The Garden Island Newspaper has reported that the Kauai County Council will soon have to decide whether or not to approve a 0.5% tax increase that would help raise money for the transportation department.
Governor David Ige recently announced that he will not veto legislation that gives each of the individual counties of Hawaii the option of levying a 0.5% tax surcharge on top of the state’s 4.0% General Excise Tax (G.E.T.), in order to increase funding for public transportation and roads. On Kauai, it is estimated that the additional 0.5% tax could generate an additional $8 million in tax revenue for the county each year.
By attaching the 0.5% tax surcharge to G.E.T. – a business tax charged at every level of transaction on goods and services, which is frequently passed on to consumers – it would allow the county to collect tax from everyone, including visitors, who use the roads. Kauai County Council Vice-Chair, Ross Kagawa, voiced his support for the plan, noting that he’d rather collect the half-percent G.E.T. from everybody, including visitors, compared to a raise in taxes that would effect only locals, such as property taxes.
Although State Rep. Dee Morikawa voted in favor of the legislation because Oahu needed it in order to complete a rail project, she stated that she believes the people of Kauai are being taxed enough and that she does not support adding the surcharge on Kauai without lowering other taxes, such as reducing vehicle weight tax and registration fees.
On the other hand, Councilwoman JoAnn Yukimura is an advocate of expanding the G.E.T., but believes the funds should be applied to the expansion of the public transit system, and not just by building and expanding roads. Yukimura stated, “It’s a regressive tax… If you spend it on transit, you are going to be supporting the families that are hit hardest by this tax.”
The Kauai County Council must act by July 1, 2016, if it wants to levy the tax that would expire at the end of 2027.
For more information regarding this proposed 0.5% G.E.T. surcharge, read the original article in the Garden Island Newspaper: Council Could Take Up Tax Increase.