HONOLULU (KHON2) — Labor unions are asking lawmakers to get rid of the state general excise tax on groceries as a way to help struggling families. Supporters of the idea say bold initiatives are needed during these unprecedented times.
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Hawaii Teamsters, ILWU and two other labor unions are working with lawmakers who introduced the proposal. They admit it’s a hard sell considering the state is already dealing with a massive budget deficit, but argue that the money saved by the families will go back into the economy, and that many other states are already doing this.
The unions say the state should get rid of the general excise tax on groceries and over the counter drugs. Like in many other states, the tax would still be added on for cooked foods and at restaurants. Unions say that the four percent discount can go a long way and save each family more than $500 a year.
“The money saved by these families not having to pay for the GET will actually go back into the economy. Whatever they save they can start spending on other purchased goods,” said Wayne Kaululaau, Hawaii Teamsters President.
It’s actually one of two proposals submitted to the legislature. The other would allow those who received unemployment benefits to not have to pay income taxes on them.
“We seem to be stuck in neutral with ideas and our revenue generating and the cost of living. I think somebody needs to make a bold step in lead us in a different direction,” said Kaululaau.
But key lawmakers like Budget and Finance Committee Chairwoman Representative Sylvia Luke says the proposals will hurt more than help. With a budget deficit of up to $1.8 billion, doing away with the GET adds hundreds of millions of dollars to the deficit.
“It will force the governor and the legislature to scale back government services even more, and the governor has continued to look at furloughs, and this will guarantee that there will be more furloughs,” said Luke.
She says she knows many families are suffering but a bigger deficit would also mean cutting more services that affect those who need more help during these difficult times.