Lowell L. Kalapa is president of the Tax Foundation of Hawaii.
BY LOWELL KALAPA | SPECIAL TO WEST HAWAII TODAY
One would think lawmakers in an election year would shy away from raising taxes and imposing new fees, but that is not the case at the state Capitol in Honolulu.
Perhaps lawmakers hope no one will notice or that the intent of the new fee or charge will sway taxpayers to buy-in to the proposal. However, these proposals are nothing more than another grab for money legislators like to spend.
For example, take a spate of measures that would charge consumers as much as 25 cents per bag at the checkout counter of a retailer. No doubt, the emotional appeal is the fee will discourage customers from having their purchases bagged in single-use plastic or paper bags proponents believe will be tossed willy-nilly in the trash or allowed to pollute the environment, with visions of bags blowing down the street or across the islands’ pristine beaches.
The real intent behind such a fee is to raise more money for the state general fund or, as in one proposal, for the state’s trail and access program. In one bill, part of the fund is designated to run the bureaucracy overseeing a program in the Department of Health. In that bill, $800,000 of the fees would be set aside for DOH administrative, audit, compliance and enforcement activities associated with the collection of the single-use checkout bag fee, with any funds in excess of those needs going toward educational outreach to retailers regarding the single-use checkout fee program. The next $11 million — that’s right, $11 million — of the fee shall be deposited into the natural area reserve fund, to be spent by the Department of Land and Natural Resources. Excess funds collected beyond those amounts will be deposited into the state general fund.
Readers should note none of the funds collected is designated for educating consumers to use reusable shopping bags, as opposed to single-use bags. Obviously, the proposal has no intention of educating the consuming public that single-use bags are harmful to the environment.
What is the purpose of the fee other than to penalize those consumers who do not bring a reusable shopping bag to the store? Will the fee indeed discourage consumers from using single-use bags?
What the fee does is make the whole shopping experience regressive. For those who can afford the extra 25 cents per bag, they probably will not blink an eye in exchange for the convenience of not having to drag a reusable bag to the store. Those who can’t afford the extra 25 cents will be forced to pay, should they not have a means of bagging their purchases in a reusable bag. Proponents will argue the financial disincentive will force customers to change their ways. But will it? And what about those customers who are nonresidents and are suddenly surprised by the charge?
If the authors of these measures were truly sincere about cleaning up the environment, why not impose an outright ban on single-use bags. All three neighbor island counties have or soon will impose a ban on single-use bags. The impact of this bill will largely affect Honolulu consumers where, of course, the bulk of the resident population lives.
These measures are nothing more than another legislative grab for money and sponsors should be ashamed for so doing. Unlike the bottle bill, which imposes a nickel per beverage container fee, there is no return of the fee for the single-use bag. It is an outright tax.
This time, lawmakers are not making the same mistake they did with the bottle bill, the proceeds of which went into a special fund to make refunds required under that bill. The money derived from the proposed bag bill would be locked away in a special fund.
With the single-use bag proposals, lawmakers have no shame designating the funds go to not only the natural area reserve fund but also into the state general fund to pay for everything from education to social services. Who are lawmakers trying to fool?
Taxpayers should also remember the natural area reserve fund is already the beneficiary of earmarked revenues from the conveyance tax. It is curious why this program is singled out for yet another earmarked source of funds. Perhaps it is time for an audit of the natural area reserve fund.
Lowell L. Kalapa is president of the Tax Foundation of Hawaii.