Managing state spending during hard times is, well, hard; but the Great Recession has clear lessons about what services are just too critical to cut.
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.
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.
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.
Good health isn’t just a result of having health insurance. Public policy affects health outcomes for people across the state, and we should make forward-thinking reforms to expand access to housing, nutrition, early childhood education and more, if we hope to keep Hawaiʻi at the top of the national health rankings.
From collecting more revenue from the right places, to encouraging community-forward socioeconomic trends, there’s plenty of opportunity to improve.
Forty-four percent of the state’s tax revenue comes from the GET, a sales and use tax that imposes the second-largest burden in the nation for low-income earners.