State considers another tax refund to ease pinch of Hawaii’s rising cost of living
HONOLULU (HawaiiNewsNow) - Fresh from issuing a $300 tax rebate to residents, Gov. Josh Green’s administration is considering another tax refund this year.
But unlike the previous rebate, this one is for the middle-class and low-income residents struggling with Hawaii’s high cost of living and inflation.
“We’re looking at all types of support that we can do to the residents of the state, especially those that are within the middle and lower income to provide them the kind of relief in order to reduce their cost of living,” said state Budget Director Luis Salaveria.
Sources say the tax refund could total anywhere from $100 million to $300 million.
The latter is nearly the same amount approved by lawmakers last year.
The refund proposal is part of the Green Administration’s tax relief plan, which will also include exemptions and credits for food and even vehicle registrations.
The tax refunds are an outgrowth of the positive outlook for Hawaii’s economy.
While the U.S. economy is expected to go into recession later this year, economist Carl Bonham thinks the state will avoid one.
A U.S. recession could mean fewer westbound visitors, but Bonham believes that Hawaii’s construction industry will remain strong.
“There’s an enormous amount of work in the pipeline, mostly from federal spending work at Pearl Harbor but more broadly across across the state on federal infrastructure projects,” he said.
Bonham added that the Japanese tourist market will likely rebound slowly this year and next.
Bonham’s and Salaveria’s comments were made during a House Finance informational briefing Wednesday.
Both said they expect the state Council of Revenues ― when it meets Thursday ― to lower its outlook for tax revenue growth for the 2023 fiscal year. It’s current forecast is for 6.5 percent in tax revenue growth.
But Salaveria said that reduction isn’t due to the economy.
“The prediction in the decrease is not due to any decrease in economic activity. It is due to the constitutional rebate,” he said.
“So we do expect that those healthy balances going forward will continue.”
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