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Wednesday, August 27, 2014         

ON POLITICS


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Pension tax idea galvanized potent voting bloc

By Richard Borreca

POSTED:



As the first session of the 26th Hawaii Legislature clunked to a close Thursday afternoon, Sen. Glenn Wakai (D, Salt Lake-Foster Village) tweeted: "We dodged a bunch of bullets — NO increase in the general excise tax, pension tax, soda tax or alcohol tax."

True enough, but it may not be time to pack away the bulletproof vests: The pension tax could come back.

Equally important, the pension tax appears to have inspired a potent political force to block it: seniors who vote.

As the national GOP learned after it was forced to pull back its ill-fated congressional plan to privatize Medicare, Hawaii politicians are learning that organized senior voters are too important a group to ignore.

Gov. Neil Abercrombie started the session in January with a State of the State speech that called for raising more than $110 million by taxing pension income.

The federal government taxes pensions, the state tax review commission says pensions should be taxed, most states already tax pensions, we should too, Abercrombie argued.

The ever-growing state deficit added urgency to the Abercrombie pension tax scheme, and it grew into the most volatile issue of the session.

Barbara Kim Stanton, state AARP director, reported that her Hawaii chapter, 150,000 members strong, was both outraged and suddenly motivated.

"This issue resonated with a lot of members. Many told us that they have never called, they have never written and they have never contacted representatives, but this time they did," Kim Stanton said.

Seniors, Kim Stanton said, felt they had been ignored, because after the shock of the Abercrombie proposal, there was little follow-up by Abercrombie or other tax supporters.

Tax opponents wanted to battle back, but didn't know what to do. Enter AARP.

"They have been trying to be active on a grassroots level, so the groundwork had already been laid," veteran Manoa Democrat, Sen. Brian Taniguchi, noted of AARP's advocacy.

"The pension tax galvanized the base and currently they have the momentum," Taniguchi added.

The question still before the lawmakers is how much they want to antagonize the 150,000 voting AARP members in order to balance the budget.

It is likely to remain a hot topic, Taniguchi predicted, especially if the state House and Abercrombie insist on making a state tax on pensions a large part of their financial plan.

Asked about the tax after the Legislature adjourned for the year, House Speaker Calvin Say recognized the power of AARP.

"They will probably become one of the greatest forces by the end of this decade," said Say (D, Palolo-St. Louis Heights).

"Why? Because we are all qualifying for AARP and their members go out and vote," Say noted.

But what will become of the pension tax plan next year?

Say flatly said it will not move unless there is a united effort.

"Not without the support of the Senate. I just don't want to go down that road again," Say said.

He added that it was embarrassing this year to be pushing a bill sponsored by the governor and having it first whittled down from $110 million to just $7 million and still being rebuffed.

Nothing passes into law without both the House, the Senate and the governor in agreement, but AARP showed this year that blocking also counts.

———

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






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