STAND. COM. REP. NO. 734

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1346

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Madam:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 1346, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose of this measure is to provide a sustained source of funding for public education in the State.

 

     Specifically, this measure:

 

     (1)  Increases the four per cent general excise tax, allocating a portion of the increased revenues for public education;

 

     (2)  Offsets the effects of the general excise tax increase by establishing a general excise tax exemption for purchases of:

 

(A)  Food;

 

(B)  Medical expenses, including nonprescription medications, prescription eyewear, and physician and dental services; and

 

(C)  A portion of rental expenses;

 

(3)  Exempts from the general excise tax an unspecified amount of the gross proceeds or income from the payment of rent;

 

(4)  Establishes a tax credit for individuals who volunteer their services at public schools;

 

(5)  Increases the state income tax standard deduction amounts; and

 

(6)  Establishes an education funding commission to provide oversight for general excise tax revenues deposited into the education special fund established in this measure.

 

     Your Committee received seven written comments on this measure.  The written comments may be reviewed on the Legislature's website.

 

     Your Committee believes that during the current economic recession, this measure offers a long-term alternative to cutting vital funding for public education by providing a dedicated source of funding for public education while simultaneously addressing Hawaii's regressive tax structure.

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1346, S.D. 1, and recommends that it pass Third Reading.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

____________________________

DONNA MERCADO KIM, Chair