Governor Neil Abercrombie highlighted the state's $844 million surplus and pushed for tax breaks for seniors, along with raising the minimum wage during his fourth State of the State Address Tuesday morning at the State Capitol.
"Average weekly earnings have increased 16% since 2007. For minimum wage workers it's zero," described Abercrombie during his annual address to lawmakers, announcing his proposal to raise the minimum wage by $1.50 to at least $8.75 by January 2015.
"We tried to figure out what inflation had taken place since 2007 and simply added it up, so the proposal would simply be the same buying power as existed in 2007," explained Abercrombie.
But Senator Clayton Hee says the amount is insufficient and should be much higher. He's introducing a $10.10 minimum wage bill, mirrored against that which passed the U.S. Senate.
"At $10.10 a minimum wage earner makes $21,000 a year in a state where the median price of a home is $685,000," said the Senate Judiciary & Labor Committee Chair.
"Most people don't appreciate that when the minimum wage is increased, wages for all others also is increased. When the tide comes in all boats float for all wage earners, and so we'll try our best to lift the boats to a higher level so that they can afford to live in Hawai'i," Hee said.
Governor Abercrombie agreed $8.75 should be the bare minimum.
"In order to get ahead, really it'd have to be higher than that. So that's fine with me and I am aware of it and that's why I said 'at least'," the Governor said in response to inquiries about Senator Hee's proposal.
Abercrombie also wants tax exemptions for seniors, a move he says will provide more fairness for those on fixed incomes.
"Thousands of Hawai'i seniors are paying income tax even on low and middle income retirement benefits," the Governor announced.
Abercrombie is proposing an exemption on any presently taxed income from all sources for taxpayers age 65 and older with an adjusted gross income (AGI) of $25,000, $35,000 for seniors who are heads of households, or $45,000 for seniors joint filing (affecting approximately 25,000 Hawaii seniors.
Senator Sam Slom says he understands kupuna are struggling but says so is everyone else.
"Cut the GET (General Excise Tax), get rid of the tax on food, on all medical and all that -- that will help people. Instead of tax credits, lower the tax rates. Make it fair for everyone, rather than taking from one group and subsidizing another," explained the Senate Minority Leader.
Abercrombie estimates his sliding scale tax break proposal will cost the state less than $15 million in revenue.
"Because of the stability of the state budget we can not only handle it, but I think we can extend it into the future," Abercrombie said.
But House and Senate Finance Committee Chairs say they plan to remain cautious.
"If you look at the executive budget request during the Governor's tenure the Legislature has cut close to around $800 million of his request, so if we had done everything the Governor requested than we wouldn't be sitting on this carry over balance that we see today. Just last year we cut about $250 million from his request and that's why we're going to continue to take a cautious approach when we do the budget," explained Representative Sylvia Luke, the House Finance Committee Chair.
"We don't want to give people false promises. We think it's irresponsible to promise things we cannot sustain, and so as we approach the budget it really is about what can we afford and if it is a core service or not and would we be able to sustain it over the long haul," described Senator David Ige, the Senate Finance Committee Chair.
"The $844 million dollars means we can pay our bills and that we have funds to meet anticipated costs, and within that there is sufficient funds then to also accommodate initiatives. The initiatives that we want to look at here are book-ended -- early childhood education and seeing to it that seniors on fixed income are able to sustain themselves. A combination of tax relief and investment at the beginnings of life, I think, are good investments that pay good dividends," Abercrombie said.
The Governor touched on everything from expanding early childhood education to combating invasive species -- even mentioning the need for more prison facilities and his support for the thirty meter telescope on Mauna Kea. Noticeably absent from the Governor's address was any mention of the Special Session passage of Hawai'i's Marriage Equality Act or the growing debate regarding GMO's and pesticide use, the latter of which lawmakers say will definitely be discussed this session.
It is an election year for the Governor. Senate Finance Committee Chair David Ige has already announced he'll be running against Abercrombie in the Democratic primary.
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