Mon, Jan 23, 2023 12:40 PM
By Kim Jarrett, The Center Square
Reduction in the food excise tax and increases in income tax credits for low-income Hawaii residents are part of a tax reduction plan revealed by Gov. Josh Green on Monday.
The governor also pitched a new tax break for educators that would give K-12 teachers a $500 tax credit to purchase supplies.
Green said that Hawaii's cost of living is twice the national average and the highest in the U.S.
His proposal would reduce the income tax threshold for single filers from $50,000 a year to $40,000 to receive the food excise tax break. The income threshold for married couples filing jointly would increase to $60,000 from $50,000.
"As the most claimed tax credit, this will affect at least one-third of all state taxpayers, particularly low-income single filers," Green said in his State of the State book.
The income tax credit for low-income renters will also increase, a move that Green said would benefit families considered as asset limited, income constrained and employed, which the governor referred to as the ALICE population.
"This tax credit has been underutilized because it is a small credit and with stringent income limitation," he said.
Green called his proposal the "Green Affordability Plan."
"Under this proposal, a family of four in every income bracket can anticipate nearly $2,000 in savings due to reduced taxes, and lower-income families will see even more savings," Green said.
The governor also proposed spending $1 billion to address affordable housing. According to the Department of Business, Economic Development, and Tourism, the state needs an additional 50,126 homes by 2025.
"These funds will be used to support major investments in the Hawaii Public Housing Authority to renovate and upgrade public housing units, to provide state rental subsidies to low-income families, and to boost financing for more affordable housing units through the Hawaii Housing Finance and Development Corporation," Green said.
Green signed an emergency proclamation he said would remove the red tape involved in construction.
"As long as we are in a housing crisis, we will treat it like an emergency," Green said.
The governor also mentioned the construction of a new Aloha Stadium. State officials have eyed a private-public partnership, which Green said would only work if the state gets a fair deal.
"We are carefully reviewing our options, and we will go forward on the best deal available," Green said. "But we can't afford to wait. The longer the delay, the higher the cost."
The state will be reaching across the Pacific Ocean to Japan to spur economic development, the governor said.
"We have been working with partners to convene Japanese and local businesses in key sectors for Hawaii's economy, like the international wedding industry, which brings in over 20% of all visitors from Japan," Green said. "Welcoming more visitors like our Japanese neighbors means we can generate more revenue for local businesses while taking in fewer tourists overall."
The state's export business also needs to improve, Green said.
"Despite being the 41st largest state by population, we rank last of all US states in overall economic exports — a statistic that needs to change," Green said. "Our economy is rife with untapped potential. We will encourage our small business and professional services sectors to seek new markets beyond our islands."