LIHUE — In a 4-3 decision Wednesday, the Budget and Finance Committee voted to defer the proposed GET increase to May.
“We have amendments we need to vote on, so let’s have those ready by then,” said Councilman Arryl Kaneshiro, chair of the Budget and Finance Committee.
Originally, Bill No. 2610 proposed a half percent hike, to 4.5 percent, which is expected to generate about $250 million. If passed, the added revenue will go toward transportation and traffic improvements around Kauai.
Kaneshiro, along with Mason Chock, JoAnn Yukimura and Gary Hooser, voted to defer the measure.
“I don’t support any tax increase,” Hooser said. “It’s a bad tax, and the community deserves a break.”
Councilmembers Ross Kagawa, KipuKai Kualii and Council chair Mel Rapozo voted against deferring the bill, saying it was time to act.
“For budgetary purposes, we need to know today,” Rapozo said.
Kagawa added: “It’s time to take a look at our budget and take some cost-cutting measures.”
He suggested looking at police, fire and overtime budgets and making cuts.
Kagawa also proposed making the road and infrastructure improvements the community wants.
“Let’s get back to the basics and fix what we have,” he said. “The public wants us to relieve traffic congestion, improve the roads for cars and fix bridges that are falling. Let’s fix the necessities and show the public we are putting their taxes to good use. Let’s earn the respect from the public before we even think about increasing something like the GE tax.”
Potential impact on the community was a reoccurring concern during Wednesday’s GET discussion. The tax affects sales on just about everything, including basics like groceries, which would hit the low-income hardest.
“If this bill was to pass, it would create hardship on those in our society who are struggling,” Kualii said.
“The GET is going to affect the people who cannot afford; people who are on a fixed income and can’t afford the extra $20,” he said. “I cannot stand when people say ‘it’s only $20.’ If you don’t have $20, it might as well be a million dollars because you don’t have it. And there are many people on the island who are in that position.”
Kagawa questioned how much more Kauai residents can take.
“(Hawaii) already is the second-highest for taxes in the nation,” he said. “Do we want to be the top? Is that what we’re trying to achieve?”
Chock suggested discussing ways to shelter some of the population from the tax.
“I want to open up a discussion about sheltering those who shouldn’t be affected — like the elderly and low-income families,” he said.
But Yukimura said expanding the public transportation system will help the low-income families.
“The best way to offset the regressivity of the excise tax is to put in transit expansion,” she said. “Because a family or a person who is using it can save thousands of dollars a year.”
Bill 2610 will be discussed in committee at the May 11 meeting.