Fri, Apr 8, 2022 9:00 AM
By By Merrilee Gasser The Center Square contributor, The Center Square
(The Center Square) – Some Hawaii taxpayers could see tax rebate checks up to $300 this year under a bill that recently passed the Hawaii House Committee on Finance.
Senate Bill 514 would pay one-time tax rebate checks of $300 to people making $100,000 a year or less and $100 to those making more than $100,000 a year, Rep. Sylvia Luke, D-Honolulu, said.
Total cost for the tax rebate program to the state is estimated to be around $250 million, Sen. Donovan Dela Cruz, D-Wahiawa, said.
The two lawmakers spoke about the plan to give residents rebate checks during an interview with the Honolulu Star-Advertiser.
“What was really significant about two years ago is that the federal government provided individual tax relief for individuals making basically, you know, $100,000 or less,” Luke said. “I think part of the economic activity that we’re seeing is the investments that the federal government made to ensure that money, some of the money, was returned to the taxpayers. We take that seriously.”
Luke said she and Cruz are “committed” to entertaining rebates again. Under SB514, a family of four could receive up to $1,200, Luke said.
Gov. David Ige proposed at the beginning of the year to give tax rebate checks of $100 to taxpayers through Senate Bill 3100, but that bill has stalled. The total cost would have been about $110 million, about $140 million less than what Cruz and Luke are proposing.
Cruz said SB 514 is meant to give some relief to residents, with Luke adding they are cognizant about the inflationary issues residents are dealing with.
“$250 million is a good investment during this time especially, you know, people are continuing to struggle with high gas prices and the cost of living, and we are working with the governor’s office and the department to see if the rebates can happen sooner than later as opposed to waiting until the next tax filing," Cruz said.
The proposal came as Hawaii is experiencing a nearly $4 billion budget windfall, according to the Grassroot Institute of Hawaii. The group wrote a letter of support for SB 514 but urged the House Committee on Finance to increase the tax rebate checks to a little more than $1,300 per taxpayer.
The Hawaii Constitution requires the Legislature to spend excess general fund revenue by either providing a tax refund or tax credit to taxpayers, or making deposits either to a rainy day fund or pre-payment for debt service for general obligation bonds or pension or other post-employment benefit liabilities, according to the bill.
Luke said lawmakers are looking to use the budget surplus to strengthen the economy.
“Just two years ago we were in a place where we were looking at basically a $3 billion deficit and what a difference two years has made," Luke said. "And it’s a combination of the significant amount of federal relief funds, it’s a combination of some of the tourism activity coming back and it really is about us being prudent in the early years to set aside funding for a rainy-day fund and others and so we look forward to coming out of this pandemic making the economy stronger and making investments where we really need it."
If passed, the refund checks would go to all qualifying residents who filed a state income tax return for 2021 before the end of December, according to the bill.
The bill received a do pass recommendation by the House Committee on Finance on Tuesday and has been placed on the calendar for a third reading.