Senate holding firm on not taxing pensions

Sen. David Ige
Sen. David Ige
Barbara Kim Stanton
Barbara Kim Stanton
Rep. Marcus Oshiro
Rep. Marcus Oshiro

By Ben Gutierrez - bio | email

HONOLULU (HawaiiNewsNow) - Lawmakers were expected to work up to a midnight deadline at the State Capitol to finalize bills for this legislative session.

Those bills include proposals that would raise about $500 million dollars through tax hikes in an effort to make up a $1.3 billion budget deficit.

One of the measures being discussed Friday night was a House measure that would tax the pensions of couples making more than $200,000 a year. The proposal would also only tax pensions of more than $48,000, and would affect just over four thousand pensioners.

The chair of the senate Ways and Means Committee held firm against any pension tax.

"The question, for us, is a policy question: should you tax, or should you not tax?," said Sen. David Ige. "We just believe that the decision to tax pensions should be thoughtful rather than just forced by balancing the budget."

The AARP said it would accept a tax on pensions, but only as a tax resort, but it did not like the house proposal.

"If you were going to tax pensions, why would you do it like this?," asked AARP state director Barbara Kim Stanton. "It's so complicated, it's going to be difficult to administer, and on top of that, it doesn't even raise that much money."

Stanton added, "You're talking about $7 million. A real drop from the $112 million that the governor first proposed."

But House Finance Committee Chair -- and card-carrying AARP member -- Marcus Oshiro said while the senate proposal doesn't tax pensions, its other provisions would affect more taxpayers.

"They affect three or four times more pensioners than our proposals, which taxes pensions at a high income level," said Oshiro. "And that's the difference. That's the distinction that I don't think AARP gets."

"Setting arbitrary thresholds, including or not including different types of income that triggers the threshold, and doing all kinds of different plans to try to minimize the impact, to me, is really about balancing the budget," Ige said.

As of late Friday night, lawmakers had killed a proposed tax hike on liquor and a last-minute proposal that would have allowed casino gambling in Waikiki. House and senate conferees did reach a compromise on capping the counties' share of the transient accommodations tax at $93 million, and also approved a measure that would remove several business tax exemptions.

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