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Legislators get mixed messages about spending cuts and raising taxes

By Richard Borreca

POSTED:
LAST UPDATED: 09:12 a.m. HST, Feb 20, 2011



Maui Democrat Rep. Joe Souki chuckles as he reads the new OmniTrak Group Inc. poll.

The statewide survey shows that we would like more good stuff from the state but don't want to pay more for it.

Specifically, 78 percent said they were against raising the state income tax and 68 percent didn't want the general excise tax raised either. Half didn't want government jobs cut, more than half said no to freezing wages, pensions or health benefits.

"What this shows is they are confused and we need leadership," says the 77-year-old former House speaker and Finance Committee chairman.

Souki thinks Gov. Neil Abercrombie is one of those who could bear down a bit harder on the leadership thing. The new governor has offered up his own financial plans to deal with the state deficit, including phasing out the state income tax deduction (meaning your state taxes are likely to go up) taking away public worker benefits and cutting assistance to the poor on Medicaid.

Souki notes that some of Abercrombie's budget-cutting ideas are not likely to be constitutional, because the state Constitution says the Medicare Part B payments given to retired state employees are "an accrued benefit" and courts have ruled that the state cannot take away such benefits. Even David Louie, the new attorney general, says if the unions sued over the proposal it is uncertain if the state could win.

Meanwhile, Abercrombie is apparently opening the door to approving a general excise tax increase, even though he campaigned on the promise that "The GET will not be raised ... Government will have to make better use of the revenues that it has and grow the economy if more revenues are needed."

This paper asked Abercrombie to clarify his position on the GET last week and the governor's spokeswoman said that Abercrombie opposed raising the GET, but added an escape clause:

"If a measure to raise the GET passes out of the Legislature because other elements of his plan are not adopted, he will, of course, consider it as the people's will," spokeswoman Donalyn Dela Cruz said.

This is where former Gov. Linda Lingle would have said something about having just refilled her veto pen and would be using it on the GET increase.

With Abercrombie, there appears to more focus on getting more money to state government, no matter how it is accomplished.

If raising income taxes is Plan A and raising the GET is an unpopular Plan B, here is Plan C, which is quietly under discussion among House leaders:

If it appears that as the Legislature winds down in late April and there is no resolution to the state deficit, Democratic leaders are mulling over a one-month recess for an intense tax study session. House Speaker Calvin Say wants to use the extra time to raise money by dropping state tax exemptions.

Last year Say proposed taxing charities and nonprofits, including labor unions and credit unions. At the time Say estimated that the state could pick up $500 million in new tax money.

And that is why there is talk of a recess and returning to work just before the end of the fiscal year in June. It's enough to make Souki grin.

Richard Borreca writes on politics on Sundays, Tuesdays and Fridays. Reach him at rborreca@staradvertiser.com.

 






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