Rep. Ward Exposes New “Job Killer” Legislation

Despite Hawaii’s struggling economy, the Majority Party in the State Legislature is considering bills that would hurt small businesses that create jobs in our State.

Today the House Finance Committee heard bills that would tell a business how much it can pay its executives, prohibit a deduction of business travel expenses, impose fees on repeat visitor accommodations, tax creative entrepreneurs who write music or movies, tax their death benefits when a key employee dies; and reverse the state’s long standing position of encouraging investment in high technology firms.

“These bills (HB798, HB806, HB805, HB809, HB976, and HB1092) violate the basic goals of the House Republican Caucus, most notably creating an economic environment to help local businesses thrive, create jobs, and attract international investments,” said Representative Gene Ward, House Republican Leader.

“At a time when our residents need jobs and businesses are just beginning to crawl out of the economic hole of the past two years, to impose punitive new taxes and fees on the job creators of our state is short sighted and wrong,” Ward noted. “Traveling to the mainland is a dire necessity for Hawaii’s small businesses. For the State to declare out-of-state travel is not a legitimate deductible business expense is deplorable. I understand the State is strapped for cash, but we should not slow down the economic engine that generates tax revenues by putting more obstacles in the way.”

The proposals would inject the state into the operations of local companies at an unprecedented level, including telling a firm the maximum amount of pay they can give an employee, despite the work they perform. Several proposals would also attempt to tax non-existent transactions, such as imposing a transient accommodation tax when someone allows a person to use their rental unit or a hotel room at no charge. Additionally, HB 805 would reverse the State’s long-standing policy of supporting high technology companies by repealing the income tax exemption for income derived from stock options issued by qualified high technology businesses.

“I am troubled that the State is attempting to interject itself into the micro-management of individual businesses and will discourage creative entrepreneurs, musicians, songwriters, film makers, and high tech engineers and scientists who enrich our culture and improve our lives,” Ward stated.

REP. WARD SPEAKS OUT AGAINST BILL THAT WOULD CREATE A GOVERNMENT BANK

A bill being considered by the Hawaii State Legislature could potentially put taxpayer funds in jeopardy and could hurt local banks in Hawaii.

HB 853 would create a State run Bank, diverting millions of tax revenues from our local banking institutions and hurting their ability to loan funds into the community.

“This State run bank would be governed by persons without a banking background including Governor Abercrombie and the State Director of Labor. I cannot see how Governor Abercrombie, who would be designated as Chairman of the Bank, and three of his political appointees could operate this bank while also managing the entire State, ” noted Rep. Gene Ward, House Republican Leader.

“It is likely this bank would not meet the basic standards of the Federal Deposit Insurance Corporation (FDIC). There are no protections in the bill should the bank fail, and it is unclear who would make decisions about which people or organizations could get loans from this bank,” Ward added. “Experience in foreign countries has shown that government owned banks could be subject to political pressures not in the best interests of the residents of the state and which could put taxpayers’ funds at risk.”

The House Finance Committee considered the bill late Thursday night and received testimony from the Hawaii Bankers Association unanimously opposing this measure. The State Acting Financial Institutions Commissioner also raised concerns about this proposal and suggested a study be undertaken before this idea is seriously considered.

Under questioning from members, the State Budget and Finance Director noted that his agency already serves as the Treasury for State funds and uses all major banks in the State who have the expertise and collateral support to protect and invest state tax dollars.

“The current system of using local banks to diversify our investments and pay interest to the State has worked for decades. We cannot afford to gamble with state funds, particularly during this period of fragile economic recovery and we need to protect every dollar the state has,” Ward pointed out.

HOUSE REPUBLICAN CAUCUS REAFFIRMS COMMITMENT TO FIGHT PENSION TAX

Following a fiery debate in yesterday’s joint budget briefing, the House Republican caucus reiterated their opposition to Governor Abercrombie’s contentious pension tax proposal.

“We, the House Republican caucus, have drawn a line in the sand on this issue. If the numbers, Governor Abercrombie has presented are correct, he balancing his budget on the backs of our kupuna, and we are committed to standing with the public to make sure this doesn’t happen,” said Rep. Gene Ward, House Republican Leader.

According to Abercrombie’s proposal, the pension tax is expected to raise $112.3 million in revenues per fiscal year. At the yesterday’s briefing, Ward asked Abercrombie how many citizens will be taxed by this measure. Abercrombie said the tax would hit 43,520 pensioners. The math says $112.3 million spread amongst 43,520 senior citizens amounts to $2,580.42 per person. Of course, the actual payment per person will be more or less depending on income.

“It is unfair to our retired kupuna who depend on a fixed monthly income. We cannot change the rules when it is too late for these folks to adjust their financial planning,” said Rep. Gil Riviere, a Republican freshman member of the House Finance Committee.

The argument was put forth that this tax will only impact those with high pension incomes. However, Rep. Barbara Marumoto, Minority Policy Leader, took issue with that claim at yesterday’s briefing with Abercrombie.

“I find that the level at which you start taxing pensions is extremely low, $37,500 for an individual,” Marumoto said. “When you start taxing pensions at such a low level, it’s almost cruel.”

While Marumoto’s comment drew animosity from the Governor who claimed she was incorrect, reports later cited confirmation from the Director of Budget and finance that the tax will affect those with an adjusted gross income above $37,500.

“The Governor says everyone has to paddle the canoe. These people have paddled, and we believe that they have earned the right to take a break. Our caucus is prepared to fight for that right and to stand up for our senior population, who have contributed their whole lives to the betterment of our state,” said Ward.

The House Republican Caucus is Minority Leader Gene Ward, Minority Floor Leader Kymberly Marcos Pine, Minority Policy Leader Barbara C. Marumoto, Assistant Minority Leader Cynthia Thielen, Assistant Floor Leader Corinne W.L. Ching and Minority Whips, Representatives George Fontaine, Aaron Ling Johanson, and Gil Riviere.

HOUSE REPUBLICAN MEMBERS SAY FOCUS ON SAFE ROADS NOW

Our government is proposing to spend over $5.5 billion to build a new rail transit system. Yet our State and City cannot even maintain our basic roads and highways.

“I believe the government has a basic duty to maintain safe and navigable streets,” stated Rep. Gene Ward. “Yet our streets are filled with potholes and poor patches that damage our cars, and make it more difficult for emergency vehicles, such as ambulances and fire trucks, to reach their destinations quickly.”
The State Department of Transportation recently announced they had only about $20 million in funds available this year to repair roads. Maintaining the same road conditions requires closer to $100 million each year and this does not even begin to tackle the backlog of highway and bridge repairs that are waiting to be done.

“Some Windward Oahu potholes are the size of huge bird baths. Motorists need to swerve to avoid them, which can cause unsafe situations,” Rep. Cynthia Thielen noted.

“What is particularly tragic is at least $145 million was raided from the State Highway fund by Democrat legislators,” Rep. Kymberly Pine pointed out. “This means we were unable to build and repair the roads we needed even though drivers had paid more than their fair share of vehicle and gasoline taxes.”

“I am concerned that Governor Abercrombie and his Dept of Transportation are now considering raising gasoline and vehicle weight taxes without assuring us the money will be dedicated to taking care of our roads,” Rep. Gene Ward, a member of the House Finance Committee explained.

The City and County of Honolulu has not been maintaining its roads, yet the Mayor wants to spend $5.5 billion on a new rail transit system. An estimated $1.55 billion would come from the Federal Government, which is already heavily in debt.

Last week the Federal Transit Administration issued a statement that the City still must prepare and issue a budget to demonstrate how they will fund the rail system.

“I am calling on the Mayor and Governor to ask their transportation departments to immediately fix our potholes on our roadways before we launch into a multi-billion dollar rail system. Our caucus will immediately initiate Operation Pothole to make fixes and encourage citizens to join the Pothole Posse,” proposed Ward.

“With the Asia-Pacific Economic Commission (APEC) coming to our State in eight months, including the heads of an estimated 20 major countries, the State and City should start today to meet the goal of filling 10,000 potholes. This will benefit our citizens and make our city presentable for this major international event,” Ward stated.

Operation Pothole is an initiative being launched by several members of the House Republican Caucus. Citizens are encouraged to become part of the Pothole Posse by calling 768-7777 the Honolulu Pothole Hotline or 536-7852 the Hawaii Pothole Patrol Hotline to report pothole locations and road repair problems in their neighborhood. These reports will be channeled directly to the City and State transportation departments. Complaints will be monitored to ensure they are addressed on a prompt basis.

The House Republican Caucus is Minority Leader Gene Ward, Minority Floor Leader Kymberly Marcos Pine, Minority Policy Leader Barbara C. Marumoto, Assistant Minority Leader Cynthia Thielen, Assistant Floor Leader Corinne W.L. Ching and Minority Whips, Representatives George Fontaine, Aaron Ling Johanson, and Gil Riviere.