The figures from the Council on Revenues are in: there is enough added revenue from increased income taxes on the wealthy to pay for an expansion of the most successful anti-poverty tax credit currently available.
In this report, the Hawai‘i Budget & Policy Center takes a closer look at what happened during the “Great Recession.” Our goal is to help our government and community leaders plan now for better outcomes the next time jobs, earnings and economic security shrink.
The new budget totals $20.8 billion compared with $17.5 billion for 2019. The 19 percent budget increase represents an additional $3.3 billion, most of which will be spent on capital improvement projects.
The first of a two-part analysis of the results of the increasingly opaque state budget process this past legislative session, and what we can expect in terms of revenues, funding and expenditures for the upcoming 2020 fiscal year that begins July 1, 2019.
Our taxes support essential social programs like Medicare, Medicaid and Social Security, as well as infrastructure, education, national defense and the environment. Tax credits help alleviate the tax burden from a regressive system that takes more from poor people than rich. Several measures in the state legislature aim to address this imbalance, and generate more revenue for the state.
Shifting some of the state’s tax burden would result in a more equitable, and profitable, system.
The state of Hawai‘i is not the only governmental entity collecting and spending money for the public good. Each of the four counties has taxing authority and responsibilities that complement state budgets and services. State and county revenue sources overlap very little. Counties collect property taxes, which, according to the state constitution, may not be assessed by the state. Other county revenues include: service and use fees for water, sewer and waste disposal, licenses, and permits, including building permits.
To address mounting retirement obligations, Hawai‘i’s public employers have agreed to make actuarially determined payments over 30 years to pay down unfunded liabilities and grow the pension and health fund trusts that help fund future public contributions. These payments, which are largely supported by state and county taxes and fees, will be a sizeable burden in a small state like Hawai‘i.
Recommendations on handling Hawai‘i’s public worker retirement commitments as the Baby Boomer generation prepares to enter retirement.
Beth Giesting is director of the Hawaii Budget & Policy Center.