HONOLULU—Taxes on oil, some estates and cigarettes would go up in Hawaii under bills approved by the House and Senate on Wednesday.
Even if Gov. Linda Lingle vetoes these tax hikes, the Legislature left itself enough time to override her before session adjourns at the end of the month.
The oil tax increase would cost residents an estimated $15 to $20 a year, including an additional 2 or 3 cents per gallon of gasoline and higher power bills. The $22 million raised would primarily go toward the state's general fund, with some money set aside for renewable energy programs.
The cigarette tax charges smokers 1 cent more per cigarette starting in July. Combined with a separate 1 cent cigarette tax previously approved, a pack would cost 40 cents more. The measure would generate about $10 million a year.
"Ultimately, especially here in Hawaii, it ends up being the little guy who pays," said Sen. Fred Hemmings, R-Lanikai-Waimanalo.
The estate tax, called the "death tax" by its opponents, would be levied on nonresident foreigners with assets in Hawaii, bringing in about $10 million to the state government.
These kind of targeted tax increases would help balance the state's budget without having to raise broad-based general excise taxes applied to most transactions, said Sen. Donna Mercado Kim, chairwoman of the Ways and Means Committee.
"It's not going to happen," said Kim, D-Kalihi Valley-Halawa, speaking about fears that general excise taxes would be increased.
Hawaii is facing a projected $1.3 billion budget shortfall through June of next year.
Other proposed tax measures did not get votes as scheduled.
Those bills would have raised some $115 million by delaying high-tech tax credits to investors and $25 million by repealing exemptions enjoyed by some businesses that currently don't pay general excise taxes. Thy will either get votes next week, be fine-tuned in committee or fail to become law.
"No one wants to raise taxes, but at the same time, we need to provide for the schools, clinics, domestic violence shelters, most needy, health care services, agriculture inspectors," said House Finance Committee Chairman Marcus Oshiro, D-Wahiawa-Poamoho.
The Legislature also gave final approval to a bill stalling the planned closure of 31 welfare offices and 228 public employees statewide.
The Department of Human Services wanted to shutter the welfare offices to save $8 million and streamline benefit processing into two new call centers in Honolulu and Hilo. But lawmakers opposed to the idea worried that the needy would lose in-person access to services.
The measure prohibits welfare office closures on the neighbor islands and requires public hearings before they could be consolidated on Oahu.
State law allows the Republican governor 10 days to act on bills passed at least 10 days before the legislative session ends. Because the session doesn't end until April 29, the Democrat-run Legislature could attempt to override her vetoes later this month.
