The following testimony was submitted by the Grassroot Institute of Hawaii for consideration March 31, 2022, by the House Committee on Finance.
To: House Committee on Finance
Rep. Sylvia Luke, Chair
Rep. Kyle T. Yamashita, Vice Chair
From: Grassroot Institute of Hawaii
Joe Kent, Executive Vice President
RE: SB514 SD1 — RELATING TO THE GENERAL FUND
Dear Chair and Committee Members:
The Grassroot Institute of Hawaii would like to offer its comments on SB514 SD1, which would create a one-time tax refund for resident taxpayers in keeping with Article VII, Section 6 of the Hawaii Constitution.
The state of Hawaii is currently enjoying a nearly $4 billion budget windfall, thanks to higher-than-expected tax revenues and an infusion of federal funds.
Hawaii’s residents and businesses, on the other hand, are struggling to rebound from the two years of coronavirus lockdowns, which closed many businesses forever and continue to reverberate throughout the economy.
Under the circumstances, it seems clear that returning a portion of those excess funds is both compassionate and economically wise. Hawaii’s taxpayers would benefit from the tax refund, and the economy would benefit from the spending and investment that would follow.
Earlier this year, the Grassroot Institute wrote about the budget surplus in the Hawaii Filipino Chronicle, suggesting that the Legislature return some of the windfall to taxpayers, as stipulated in the Hawaii Constitution. We also suggested that the Legislature help alleviate the state’s high cost of living by cutting taxes, which the state can clearly afford.
When Gov. David Ige proposed that the state send refunds in the amount of $100 per taxpayer and dependent, the Grassroot Institute praised the suggestion, noting that it would be a good way to help working Hawaii families while boosting the state’s economy.
The institute now commends the Legislature for considering this bill, but we would like to suggest that the Legislature go even farther in this effort to help Hawaii taxpayers.
Currently, the bill does not specify the refund amount. The governor hoped to add about $110 million to the economy via a refund of $100 per taxpayer and dependent.
However, we suggest that, given the amount of its budget surplus, the state return at least one-third of the windfall, or about $1 billion, to the taxpayers. That would equal approximately $1,361 for each of Hawaii’s 734,673 taxpayers.
As we noted, the state can afford to do far more than a mere $100 each for Hawaii taxpayers, who have gone through so much in the past two years.
Thus, we urge your committee to significantly increase the amount of the refund contemplated in this bill. By doing so, you would help foster economic growth and greater prosperity in Hawaii.
Thank you for the opportunity to submit our comments.
Executive Vice President
Grassroot Institute of Hawaii