The state is looking at a $1 billion surplus, but don’t expect a refund any time soon.
This is the first time that the surplus has reached this amount.
Nearly 10 years ago, under Gov. Linda Lingle, taxpayers received as much as a $160 refund, and that was for a smaller surplus.
We wanted to know what will happen to the extra money this time. Gov. David Ige didn’t say no to the refund, but he stressed that there are other fiscal responsibilities that he has to consider.
The governor says the billion-dollar surplus comes from different departments tightening their belts along with better-than-expected revenues from the general excise and tourism taxes.
So why not give some of it back to taxpayers?
“We continue to look at that and we’ll be working with the Legislature to develop the financial plan,” Ige said. “We’ll be looking at it. We’ll be working and looking at all the needs of our communities. We still have a significant obligations.”
He adds that he wants to make sure the state is prepared for the next economic downturn.
What it comes down to is that a billion dollars doesn’t really amount to a whole lot. The governor says it’s only about two months worth of bills that the state pays.
In 2007, taxpayers got refunds because the law stated that if there was more than a five-percent general budget surplus, roughly $250 million, for two years in a row, the state had to give some of it back.
But the law changed in 2010 through a constitutional amendment that allowed the state to give refunds, which at times were a dollar, or put the money in a special fund.
“I’d give it back to the public,” said state Sen. Sam Slom, R, East Oahu. “I would not spend it, or second point is to pay down the tremendous debt that we have which is not a popular thing.”
Slom adds that the state owes billions of dollars to state workers’ pensions and health plans.
We brought this up with Tom Yamachika, president of the Tax Foundation of Hawaii. He says even with a surplus this size, the economy can turn for the worse in a hurry.
“It’s that critical where we can run short again that easily?” KHON2 asked.
“Oh easily,” he replied. “Just in this past legislative session, there were proposals to do a number of different kinds of tax hikes just for reasons like that.”
The surplus will be addressed by lawmakers in the next Legislative session.