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Senator proposes tax increase to fund schools
Other Democrats balk at Sakamoto's plan to raise the excise tax by 1 percentage point
POSTED: 01:30 a.m. HST, Jan 09, 2009
Sen. Norman Sakamoto wants to save the public school system from a $40 million budget cut by raising the 4 percent state excise tax by 1 percentage point.
To help balance the 25 percent tax increase (21.2 percent on Oahu), Sakamoto is also proposing dropping the excise tax on food and medical services, adding a tax credit for housing rentals and doubling the standard deduction allowed Hawaii taxpayers.
Sakamoto (D, Salt Lake-Foster Village) made his proposal Wednesday during a closed-door Democratic caucus, held to map out strategy for the upcoming legislative session.
Initial reaction by members of the 23-member Senate Democratic majority was negative.
"They weren't cheering," Sakamoto, chairman of the Senate Education Committee, said.
Senate President Colleen Hanabusa agreed that the plan did not win much support.
"It would be safe to say that everyone is very cautious. The majority of the majority (Democratic) senators are probably not inclined to entertain that kind of thing," Hanabusa said.
But Sakamoto argued that recent studies show the public school system is already underfunded by $278 million, and the proposed state budget is likely to cut the $2.4 billion school budget by $40 million.
His proposal, Sakamoto said, will help reform the state tax code, which he called "regressive."
"There have been numerous proposals suggesting ways to shift the burden to those who can afford to pay more," Sakamoto said. "Those who have more and spend more, they will spend more and pay more, so if you buy an Infinity or your Lear Jet, by all means pay more."
Republicans say they have heard the talk about tax reform before but do not believe it.
"It has been a Republican position for 40 years to eliminate the general excise tax on food and medicine," said Sen. Sam Slom (R, Diamond Head-Hawaii Kai).
Asked about Sakamoto's tax increase proposal, Slom said, "I don't think it is the right medicine for what ails us."
Sen. Norman Sakamoto wants to save the public school system from a $40 million budget cut by raising the 4 percent state excise tax by 1 percentage point.
To help balance the 25 percent tax increase (21.2 percent on Oahu), Sakamoto is also proposing dropping the excise tax on food and medical services, adding a tax credit for housing rentals and doubling the standard deduction allowed Hawaii taxpayers.
Sakamoto (D, Salt Lake-Foster Village) made his proposal Wednesday during a closed-door Democratic caucus, held to map out strategy for the upcoming legislative session.
Initial reaction by members of the 23-member Senate Democratic majority was negative.
"They weren't cheering," Sakamoto, chairman of the Senate Education Committee, said.
Senate President Colleen Hanabusa agreed that the plan did not win much support.
"It would be safe to say that everyone is very cautious. The majority of the majority (Democratic) senators are probably not inclined to entertain that kind of thing," Hanabusa said.
But Sakamoto argued that recent studies show the public school system is already underfunded by $278 million, and the proposed state budget is likely to cut the $2.4 billion school budget by $40 million.
His proposal, Sakamoto said, will help reform the state tax code, which he called "regressive."
"There have been numerous proposals suggesting ways to shift the burden to those who can afford to pay more," Sakamoto said. "Those who have more and spend more, they will spend more and pay more, so if you buy an Infinity or your Lear Jet, by all means pay more."
Republicans say they have heard the talk about tax reform before but do not believe it.
"It has been a Republican position for 40 years to eliminate the general excise tax on food and medicine," said Sen. Sam Slom (R, Diamond Head-Hawaii Kai).
Asked about Sakamoto's tax increase proposal, Slom said, "I don't think it is the right medicine for what ails us."
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