HONOLULU — A new joint state House and Senate package of economic bills is being introduced in the 2020 legislative session taking aim at affordable housing, expanded child care, and tax relief for Kaua‘i’s working families.
“We are aware that this is a good first step toward making a difference and, hopefully, with continued cooperation from all parties, we will continue to invest in Hawai‘i and in our youth,” Senate President Ronald D. Kouchi (D-Kaua‘i, Ni‘ihau) said.
House Majority Floor Leader Dee Morikawa said the bill package being introduced this session could change the lives of many of Kaua‘i’s working-class families for generations to come.
“This package focuses on removing economic barriers, the income inequalities, that keep nearly half of our residents living paycheck to paycheck,” said Morikawa. “We are increasing wages and providing tax benefits, investing in child care and early learning, and creating more affordable housing units to end the cycle of poverty, increase economic stability and expand the middle class.”
Morikawa said that the joint legislative bill package is in response to the issues highlighted in the Aloha United Way-sponsored report, “ALICE: A Study of Financial Hardship in Hawaii.”
The ALICE (Asset Limited, Income Constrained, Employed) report describes the economic hardships facing many working individuals and families in Hawai‘i. According to the report, after allocating monies to pay for expenses such as housing, child care, food, taxes, health care and transportation, a family of four needs to earn roughly $77,000 a year simply to survive.
This is the first joint House and Senate legislative bill package since 2004, and it has the strong backing of Gov. David Ige and several community advocacy groups.
The economic package includes:
• Targeting tax relief for working class families and individuals;
• Increasing the minimum wage to $13 an hour by 2024;
• Providing $75 million in general obligation bonds for the neighbor island counties to defray affordable housing infrastructure costs;
• Providing tax exemptions for developers to build market-priced homes;
• Expanding childcare options for parents to all university sites statewide and in rural areas with limited childcare options;
• Creating a new Schools Facilities Agency and allow the state Department of Education to focus on education.
Reducing income inequality
To put money back into the pockets of residents, one measure will provide tax relief for working families by making the Earned Income Tax Credit refundable and permanent. That means qualified families can get a cash refund of up to $380 through this tax credit.
According to the ALICE report, minimum wage is not nearly enough to live on. This package includes a bill that will provide incremental increases in the minimum wage bringing it to $13 an hour by 2024.
Representative Nadine K. Nakamura (D-Hanalei, Princeville, Kilauea, Anahola, Kapa‘a, Wailua) said she is excited about these bills to support working-class families.
“Increasing the minimum wage, making the Earned Income Tax Credit refundable, and increasing the food-tax credit will go a long way towards easing the high cost of living for working families on Kaua‘i,” Nakamura said.
Increasing affordable housing
Many in Hawai‘i cannot afford to buy a home, especially when they have to compete with outside investors with deep pockets. To address this issue, the state will identify publicly-owned properties that can be used to develop 99-year leasehold units. Half of those homes will be reserved for working-class families earning 140 percent of the area median income.
The state will also invest $75 million in general obligation bonds on the neighbor islands to defray affordable-housing infrastructure costs, and offer a General Excise Tax exemption for projects that meet the goal of 140% AMI or below.
“This funding will directly benefit Kaua‘i residents by helping to pay for the infrastructure — the roads, sewers, utility lines — that developers need to build affordable housing,” said Rep. James Tokioka (D-Wailua Homesteads, Hanama‘ulu, Lihu‘e, Puhi, Koloa, ‘Oma‘o). “Our residents need homes they can afford.”
Access to learning for all 3- and 4-year-olds
Many families are forced to forgo child care and early learning for their children, and those who do budget for child care spend about one-third of their incomes on it.
To solve this problem, this package contains a bill to create a public-private model to increase the capacity at existing private childcare facilities supported with public funds and also develop new facilities for early-learning programs for 3- and 4-year-old children where they are needed.
State-owned sites in rural areas and on all the university campuses will provide space to expand the number of early-learning centers.
“This will be a great help for our young people to learn how to learn before they start public school,” said Nakamura. “Studies have shown that children with early-learning skills do better in school.”
Building educational results
In order to allow the DOE to focus on its primary purpose of teaching children, the Legislature proposes to create a new Schools Facilities Agency to oversee major construction and repair projects in public schools.
The governor will appoint an executive director for the new agency, which will be responsible for all public-school construction except for repair and maintenance projects that cost $100,000 or less.
“Allowing the DOE to focus on teaching our children rather than construction and repair projects will be a great benefit for our students, parents and teachers,” said Morikawa.
“It is a matter of not having to worry about issues outside of their primary mission.”