Photo by Charley Myers
The following commentary was originally published March 2, 2023, by Honolulu Civil Beat.
Gov. Josh Green promised during the campaign to stop taxing food. It was a major part of his platform.
But then he didn’t mention the plan at all during his first State of the State address. Instead, he proposed a new tax credit to refund some of the cost of groceries when tax time rolls around.
Why the change?
Legislative leaders made it clear that the governor’s plan to stop taxing food was dead in the water. And the governor, it seems, is willing to accept a compromise solution rather than make no progress at all –– an understandable and probably wise approach.
If we fairly characterize the argument against eliminating the general excise tax on food, it goes like this: It doesn’t make sense to eliminate the GET on food because tourists also pay the GET when they eat at restaurants, and a tax break should be for residents. A tax credit, on the other hand, would only be available to those who live in Hawaii.
That argument makes some sense.
But there is a third way that would take into account the concerns of legislative leaders while sticking closer to the governor’s promise to eliminate the tax on food: eliminate the GET on groceries, but not on meals prepared and served by restaurants.
Getting rid of the GET on groceries would immediately lower the cost of food for Hawaii residents. Instead of having to wait to apply for and possibly receive only a small refund at tax time — which could be worth even less because of inflation — they would see immediate relief at the cash register.
From a national perspective, Hawaii is one of only 13 states that taxes groceries. Hawaii residents already spend a higher percentage of their income on food than families living on the mainland — 16.5% versus 12.5%, respectively.
By removing the GET, Hawaii shoppers would save at least $4.50 for every $100 they spend on groceries. That’s not a huge amount of savings, but every bit helps, and it adds up quick.
Hawaii’s 60-day legislative session is already more than a third of the way over, and we are rapidly approaching a key deadline next Friday, March 9: crossover.
Crossover is when bills move from one legislative chamber to the other (House to Senate and vice versa), and any bills that don’t advance are out for the season. So it is important to let our representatives know now that we support efforts to remove the GET on groceries.
Our lawmakers should also know that because the state has a significant budget surplus, they wouldn’t have to cut any spending to make up for any revenues that might be lost due to the groceries exemption.
Green won both the gubernatorial primary and the general election in a landslide, in part because of his pledge to get rid of this regressive tax on food. Lawmakers would be wise to follow the will of the voters who sent a clear message that they want elected officials to lower the cost of living.
Help the governor keep his promise. Get rid of the GET on groceries.