Hawaiʻi income tax cuts hang in balance as legislative session nears end

Todd (D, Hilo-Keaau-­Ainaloa) and Sen. Donovan Dela Cruz, who chairs the Senate Ways and Means Committee focused on state finances, both view Green’s plan as an unnecessarily big burden on taxpayers.

“Addressing the uncertainties we face is a shared responsibility, and the state must tighten its belt before asking the taxpayers to do so,” Dela Cruz (D, Mililani-Wahiawā-Whitmore Village) said during a March 10 speech on the Senate chamber floor.

Reductions in state spending are being pursued by lawmakers through the state budget bill and other legislation in ways that include eliminating funding for long-unfilled state jobs, taking excess balances from numerous special funds, and cutting appropriations from things where funding has previously lapsed.

This approach has drawn support from community organizations, though preferences are split between House and Senate proposals.

Younghee Overly, who testified during the April 7 hearing on SB 3125 representing Indivisible Hawaiʻi, expressed a desire for a balance between higher tax revenue and lower spending.

“I think we have to do everything,” she said. “We have to raise tax revenue. We also have to tighten the belt. I don’t think it’s one or the other.”

Devin Thomas, director of tax and budget policy at the Hawaiʻi Appleseed Center for Law and Economic Justice, said he prefers the House plan.

“We believe that that will be a much better way of raising the revenue the state needs to plug all the holes that will be caused by incoming federal spending cuts,” Thomas said at the hearing.