Hawaii House leaders shelve bills that would help workers

House leaders are resisting union pressure to revive bills this year that would raise the minimum wage and exempt jobless benefits from state income taxes. House Majority Leader Della Au Belatti said the House wasn’t going to take up the measures this year, citing budgetary concerns and the need to take a deeper dive into cost-of- living issues.

Senate Bill 676, which would raise the minimum wage from its current $10.10 an hour to $12 starting July 1, 2022, and Senate Bill 614, which would exempt unemployment benefits from Hawaii’s income tax, both passed the Senate last month. But they stalled in the House of Representatives where the Labor and Tourism Committee didn’t schedule them for hearings.

In recent days labor unions have called on the House to take “extraordinary action,” bypass committee hearings and bring the bills to a full roll call vote on the floor, a process in which legislators would have to individually state their positions on the bills.

“Hawaii’s working families are suffering and they need immediate and lasting relief,” labor leaders wrote in a letter this week that was sent to all House members. The letter was signed by the Hawaii Ironworkers Stabilization Fund, Hawaii Iron Workers Local 625, Hawaii Teamsters and Allied Workers Local 996, IATSE Mixed Local 665, ILWU Local 142, Unite Here! Local 5 and United Food and Commercial Workers Local 480.

The labor leaders took issue, in particular, with House leaders’ contention that the American Rescue Plan Act, which has bailed out the state’s ailing budget, prevented them from enacting tax cuts such as those included in the bill exempting unemployment benefits from state taxes.

White House officials have clarified since the measure’s passage that the law doesn’t say states can’t cut taxes at all. Rather, states can’t use the the federal money to offset net revenue lost as a result of tax cuts. The state Legislature would likely need to raise taxes in order to offset the estimated $190 million price tag of the bill.

The unions also took issue with the raises that lawmakers have approved for themselves. Legislators are set to receive a 10% salary increase beginning July 1 and and second raise of 2.5% on Jan. 1. The raises were recommended in 2019, before the pandemic hit.

“Are you saying that workers that risked their lives during the pandemic do not deserve to be supported with a modest increase in wage while you take one yourselves? Hawaii’s workers await your response,” labor leaders wrote.

The unions noted that other states have increased their minimum wages during the pandemic.

Belatti (D, Moiliili- Makiki-Tantalus) stressed that the Senate bill raising the minimum wage wouldn’t take effect until July 1, 2022, and that the House intended to work on the bill after the session ends this month and take it back up in January. Belatti said she expects the House to support a stronger bill than what is currently being proposed.

“Some people would suggest that we don’t care,” she said in reference to the wages of low-income workers. “I think that is completely inaccurate and false.”

Belatti said the federal guidance on whether the state can implement tax cuts this year remains unclear. But even if the state can go ahead and pass the bill that exempts unemployment benefits from state taxes, she said it’s still a challenge given the tight budget. She said the state would likely have to make up the revenue in hikes to the general excise tax or other big revenue generators.

“So the choices are not easy, and the House is really taking a more methodical approach,” said Belatti.