March 10, 2002
Contact: Rep. Galen Fox
(808) 586-8520


2002 Legislative Halftime Report:

More taxes, more regulation, more government, and public opinion ignored


The State House Republican Caucus has released the following statement:

"The 2002 Legislative Halftime Report shows the public is losing the battle with the Democrat Majority, who are pushing through huge tax increases, more business regulation, and a larger state budget. The Democrats have also ignored the public's desire to end the traffic camera system and to not use the Hurricane Relief Fund to balance the budget.

At the halfway point of the legislative session, the Democrats plan to increase the tax burden on Hawaii's residents by more than $150 million per year. Tax increases include $108 million to pay for long term care, $40 million in liquor and $6 million in cigarette taxes.

The long-term care proposal is a $240 per year tax on every working family in Hawaii. People would not be able to collect the full benefit ($70/day for 365 days) until they have been paying for 10 years. This will be a huge cash fund for lawmakers, $100 million a year and more than a billion dollars in ten years. It will become an attractive source of funds to raid just as they are raiding the Hurricane Relief Fund now.

In the nation, Hawaii already has the second highest tax on cigarettes, the fourth highest tax on liquor and the highest tax on beer. High taxes on cigarettes opens the door for a black market that is thriving in other places. California estimated it was losing $50 million a year in cigarette taxes two years ago due to the black market. After doubling their tax to $0.87 per pack, they now estimate their loses at $150 million a year.

The state will also enact fee increases related or attached to marriage licenses, burials, and auto insurance.

While taxes are increasing, state regulation of prescription drugs, health insurance, gasoline prices, and home mortgages show the Democrats do not believe in competition but rather believe that government can and should control all aspects of business. In the long run this "control" of business adds to national and world perception that Hawaii is not business friendly.

In the last ten years, the operating budget of the state has nearly doubled from approximately $3.8 billion to a little more than $7.0 billion. This growth has occurred during terrible economic times and shows government spending takes precedence over the economic plight of any individual. As further evidence of out of control spending, the state will carryover more than $300 million in savings that could easily pay for project revenue shortfalls. Despite these carryover savings, the state continues to threaten vital programs if it does not get the Hurricane Relief Funds and tax increases.

Democrats should not raid the Hurricane Relief Fund because the public is clearly in favor of either returning the money or keeping it for future disaster uses. The state should also be looking at a complete review of the traffic camera program.

Although the half-time score in the 2002 Legislature shows the public losing to big government, the House Republicans remain committed to fighting for the people and reversing the current direction of this legislature.