Lawmakers debate progressive taxes, green fuel

HONOLULU — Hawaii lawmakers are exploring progressive taxes, green fuel and a potential Oahu ferry route this week at the Legislature.

A tax bill aimed at helping the islands’ most economically vulnerable would raise taxes for wealthier families while giving tax credits to those with lower incomes. Lawmakers in the Senate Committee on Ways and Means plan to vote on the proposal Tuesday.

The bill would provide a tax credit to low-income renters ranging from $50 to $150 per exemption. It also would establish an earned income tax credit, which advocates have been pushing for in Hawaii for years.

To pay for the credits, the bill seeks to restore higher tax rates on high-income earners to levels that were in effect until the end of 2015.

The Hawaii Appleseed Center for Law and Economic Justice is pushing the proposal, saying the state has the highest cost of living in the nation after adjusting for inflation and that Hawaii is among a minority of states that pushes low-income people deeper into poverty with taxes.

The Chamber of Commerce of Hawaii opposed the part of the bill that restored higher tax rates to wealthier individuals, saying it would hurt small business owners and severely limit their ability to reinvest in their businesses and create jobs.

Two Senate committees will consider a resolution Wednesday urging the state to develop a program to develop green fuels such as biodiesel made from vegetable oil or animal fat while increasing local food production. Gov. David Ige has stated a goal of doubling local food production and the resolution, introduced by Sen. Lorraine Inouye (D-North Hawaii), aims to combine those goals.

A Senate committee will hold a hearing on the state’s $28 billion two-year budget Wednesday.

The bill was passed by the House. But after a recent announcement that state revenues will be lower than expected, the committee will be looking for ways to cut costs.

Also on Wednesday two Senate committees will take up a resolution asking the state to study a potential ferry between Aloha Tower and Sand Island on Oahu. The resolution, introduced by state Sen. Karl Rhoads, says a ferry could ease traffic for workers commuting to Sand Island using its one access road and encourage tourists to visit Sand Island’s waterfront park. Mostly frequented by locals, the beach park is accessible after driving through a large industrial area.