Local legislators say county came out OK

The Maui News
Thursday, May 05, 2005

By MATTHEW BURGER, The Maui News

HONOLULU –Maui County's legislative delegation was sharply divided on the decision to increase the state excise tax and disappointed in the failure to provide some tax relief in the 2005 session that officially closes today.

But members of the delegation on Wednesday were mostly upbeat on what they had accomplished, and they noted that the state budget provides for considerable capital improvements projects in the county.

"Overall for Maui, we did very well," said Rep. Joe Souki, D-Waihee-Wailuku, saying there was more than $100 million in CIP funds allocated for the county. "Hopefully, the public will see this as a balanced session."

Souki credited fellow Maui Rep. Bob Nakasone, D-Kahului-Paia, with helping secure – among other projects – $12 million for the next phase of the Haleakala Highway widening, $1.5 million to finish the Nisei Veterans Center, $10 million for a Baldwin High School library and more than $36 million for Kahului Airport improvements.

"He's done a good job for all of us," Souki said.

Sen. Shan Tsutsui, D-Wailuku-Kahului, said the state lawmakers "did a pretty good job of balancing priorities," with special attention to funds for education and to fight the ice epidemic.

But, he said, referring to criticism that not enough was done to provide tax breaks, "more money would have been better."

Tsutsui said Republicans blaming public employee pay raises for limiting the budget's fiscal flexibility were not realistic.

"Revenue is up, but expenses are going up a lot faster," Tsutsui said. He pointed to the many federal mandates – including the No Child Left Behind education law, Homeland Security requirements and Medicare – that are increasing costs without providing support funding in every state.

"It's not just happening in Hawaii.

"But overall, it's a sound budget . . . In terms of Maui, we did fairly well," he said, also crediting Nakasone for helping secure funds for roads and more than $22 million for upgrading health-care facilities, including Maui Memorial Medical Center.

Tax relief, such as the failed increase in the standard deduction for state income taxes, "is something we'll continue to look at next year," Tsutsui said.

The Legislature's decision to raise taxes, allowing the counties to tack on a 0.5 percent surcharge to the general excise tax, divided Maui lawmakers.

Tsutsui was the only Democrat in the Senate to vote against the hike, which mandates that the additional revenue goes specifically for transit-related projects.

In the House, Rep. D. Mele Carroll, D-East Maui-Molokai-Lanai, Rep. Kam Tanaka, D-West Maui-South Maui, and Rep. Chris Halford, R-South Maui, voted against the measure.

"I don't think people fully understand the impact," said Tsutsui.

Tanaka was more direct.

"We're taxed too much already," he said. He said the tax surcharge will hit the poor people especially hard. "A family of four will end up paying $450 more a year (for goods and services) because of the tax hike.

"I'm disappointed. I thought we should've concentrated more on tax breaks."

Sen. J. Kalani English, D-East Maui-Molokai-Lanai, said he supports the idea that the counties should choose for themselves whether they want to implement the hike, calling it "a home-rule issue."

He voted for the tax increase "with reservations." Because it allowed the county to make the final decision on implementation, he said, "I was able to go with it."

Carroll, who voted against the measure, said many of her constituents opposed the increase.

"In my district – Molokai and Hana – people are barely making it," she said.

Tsutsui added that he preferred alternatives to increasing the excise tax, which has a "pyramiding effect" because it means "goods and services passing through Oahu will have a higher price when they get to Maui."

"In essence, it means we'll be paying for a rail system on Oahu," he said.

One alternative was an ad valorem tax on new cars, which Souki helped introduce, that would have been based on the value of a motor vehicle. Tsutsui said the Department of Taxation estimated such a tax could have brought in $82 million statewide, and would have been more equitable, with owners of more expensive cars paying more.

But, he said, that proposal "unfortunately died."

"There's always disappointment," he added. "What you can't get one year, you come back again."

Halford, the lone Republican in the Maui delegation, also liked the ad valorem tax or having the City and County of Honolulu raise Oahu's gas taxes to pay for a Honolulu transit system. He said the general excise tax is "the worst tax available."

"It's a regressive tax," he said, meaning lower-income people end up paying the largest percentage of their income in taxes.

Souki said he would have liked to offer tax relief, but if there's not enough revenue, it can't be done. "We've got to balance the budget."

Both Tanaka and Carroll were proud of the Legacy Land Act, which will provide funds for land conservation by raising the state's conveyance tax on properties selling for more than $600,000.

"I feel strongly about conserving historical and cultural sites," Carroll said.

She's also pleased with a Senate bill directing the state Department of Transportation to take into account new guidelines in highway design, which will allow flexibility for preserving historic bridges along Hana Highway.

"It brings the state in line with federal law," she said.

Carroll was disappointed, however, with cuts to funding for the Molokai irrigation system.

She said there was "$2.5 million the House put in . . taken out in the Senate." Even though she worked in conference committee to get $750,000 restored, she hopes to work later to get the full funding restored and will visit Molokai to research the issue further.

Even though no funds were appropriated for Tanaka's proposal for lifeguards at Makena State Park, it could get funding next year, he said.

"The budget's balanced, and I'm happy about that," Tanaka said.

Next year, Tanaka intends "to work hard on bills to support the keiki, kupuna, shorelines and open space."

English cited a bill to regulate cruise ship pollution as a major accomplishment that "will bring them under the rule of law."

He praised Norwegian Cruise Lines for working with lawmakers on the measure, and for employing some of the latest technology to treat onboard sewage, and "being very transparent."

But because projections are showing a huge growth in the cruise ship industry, the bill is to ensure that future cruise lines, that may not be as up-to-date as NCL, are accountable, he said.

Another measure English saw through was a bill to ensure the civil rights of Kalaupapa residents.

"It means we did something out of the box," he said. "I am really proud of it because it means they are not being forgotten."

English added that former Rep. Sol Kaho'ohalahala, the Democrat who previously held the 13th House District seat, played a pivotal role, since he originally got the bill under way while he was still in office.

Halford said a measure to identify agricultural lands is significant, "because it's been in the constitution for 27 years," he said. Now, finally, "there's a compromise bill out there that will identify important agricultural lands in the state," Halford said.

But, the session was not without disappointment for the Republican, who was the only House member to vote against the budget on Tuesday.

"Our budget is obscure," he said.

"Audits (on spending) are mandated but have never been implemented," he said, adding that he will continue to vote no until that's done.

"No one really knows how we spend our money."

He also was disappointed at Democratic lawmakers' efforts to "systematically handcuff the governor." As an example, he cited the creation of a council to screen and propose candidates for the University of Hawaii Board of Regents.

But English said the measure was "about accountability," because the university is semiautonomous and makes many crucial spending decisions on its own.

"We need a vetting process before they come to us for confirmation," he said.

Another key project funded was $300,000 for coqui eradication efforts. "Considering how few bills got funded," English said, it showed lawmakers felt "there was a need." He added that the funding will go a long way in combination with other efforts to eliminate the pest species.

A bill to fund $40 million worth of improvements to state harbors for the proposed Hawaii Superferry also made it through, but Tsutsui noted that the project still will have to deal with a lawsuit pending on Maui regarding whether the project needs an environmental assessment.

The issue will be revisited next year, he said, which is one reason the harbor improvement funds were broken up into two segments.

"I like the Superferry in concept," he said.

But, he said, "I want to see a business plan. Is this thing going to work, or is it something the state will keep dumping money into year after year?"

Matt Burger can be reached at mburger@mauinews.com.

Copyright © 2005 The Maui News

Original article URL: http://www.mauinews.com/print_version.aspx?id=7979

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