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Bill proposes to raise general excise tax

By Marisa Yamane


A bill before state lawmakers would raise the general excise tax by 1% to help fund the backlog in maintenance and repairs at public schools.

Last year, the general excise tax was increased by a half percent on Oahu to pay for mass transit.
And now a proposal to increase it again, this time for the entire state, but there would be tax relief in other areas.

"I have four kids and we spend at least $250 every time we come to Costco which is about once a week," said Salt Lake resident Jennifer Fukumitsu.

It's expensive to raise a family in Hawaii, and it could get a little more expensive -- for some things -- if a Senate bill becomes law.

"This is 1% combined with tax reform," said Sen. Norm Sakamoto, (D) Education Committee Chair.

Under the bill, the general excise tax would go up by 1%.to 5.7% on Oahu and just above 5% for the rest of the state.

But, you would no longer have to pay taxes on groceries, or over the counter medicine.

Education, including school tuition, and child care costs would also be exempted from the GET.

And those who volunteer at public schools would get a tax credit.

"People have long cried for tax reform because our system perhaps should benefit more the bottom half give them tax relief, the top half and tourists pay a little more," said Sakamoto.

The money generated from the GET hike would fund school repairs and maintenance.

Currently there's a huge backlog in repairs and maintenance, about $257M at UH, $420M at DOE schools, which equals about $677M.

"The June Jones facilities issue at UH brought people's attention to why aren't the facilities in better shape," said Sakamoto.

The money would also be used to help pay for the proposed Keiki First Steps program, which targets early education.

"People said years back they will pay more for education in more than one poll," said Sakamoto.

"If it's to help, I'm for it. I wouldn't mind to help the kids to get a good place," said Theresa Mercado of Liliha.

This afternoon, the Education Committee passed the bill with amendments.

The bill now moves on to the Economic Development and Taxation Committee.

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