Hawaii Taxpayers to Get $1 of State Budget Surplus

May 28, 2008

The Hawaii Constitution requires that the state refund taxes to taxpayers if the general fund is in surplus by at least five percent for two years. Obeying the letter of the law, the state legislature enacted a $1-per-taxpayer income tax credit, which will be paid out on the 2009 tax return.

Local tax policy activist Lowell Kalapa says its stingy:

Last year, when lawmakers were required to provide a refund credit as a result of the general fund triggering the constitutional mandate, they provided the refund credit only to taxpayers with federal adjusted gross income of less than $60,000. However, the amount of the credit was more generous, with amounts ranging from $160 to $90 for joint returns and from $65 to $25 for single returns on an inversely graduated scale.

So does the Governor, who let the bill become law without her signature:

In a statement, Governor Linda Lingle says “The token amount in this year’s bill comes at a time when families in Hawaii are facing increased costs of living. On Oahu for example, the cost of gasoline, vehicle fees, property taxes, electricity and water and sewer service rose an average of 70% since 2002.”

And a state senator:

Calling the tax rebate “demeaning,” Sen. Sam Slom said Hawaii’s elected officials still spend too much as a tough economy spreads from the mainland to the islands.

“This is not our money. This is not how we would individually budget in times of economic crisis,” said Slom, R-Diamond Head-Hawaii Kai.

The refunds will total about $1 million, out of the estimated $475 million surplus.

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