Category Archives: Taxes

Beverage Container Tax Set to Increase

Hawaii Beverage Consumers Will Soon Be Paying More

Originally published in HawaiiReporter.com July 18, 2012.

No New Taxes!

It’s a hot summer here in the islands, but those seeking relief from a cool beverage will soon be paying more.

The state Department of Health, the agency that manages the fund, plans to increase the controversial 6 cent beverage container tax by a half cent starting September 1.

The tax is charged to manufacturers, distributors and importers of beverages in Hawaii, and that tax is then passed on to consumers.

The Department of Health does not need additional approval from the legislature, because the increase was already written as an option into the law. The way the law was structured, the more the public cooperates and recycles, the more the chance of the tax being increased.

“State law requires the container fee to increase from one cent to 1 1/2 cents per container if the redemption rate exceeds 70 percent, unless the director of health, in consultation with the state auditor, determines that a fee increase is not needed. The statewide redemption rate from July 1, 2011, to June 30, 2012, remained strong at 77 percent; the rate for the previous year was 76 percent,” the health department said in a press release.

Health Director Loretta Fuddy said: “The half-cent fee increase was written into the bottle law from its inception to ensure the recycling program could sustain itself and continue to pay back deposits to consumers. We were able to hold off a fee increase for four years by using existing funds; however, the special fund is now too low to continue the program through 2014, and the current fee is not enough to build critical program reserves necessary to conduct essential operations.”

But the increase does not come without controversy – or questions from the law’s critics.

The fund has been raided multiple times by the Hawaii state Legislature for a total of $9.7 million between Fiscal Years 2009 and 2011 to balance the state operating budget.

“An additional $9.6 million decrease in the program’s funds during FY2009-11 was primarily due to legislative impacts that removed the exemption from the Central Services Fees ($2.7M per year), two raids (Act 124 (11) and Act 192(10)) ($1.3M total) and the transfer of interest earned ($1.2M per year),” said Janice Okubo, spokesperson for the Department of Health.

Even without the raids, Okubo said, “the container fee would eventually need to be increased a half cent to sustain the program because of the high redemption rates each year.”

The department has continued to expand its bureaucracy, leaving the department spending $3.4 million more than its annual revenue for this program.

Sen. Sam Slom, (R-Hawaii Kai to Diamond Head), said: “I have been opposed to and voted against every piece of this legislation that amounts to a power grab for the state Department of Health. I have warned that the tax will continue to increase without any legislative oversight. This is a perfect example of government out of control by punishing people for what it said had to be done for recycling. In other words, the more people recycle and are responsible, the more they will be penalized. The fact that the legislature also uses the beverage container special fund as a cash cow amply demonstrates that this scheme is more about money and taxation and less about the environment. Finally if re-elected I will again introduce legislation to abolish this program and make all recycling a county function as is done in the Mainland.”

The Health Department determined this year “the current fee structure and special fund balance would leave the HI-5 program underfunded in 2014 and unable to continue operations.”

The Health Department estimates the increase will bring in $4.5 million annually.

“As a result of the fee increase imposed on beverage distributors, consumers will likely see the additional half-cent fee added to their retail purchases of HI-5 labeled containers beginning September 1. This means that the deposit plus container fee will increase to 6 1/2 cents – a 5 cent deposit to be returned to the consumer when the container is recycled and a non-refundable 1 1/2 cent container fee to cover administrative costs,” the health department said.

Since its inception, the HI-5 program has recycled more than 4.71 billion containers. In the last fiscal year, more than 690 million containers were recycled, helping to significantly reduce litter and conserve resources.

Original Story Link:

http://www.hawaiireporter.com/?p=52297

Where Senator Slom Stands on the Issues: An Update

Updated July 5, 2012

Honolulu TEA Party 2012

The following is Senator Slom’s views on a number of hot topic issues:

Issue Position
$9.03 Billion + Fixed Heavy Steel Elevated Rail (Train) NO
2nd Amendment: “Castle Doctrine” YES
2nd Amendment: Concealed Carry / Open Carry YES
Agricultural Lands – Protect YES
Akaka Bill NO
Alternative Energy (Solar/Wind/Geothermal) – Voluntary Incentives YES
Deregulate HECO Electric Monopoly YES
Ban Totally: Plastic Bags NO
Beverage Container Recycling Tax NO
Budget – Adding New Special Funds NO
Compulsory Fluoridation Of Public Water NO
Decreasing General Excise Tax YES
Decreasing Personal Income Tax YES
Definition of Marriage – Man & Woman only YES
Education – Decentralized School Boards YES
Education – Merit Pay For Teachers YES
Eliminating Estate “Death Tax” YES
Eliminating GET On Food & All Medical YES
Gas Cap NO
Hurricane Relief Fund – Return $ To Premiums Payers YES
Initiative / Referendum / Recall YES
Ka Iwi Resort Development in Hawaii Kai NO
Lanai / Molokai Big Wind Turbines for Electricity to Oahu NO
Undersea Electric Cable ($2-$3 Billion) NO
Legalize Gambling NO
Medical Marijuana For Severely Ill YES
More Compensation/Benefits For Police Officers YES
Partial Birth Abortions NO
Physician Assisted Suicide NO
Raising Taxes NO
Reduce Unemployment Tax YES
Rights Of The Unborn YES
Solar Water Heaters Compulsory NO
Barrel Tax on Petroleum NO
Tax on Pensions NO
Term Limits for Legislators YES
Traffic Van Cameras / Red Light Cameras NO
Truth in Accounting Legislation YES
Unicameral Legislature YES
Union Card Check NO
Workers Comp – Increased Cost to Business NO
UH Tuition Subsidy for Illegal Immigrants NO
State Bank (Taxpayer Funded) NO
Exempt State/County Development Projects from Environmental Process NO
Hawaii Health Connector Exchange (Obamacare) Conflicts NO
Sugary Beverage (Soda) Tax/Ban NO

Sugar Sweetened Soft Drink Tax Tabled For Now

Senator Slom spoke in opposition to the tax on “sugar sweetened beverages” in the Senate Health Committee hearing held on February 15. The proposed bill (SB 3019) would levy at least a 10% tax on soda and other sweetened beverages.

Hawaii consumers are taxed twice on most purchases of soda and other sweetened beverages. Every purchase in Hawaii is impacted by the State’s General Excise Tax. Beverages that are purchased in containers are also subjected to the Bottle Recycling Tax. The sugar tax will be an additional burden on Hawaii’s consumers.

SB 3019 was deferred in the Senate Health Committee. Committee Chair, Senator Josh Green will have the issue studied and discussed further. Another bill will likely be introduced next session (a non-election year) to implement this tax.

Senator Slom’s comments on the tax appear in the video clip below:

Governor Lets 235 Bills Become Law

As published in the July 21, 2011 edition of Senator Slom’s Neighborhood Board #3 report.

Hawaii State Capitol

Governor Neil Abercrombie let 235 bills become law on July 12, the last day that all bills passed during the 2011 session had to be decided on. The Governor ended up vetoing 17 other bills, which proved to be fairly innocuous, prompting the majority party to not call for a special session to override vetoes. Some of the bills enacted into law include the following:

Act 164 (HB 200): The $22 billion unbalanced state budget was signed into law as Act 164. I opposed the budget bill because it did not make the kind of deep cuts required to keep the state running without increasing the financial burden on the taxpayers. The Senate Minority offered an alternative budget during the 2011 session.

Act 163 (HB 1038): A major adjustment to the State Employees Retirement System (ERS) will increase the amount employees have to pay into the system and increases the years an employee is “vested” for retirement benefits. The retirement age also increases. The bill is supposed to address critical funding issues regarding the ERS.

Act 162 (SB 1328): Increase to the vehicle registration tax. I voted against this and all other tax and fee increase bills.

Act 165 (SB 1088): Extends unemployment insurance benefits and increases cost for business. Opposed this on final vote.

Act 168 (HB 1000): Expands the coverage of the 911 tax to cover all “communications services connections” except landline 911 services.

Act 175 (SB 892): Amends certain laws pertaining to service dogs to bring in compliance with the ADA and Fair Housing act.

Act 143 (HB 716): Establishes new election deadlines to comply with state primary election date required by federal law. This is a bill I supported which will move Hawaii’s primary election date to August.

Act 142 (HB 1613): On the other hand I opposed the permanent absentee ballot clause found in this bill regarding voter registration.

Act 141 (HB 1333): I supported the bill to increase the maximum monetary claim that may be filed in small claims court.

Act 152 (HB 1020): revises the boundaries of the Aloha Tower complex and places the Aloha Tower Development Corporation under the Department of Transportation. I supported this bill.

Act 105 (SB 754): “Temporary” suspension on GE tax exemptions for certain persons and entities. This is a complicated bill that has far reaching impacts for many businesses. An analysis of the bill’s impact is attached to this report. I voted “no” on when bill was significantly changed in the House and Conference Committee from its original version, that I and other senators initially supported. In the end on the final vote, the bill passed out of the Senate by a 17 to 8 margin. Read the attached commentary about Act 105 and its serious implications.

A complete list of all bills that became law and all bills that were vetoed by the Governor is attached to this report. A more comprehensive list of bills to Acts and vetoed bills is available on the Legislature’s website at:

http://www.capitol.hawaii.gov

Direct link – List of Acts:
http://www.capitol.hawaii.gov/session2011/lists/RptActs.aspx

Direct link – Vetoed Bills:
http://www.capitol.hawaii.gov/session2011/lists/RptVeto.aspx

Nearly 200 Bills Become Law as Decision Deadline Nears

As published to Senator Slom’s Neighborhood Board Report to Kuliouou.

Governor Neil Abercrombie signed nearly 200 bills into law since our last report on this topic. Many of the bills that became law are those that I have opposed when they made their way through the legislature. Among the bills newly signed into law are the following:

Act 164 (HB 200): The $22 billion unbalanced state budget was signed into law as Act 164. I opposed the budget bill because it did not make the kind of deep cuts required to keep the state running without increasing the financial burden on the taxpayers. The Senate Minority offered an alternative budget during the 2011 session.

Act 163 (HB 1038): A major adjustment to the State Employees Retirement System (ERS) will increase the amount employees have to pay into the system and increases the years an employee is “vested” for retirement benefits. The retirement age also increases. The bill is supposed to address critical funding issues regarding the ERS.

Act 162 (SB 1328): Increase to the vehicle registration tax. I voted against this and all other tax and fee increase bills.

Act 165 (SB 1088): Extends unemployment insurance benefits and increases cost for business. Opposed this on final vote.

Continue reading

State Revenue Projection Remains the Same

Save That Loose Change

No special session is scheduled to be held after the Hawaii State Council on Revenues chose not to revise their most recent economic forecast for 1.6% growth this year. Had the council downgraded their forecast it was highly possible that the State Legislature would have had to meet in special session to address the revenue shortfall by increasing taxes.

Senator Slom stated in a HawaiiReporter.com article: “I continue to believe our budget is not balanced and we have not emerged from the recession. There may be recovery for selected industries such as the visitor industry, but for the majority of businesses and families, it is still a difficult time. And the key indicator, private jobs, does not show up in the data. As the council itself said, the models are based on mathematics and subject to interpretation. My interpretation is that as long as the state continues its tax and spending policies, it will have a continuing adverse impact on recovery and any meaningful expansion. It also is interesting to note that the chairman even hinted that Hawaii may go into another recession in 2014.”

Senator Slom addressed the state budget shortfall earlier this year with a “No Alternative” budget that featured several deep cuts and no tax increases.

For Additional Reading:

Council on Revenues Won’t Change Economic Forecast, HawaiiReporter.com 5-27-11
Cash Outlook Standing Pat, Honolulu Star-Advertiser, 5-27-11
Senate Minority No Alternative Budget

Senate Minority Report – May 4, 2011

The last press conference of the 2011 session, Senator Slom reviews legislation that passed and those that are bad. Most of the press conference was spent answering questions – just as it should be. Recorded May 4 at Senator Slom’s office in the State Capitol. Archive of videos from Senator Slom can be found on YouTube.com.

http://www.youtube.com/user/SamSlom

Senate Minority Report: “No Alternative” Budget

The Senate Minority Caucus under the leadership of State Senator Sam Slom offers the “No Alternative” budget for the State of Hawaii. Press conference recorded on April 8, 2011 at State Capitol Room 214.

GE Tax Hike Struck From HB 793

State Senate WAM Committee

The Senate Ways & Means Committee struck out the section pertaining to the 25% General Excise Tax hike yesterday (April 7). The motion to amend HB 793 and take out the tax increase passed in a rare motion where members of the committee voted against the recommendation of the the committee chairman. The bill still retains other components that make it less than perfect, which Senator Slom voted against.

The bill description for the SD 1 now reads “Suspends from 1/1/2012, to 6/30/2015, the exemptions for certain persons and certain amounts of gross income or proceeds from the general excise and use tax and requires the payment of the tax at a rate of 4%. Appropriates funds to expedite implementation. ” You can get the full text of the bill from this link.

Testimony against the GE tax increase was plentiful. Some examples of testimony submitted against the tax increase included:

“The legislative branch should be working toward reducing spending through elimination of redundant services or de-funding programs which are nice to have but not necessary to operate an effective government… I dare you to take a stand against over expenditure and eliminate unnecessary programs or excessive government agencies. I am not asking you to do the impossible but I am expecting you to do the difficult. Do your job.”

- Marc Grandmaison

“You have a SPENDING problem, not an INCOME problem.”

-David Verret

“Why raising taxes is always the first thing the legislature thinks of as the solution is not fiscally responsible. You are very very close to the tipping point on what individuals and small business can handle… CUT THE SPENDING.”

- Adrienne King

“In tough economic times, everyone tightens up and eliminates unneeded or wasteful expenses. That is, everyone EXCEPT the government. Instead the government continues to spend and increase spending, all on the backs of the hard-working, taxpaying Hawaii residents. This trend needs to stop immediately.”

- Lisa A. M. Miller

Additional Links on the Defeat of the GE Tax

Rebellion in the Senate Kills GE Tax Hike Proposal, HawaiiReporter.com
Senators Kill Excise Tax Increase, KITV 4 News
G.E.T. hike shelved by senate committee, KHON Channel 2 News

The GE tax increase could resurface again during the conference committee process despite legislators saying that the proposal is off the table for now.

Photo: Senate Ways & Means Committee hearing on April 7.

State Senate Proposes GE Tax Increase

No New Taxes

The Senate Ways & Means Committee will hear a bill that will increase the State’s General Excise Tax (GET) by at least 25% (1% as they say). HB 793 will be heard this coming Wednesday, April 6 in the State Capitol Auditorium starting at 9:30 a.m. Senator Slom will be voting against this (and every) tax increase bill.

Taxpayers are encouraged to send in testimony or more importantly call members of the Ways & Means committee and let them know that you are against the increase of the GET. All legislators should be contacted on this most important pocketbook issue.

Information and contact links are listed below:

HB 793 SD1(Proposed Senate Draft)
http://www.capitol.hawaii.gov/session2011/Bills/HB793_SD1_PROPOSED_.pdf

WAM Hearing Notice for HB 793 SD1 – Wed. April 6, 2011 9300 am State Capitol Auditorium

Bill Status HB 793

Senate Ways & Means Committee Members / Contact List 

Contact for All State Legislators (House & Senate Phone Directory)

Email Testimony Form

Star Advertiser Article 4-4-2011