letter, over two dozen community and media organizations suggested changes that could be implemented by executive order

    HONOLULU, Jan. 12, 2023 >> Hawaii Gov. Josh Green has responded favorably to a letter signed by more than two dozen community groups and media outlets that urges executive action to ensure greater government transparency and open records, according an official with the Civil Beat Law Center for the Public Interest.

    Brian Black, the law center’s executive director, said in an email sent Monday to signers of the letter that the governor “responded positively” to the Jan. 6 letter and told him during a phone conversation that he had already tasked the state attorney general to evaluate it.

    Black, who spearheaded the letter, said the governor also expressed a desire to be more available to the media.

    In a separate statement issued yesterday to the Grassroot Institute of Hawaii, one of the groups that signed the letter, Blake Oshiro, senior adviser in the Office of the Governor, said, “Gov. Green believes in the importance of transparency, and his administration will adhere to all legal requirements to ensure requests for information are taken seriously.”

    Oshiro added that the Jan. 6 letter “set forth several legal positions and citations which we will need some time to digest.”

    Keli‘i Akina, Grassroot Institute president and CEO, praised the governor’s remarks.

    “I am glad Gov. Green was receptive to the idea of promoting transparency in state government,” Akina said. “The Jan. 6 letter lays out a clear path to guide the administration toward making Hawaii’s state government more accessible and accountable to the public.”

    In addition to the Grassroot Institute of Hawaii, organizations that signed the letter were the League of Women Voters of Hawaii, Common Cause Hawaii, the Tax Foundation of Hawaii, the Hawaii Appleseed Center for Law & Economic Justice, Earthjustice, Environment Hawaii, Life of the Land, Hawaii’s Thousand Friends, Friends of Mahaʻulepu, Maui Tomorrow Foundation, the Sierra Club of Hawaii, ACLU of Hawaii, the Hawaii Health & Harm Reduction Center, the Hawaii Innocence Project and the Community Alliance on Prisons.

    Media organizations that signed the letter included the Hawaii chapter of the Society of Professional Journalists, the Hawaii Association of Broadcasters, Honolulu Civil Beat, Hawaii Public Radio, KHON2, KITV, The Maui News, Hawaii News Now, Big Island Press Club, Media Council Hawaii,  the Hawaii chapter of the Asian American Journalists Association, All Hawaii News and Ililani Media.

    The letter to the governor suggested three major policy changes Gov. Green could implement via executive order.

    >> “State agencies should presume that government documents are public and invoke exceptions to disclosure only if they must, not simply because they can.”

    >> “Requests made in the public interest — by news media and nonprofit organizations that seek to educate the public — should be charged, at most, only actual copying costs, not massive search, review, and redaction fees.”

    >> “The Office of Information Practices must serve its original purpose, which is to promote openness, consistent with the spirit and intent of the public records law.”

    Akina agreed that these three actions would go a long way toward promoting government transparency. He also stressed the need for accountability.

    “It is all too easy for government bureaucrats to become unaccountable,” he said, “which is why the public, the media and watchdog groups must all continue to press for greater transparency.”

    To read the entire letter to the governor, go here.

    What Name Does Your Pet Have For YOU?

    When we make friends, one of the first things we share are our names. It’s also one of the first things we learn about ourselves, too. Everyone knows their own name, or should. And as we get to know the world around us, we give everything names. Much language is dedicated to simply naming things. 

    But personal names are very special. Of all the sounds we hear, we love our name the most. It is a unique sound that we identify as meaning ourselves. In a whole universe of things with their own names, we have a specific identifier that sets us apart from everything and everyone else. We love hearing our names so much that salespeople deliberately use our names to get us feeling good and willing to buy whatever they say after that. 

    The first thing we do when we get a puppy is give him or her a name. To teach the puppy their name, for example, Rover, we say it over and over, and after a while Rover comes over. The question is, does Rover come over because he learned he is Rover, or does he come over because there’s a treat to eat?

    Do animals really understand the names that we give them?  Or is this all human romanticism and anthropomorphism, and their name merely a Pavlovian bell?

    I think any dog owner will tell you, without doubt, that dogs know their names. Their name is the same whenever you speak with them, so they hear it a lot and listen up whenever you say it. They know that, after hearing you say their name, whatever gibberish comes next out of your mouth has something to do with them. 

    Try this some time. Talk to someone about your dog while your dog is making believe they are not listening. You will see the dog respond whenever they hear key words, like food, eat, hungry, walk, park, swim, ball, catch, come, no, bad, good, and their name. They’ll lift their head, cock an ear, and respond emotionally to whatever they think you said. 

    Language is something we humans like to think is exclusive to our species. That’s because we’re species snobs, and think intelligence is essential for language, and that we are the only species with intelligence. That’s why we called ourselves Homo sapiens. Sapiens is Latin for wise. We’re the wise guys of the animal kingdom. When other animals speak, it’s not language. It can’t be. That’s just for us.

    It’s important to maintain an image of animals as unintelligent. It allows us to justify exploiting them. It depersonalizes and objectifies animals so we can be mean to them and not feel guilty. And yet, we give our pets names, and expect them to know it. We don’t give them credit for language, but still expect them to understand their name, which is a component of language. 

    If animals can know the names you give them, then they possess an understanding of the category of “name”. They could, therefore, have names for others, including for people. 

    From my own experience, my German Shepherd, Molly, would look for the other dog, Pumpkin, when you asked, “Where’s Pumpkin?”.  And Molly would find her ball when you told her to. I told her both these things without any body language giveaways, and she understood what I was telling her.  I can say with complete certainty that every single person who has lived with a German Shepherd would insist that their dogs know what you are saying.  And if you have more than one dog, each will know its own name as distinct from the names of the other dogs. 

    Cats will know their names, too, but they don’t get as excited when you say their names as dogs do. Cats will come when you call, and each cat will know its own name. They probably know what you’re saying, too. But they don’t typically seem to care as much as dogs do. 

    Lots of people also have pet rats. I once unintentionally developed a relationship with a rat named Sarah. She was a pet store rat, and was supposed to be food for a snake. But her lack of fear bored the snake, and she survived. We took her in as a pet, and she became a pampered rat. I gave her jaw massages, which she really needed. She let me roll her on her back and tickle her belly, as she closed her eyes and concentrated on the feeling. And she got to know her name, and came when she was called.

    Birds have remarkable language ability and clearly know the names people give them. And anyone who has observed a flock of chickens will see complex relationships between the birds that must include naming of one another and of things around them. They’re not clucking for nothing, you know. 

    Snakes and lizards never come when they are called. They also don’t have vocal cords, like rats, cats, dogs, and people. They rarely have anything to say that we humans can hear, apart from a hiss or clicking sound. Calling them just isn’t in their communication vocabulary, although you might try a hiss. For a snake and lizard, it’s largely body language, and perhaps some odor.  It’s possible that their names have a particular smell to them.

    People also have pet fish. You can give them each personal names, but none will come when you call. If fish have names for one another, they would probably not be made with sound. After all, they need to communicate within a water medium, which has different properties than communication in the air. 

    As humans, we use our voices to create names. To understand that name, an animal will need a voice and ears, and a brain that can process it all and understand what is said. You do need intelligence to speak, after all, despite what you hear people say.  The more intelligent the animal, the more sounds it can distinguish, and the more uses it can find for those sounds as part of a language.  

    Dogs come when you call their name because they know their name. This means they have a sense of identity, of being an individual distinguished from other individuals who have their own names.  Any animal that can respond to its human-given name must have names for others, including for humans. It makes you wonder what Fido is called by his dog friends and by the cat. 

    Of course, since you are in a relationship with your pet, there will be times you call them, and times they call you.  After all, you control their food and water and other needs. They are probably using your name more than you realize. The problem is most pet owners don’t know their pet-given names.

    Attentive pet owners need to learn these animal languages and when your pet is calling you. Otherwise, your pet will feel you are ignoring them, or are too unintelligent to understand language and your own name. 

    Tax Word Find

    Now that the New Year is off and running and we are quaking in our boots waiting for our Legislature to reconvene, here are some of the ideas that we have been following.  We’ve put them into a Word Find puzzle for your amusement.

    Our Governor was thinking of proposing a new namesake, a tax on tourists called a VISITOR GREEN FEE.  It would be imposed on any visitor to a park or beach but may be prohibited by the U.S. Constitution’s PRIVILEGES and Immunities Clause.

    Our Department of Transportation has been doing several studies and is going to propose a ROAD USAGE CHARGE which is supposed to replace the current gas tax.  Others have been proposing a CARBON TAX which would be based on carbon dioxide emissions and would be a lot more expensive, at least according to the bill introduced last year.

    Housing advocates have proposed an EMPTY HOMES TAX to get at those nasty people who buy homes in Hawaii but don’t live in them.  State lawmakers unsuccessfully tried attaching it to the CONVEYANCE tax but the fit was awkward at best.  The problem is that only the COUNTIES have the right to charge a REAL PROPERTY tax, and some of the counties were thinking of imposing an empty homes tax themselves.

    Governor Green proposed a General EXCISE exemption for food and MEDICINE, which would be quite a lot of tax relief for ordinary people.  Opponents point out that existing exemptions for FOOD STAMP purchases (yes, I know that is old terminology) and RX DRUGS, as well as income tax CREDIT for lower income folks, give lots of relief already and wonder out loud if the State can afford any more.  But we at the Tax FOUNDATION of Hawaii have been grousing about the COMPLEXITY of some of the credits, and wondering how many people have been missing out on them because of FAILURE TO FILE the right claim form with the tax return.

    The terms in all capitals in this article can be found in the Word Find 15X15 matrix below.  Words and phrases can be forward, backward, up, down, or diagonal.  Good luck in the New Year!




    Transforming Hawaii’s invasive ‘rubbish fish” Into Gourmet Meals

    Chivas or “Chevy” is from the YouTube channel popularly known as “FishNGrillz.” The channel’s content centers on food sustainability in Hawaii. They demonstrate how to catch and cook less desirable fish that locals call “Rubbish Fish”, or fish that has vast abundance but hold little to no market value.

    “Invasivorism,” or eating invasive species as a means to control or eliminate their numbers, is a popular tool being utilized by restaurants and local fisherman interested in food sustainability in their communities. Turning invasive species into gourmet meals could blunt environmental and economic costs across the country.

    “We use different ingredients and cooking styles to accentuate the best qualities so the audience will have a new perspective of undesirable fish.”

    Chevy of FishNGrillz

    One example is the Roi, otherwise known as the Peacock Grouper. These invasive fish were originally introduced in the 1950’s from French Polynesia in the hopes of creating more diversity in our reefs. Unfortunately, the impact of these predatory fish wreak havoc on the Hawaiian reef ecosystem. The Roi prey on our native species consuming them by the thousands. With no natural predators, they multiply rapidly and overtake the reefs.

    To make matters worse for the Roi’s reputation, there was a spike in Ciguatera cases in the early 2000’s linked to the Roi. Ciguatera fish poisoning (or ciguatera) is an illness caused by eating fish that contain toxins produced by a marine microalgae called Gambierdiscus toxicus. People who have ciguatera may experience nausea, vomiting, and neurologic symptoms such as tingling fingers or toes. This stigma has caused consumers and fishermen to be weary of of the Roi.

    But over the last 20 years, the number of Roi related Ciguatera cases have significantly dropped. Recent studies have shown findings of Cig in other species such as the Ulua and Kole.

    “In our own experiences, we found that any fish is capable of carrying the toxin as it is more present in certain areas. For example, in Oahu the fish that are sourced from Reef Runway have been known to have higher rates of contamination,” said Chevy. “On a recent trip to Kauai, we were informed that the Northern facing shores surrounding Princeville had some of the highest concentrations of Cig. During an episode featuring some locally sourced fish from that area; kalas and koles, we were infected with the toxin. Both varieties of these fish are classified as herbivores, thus confirming that the microalgae in the area had been tainted.”

    Today, the Roi is still infamously associated with Ciguatera. But the prized Ulua or Kole pose the same threat.

    “The risk is ultimately up to the consumer,” said Chevy.

    FishNGrillz is working to alleviate the stigma behind the Roi. Their content on youtube showcase the versatility that this fish possesses.

    Chevy describes the Roi as “rich and savory with a flaky texture…delicious… and ideal to work with.”

    VIDEO – Peacock Grouper (Roi) Catch and Cook Spearfishing Hawaii- https://www.youtube.com/watch?v=ANQrpuc1P7s&t=20s

    FishNGrill is part of Hawaii Creators Collective, a network of Hawaii content creators working together to strengthen Hawaii’s community and ecosystem for the future of Hawaii.

    FishNGrills on Social Media:

    Instagram- https://www.instagram.com/fishngrillz

    Youtube- https://www.youtube.com/@FishNGrillz

    Facebook- https://www.facebook.com/FishNGrillz

    A budget surplus should make cutting taxes in 2023 an easy decision

    By Keli‘i Akina

    If I could propose one New Year’s resolution for Hawaii’s leaders, it would be this: Cut taxes in 2023.

    That should be a fairly easy resolution to keep. Throughout the election season, multiple candidates talked about the need to ease Hawaii’s tax burden, and new and established government leaders have said the same. 

    Gov. Josh Green made eliminating the general excise tax for food and medicine one of his major talking points. And on the county level, faced with concerns about skyrocketing real estate assessments, Mayor Blangiardi promised to “aggressively” pursue ways to reduce that tax burden.

    Tackling tax issues should be a win-win. That would allow our elected leaders to keep their promises, and Hawaii taxpayers would get some much-needed relief.

    There’s only one problem. The clock hasn’t even struck midnight on Jan. 1, and those tax cut promises are already being compromised.

    Keli‘i Akina


    Senate President Ron Kouchi and House Speaker Scott Saiki won’t endorse the governor’s GET exemptions; they’re saying instead that they are prepared to debate the plan. Green continues to advocate for the GET cuts but has also begun to discuss tax credits for low-income households, suggesting a willingness to back away from the exemption.

    In addition, the promise of an “aggressive” response to soaring property taxes might take a disappointing turn as well. The city’s Budget and Fiscal Services director recently brought up a one-time tax credit and increased exemptions as possible responses to address the rise in property taxes.

    It seems the promises of tax relief that Hawaii’s politicians ran on are slowly morphing into tax credits — possibly even one-time refundable credits, which is little more than a minor distribution in wealth.

    The bottom line is, a tax credit is simply not as helpful as a tax cut. Not only are credits generally temporary, they are vulnerable to being whittled away. And most important, they don’t provide the immediate relief that Hawaii’s taxpayers need — and that means they won’t have a lasting effect on the economy.

    An added concern are politicians proposing higher fees, such as the so-called “green” fee, higher fees on vehicles and a tax on vacant properties, just to name a few.

    Meanwhile, the state is raking in surplus revenue. Hawaii’s $2 billion surplus is projected to grow to $10 billion over the next few years. Does the government really need all that cash?

    Things are not pono when the government is rolling in money while Hawaii’s residents continue to struggle with high taxes and a notoriously steep cost of living. Tax relief shouldn’t be limited to one group or morphed into select credits that don’t effectively address the issues residents face. All of Hawaii’s taxpayers could use a break — and the economy could benefit from the boost.

    There are a lot of things Hawaii’s leaders could do to help lower the cost of living in our state. But if they can stick to this one New Year’s resolution, we would be moving forward on the right path. So once again: Please cut taxes in 2023. Don’t substitute a credit or employ tricky solutions that would limit the reach and scope of needed change.

    There’s no more perfect time to cut taxes for all Hawaii residents. Let’s make 2023 the year Hawaii becomes more affordable for everyone.
    _____________

    Keli‘i Akina is president and CEO of the Grassroot Institute of Hawaii.

    Counties should not profit from Hawaii’s housing crisis

    By Keli‘i Akina

    Hawaii property taxes are going up, and that’s not cool.

    The Honolulu Star-Advertiser reported Dec. 14, 2022, that the latest property value assessments of all real property on Oahu went up by 12.4% compared with the previous year. And that’s just the average. 

    On the North Shore, residential property values went up by 20.4%. East Honolulu properties increased by 10.1%. And properties classified as “Residential A” — such as vacant land, condos, and properties that don’t get the “home” or owner-occupied exemption — went up by 39.9%.

    Neighbor island residents are likely to see similar increases in assessed property values, as all islands are affected by the same economic forces. Those include inflation, which is close to spiraling out of control, and Hawaii’s housing crunch, since the state’s shameful lack of housing growth helps drive up home prices. 

    Keli‘i Akina

    Some people have mistakenly blamed wealthy mainlanders for the higher property values, but as explained in the Grassroot Institute of Hawaii’s recent report on “The ‘outsider’ theory of Hawaii’s housing crisis,” there is no statistically significant correlation between “outside buyers” and home prices.

    What is certain is that higher home values translate to higher property taxes for Hawaii’s homeowners. Combined with inflation and the weak economy, this is another blow for taxpayers already having a difficult year. For retirees and others on fixed incomes, this could push them out into the streets. 

    And it won’t affect only homeowners. Renters also will likely have to pay more as landlords pass on some or all of their additional required tax payments.

    Unless, of course, our county lawmakers lower our property tax rates or find ways to trim their spending.

    Even before this happened, I had been saying that now is the perfect time for the state to cut taxes, and the same goes for the counties. The outlook for both state and county revenues is healthy, and lawmakers at both levels could easily give their constituents a break.

    But wait a minute, some will say. Aren’t Hawaii’s property tax rates low already? Well, technically, yes. One reason is that Hawaii is the only state in the nation where public education is funded almost wholly at the state level, instead of by the counties or school districts. 

    In any case, Hawaii property values are the highest in the nation, so in terms of actual property tax payments, Hawaii homeowners still pay close to the national average.

    Meanwhile, Hawaii residents also pay some of the highest income tax rates in the nation, and our so-called state sales tax, actually a general excise tax, is widely regarded as regressive — falling heaviest on the poor. 

    In other words, Hawaii residents have every right to complain about their property taxes going up, especially since it’s an increase built into the system over which they have little or no control. 

    For county lawmakers, the higher property valuations will produce windfall tax revenues they didn’t even have to vote for. It’s a gift from Big Government heaven — but not one they should accept.

    Can we count on our county lawmakers to offset the higher property tax assessments with tax rate or spending cuts? 

    Kauai and Hawaii counties have mechanisms to protect homeowners from spikes in property values. On Kauai, owners who have a home exemption or a beneficial tax rate due to a long-term rental cannot see more than a 3% increase or decrease in market value. Hawaii County has a similar cap. 

    Several counties offer tax credits for property taxes owed over a certain amount of household income, usually 2% to 3%. And there are exemptions available in some cases, such as for the elderly, disabled veterans and other groups. Obviously, because property taxes are the sole domain of the counties, the property tax schemes, rates and exemptions can vary.

    The simplest response would be to just reduce property tax rates across the board. 

    Or county lawmakers could increase the homeowner exemptions, or increase the value of the county’s real property tax credit for state income tax purposes.

    The one thing they should not do is allow the higher assessments to translate into a massive tax hike for Hawaii residents. This might be a boon for county revenues, but it would be devastating to residents.

    We are in a strange place when it comes to state and local budgets versus our own pocketbooks. While the state and counties are raking in revenues, the average Hawaii family is struggling. Homelessness is rampant; many residents are leaving the state because they just can’t afford to live here anymore.

    Counties should not be profiting from the housing crisis and its soaring home values. In the long term, county officials should embrace policies that will increase Hawaii’s housing stock and help bring down home prices. 

    For now, they should look for ways to give taxpayers a break and keep Hawaii’s cost of living from soaring even higher.
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    Keli‘i Akina is president and CEO of Grassroot Institute of Hawaii.