Editorials for Tuesday — July 29, 2003

• Sales tax

• Kauai Power Partners

Sales tax

Mayor Bryan Baptiste and Council Chairman Kaipo Asing are correct in coming out against imposing a new one-percent state sales tax on sales made on Kaua‘i.

Asing said property tax revenues are strong on Kaua‘i, and the people don’t need to be made to pay a new tax.

Baptiste said a new tax wouldn’t help the Island out financially in the long run.

Though the state’s tax on sales seems moderate compared to those charged in California and other states, Hawai‘i’s “excise” tax can pyramid on some purchases and charges, and can in reality add a lot more than 4 percent to an item.

Adding another percent to this tax could actually mean a two, three or more percent increase on some items.

The concept would be to add this tax to replace county revenues from the state’s hotel tax, or transient accommodation tax, that hotel guests pay in Hawai‘i.

The TAT revenue has been moved around since its inception over 10 years ago, and is a cash cow for the counties in Hawai‘i. Taking this revenue away would be a mistake.

Finding ways to make government more efficient should come before raising taxes to continue to pay for bloated government service charges.

Cuts in state government budgets by Gov. Linda Lingle are steps in the right direction. However, reaction from within state government to her call for continued reductions in spending is sure to soon raise complaints about a downturn in state services.

Kauai Power Partners

A trail begins this week in San Diego that might affect the future of electricity generation on Kaua‘i.

Power Partners International of La Jolla in San Diego County is suing Virginia-based utility giant Dominion Resources over funds Power Partners believes is still due the company for consulting work.

Power Partners served as consultants during the planning and permitting process involved in building the electric generating plant now located on Ma‘alo Road between Wailua Falls and Kapaia Valley.

The plant was planned and put into construction prior to the purchase of Kaua‘i Electric by the Island’s cooperative utility, Kaua‘i Island Utilities Cooperative. KIUC isn’t directly involved in the lawsuit, which Dominion tried to move to Pittsburgh in federal court. The federal judge instead moved it back to state court in California.

A resolution of this situation is needed before KIUC moves ahead with the purchase of the new power plant, which is much needed in the longterm as the generating plant located at Port Allen continues to age. Additional generating power can be built adjacent to the new plant.

How the trial in San Diego works out will give a clear direction on the path needed to follow in purchasing the power plant. Hopefully a clear cut decision will be reached in the case.


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