HONOLULU (HawaiiNewsNow) - The state budget is approved and now needs to be signed by the governor. In order to make up the $1.3 billion dollar budget gap there will be higher fees, taxes and cuts to state agencies.
Lawmakers didn't raise the general excise tax but there are about $600 million worth of higher fees and tax increases.
Hawaiian Airlines is breaking in its new check-in kiosks which is a positive change, but starting in July the company will also have to pay taxes to the state. In order to generate money lawmakers are lifting tax exemptions to various commercial sectors like construction contractors, oil refineries, shipbuilders and Hawaiian Airlines. In total repealing the tax exemptions will bring in $393 million to the state.
"The airlines are already charging lots of fees on baggage, just about everything so it will help the state economy and I think everybody should be sharing the responsibility of paying the general excise tax," said Michael Zawiwi, Waikiki.
Hawaiian Holdings reported an adjusted net income of $45 million last year. Last month the company said the loss of aviation exemptions puts local jobs at risk, will lead to higher fees and hurt the economy.
"Given the budget gap that the legislature was trying to fill, we thought the bill would likely pass. It will be hard on our company, but we will find ways to adjust," said Keoni Wagner, Vice President Public Affairs for Hawaiian Airlines, in a statement today.
Some passengers we spoke with said they would have rather seen an increase in taxes on everyone, rather than on select commercial sectors.
"If it was the general excise tax it could probably be a smaller amount so it would affect each person less individually because it will be covering a broader base of revenues rather than just corporations," said Ed Muegge, Kihei.
Drivers can also expect higher fees when they register their cars after July 1, 2011. The average U.S. car weighs 4,000 pounds and with the weight tax going up one cent per pound that would be a $40 increase. Heavier vehicles weighing between 4,000 to 7,000 pounds will be charged two cents more per pound. Heavier vehicles will be charged even more.
Add to that the vehicle registration fee is also going up to $45, a $20 increase.
"What can you do you have to pay it right, but I don't think it's a good time to be raising any fees right now with the economy as it is," said Jason Kajitani, Hawaii Kai.
"That's what I think most motorists will grumble about, you can charge us but have nice roads you know," said Glenn Matsumoto, Kaneohe.
The law says $40 of the $45 vehicle registration fee will go to the state highway fund. The other $5 will go into the emergency medical services special fund.
The state will also save $800 million in budget cuts and lapses. Each department will decide where it will cut while still maintaining service.