Governor's Vetoes Overridden

The 2005 State Legislative Session adjourned on May 5 and Governor Linda Lingle by law had to inform the leaders of the House and Senate of her intention to veto any bills by the end of June. She then had until July 12 in order to actually veto the measures indicated and the Legislature could call itself back into special session to try and override the vetoes.

The Governor sent and original list of 33 measures (pared to 28) that she said she intended to veto. Among them was the most controversial, HB 1309, which gave the counties the power to increase the state General Excise Tax from 4 to 4.5%, and rewarded the state with a 10% cut of the increase. It represents the largest single tax increase in Hawaii’s history. Every business organization opposed the tax —except the Chamber of Commerce of Hawaii. Then the Governor on Friday, July 8, said she would veto the bill unless two specific conditions were met and the tax was tied to tax relief. Drama ensued as Democrat Mayor Mufi Hannemann cut short a trip to Japan to join Democrat House, Senate, and Congressional Democrats to lobby the GOPGovernor.

Lingle stunned her most ardent supporters by reversing her stand on Monday, July 11, saying she would allolw the bill to become law. None of her specific demands were realized and the Democrats fought over who should get the credit for the tax increase.

The next day, the Legislature convened in Special Session to override 12 of 12 vetoed bills, leaving the remaining 16 vetoes standing. Interestingly, the only veto that could have been sustained, was HB 1309 because enough Democrats voted against the tax during the regular session to “veto proof” it.

A complete list of all vetoed bills appears below. Those bills in bold face and with an Act number next to the bill number are those that were overridden by the legislature. More bills, acts and legislative information can be found at www.capitol.hawaii.gov.

Minimum Wage Hike Becomes Law

Despite opposition by every business organization, including Small Busainess Hawaii, and an attempt to leverage a non-veto for unemployment compensation tax relief as well as a higher tip credit for Hawaii’s restaurant industry, in the end, the Governor caved on this bill too getting nothing in exchange for allowing more costs for business.

Beginning January 1, 2006 (note: Small Business News reported a wrong date in last month’s issue based on an earlier version of the bill. SBH apologizes for the error) Hawaii’s current minimum wage increases from $6.25 to $6.75 an hour. A year later, January 1, 2007, the wage goes up to $7.25 per hour.

The current federal minimum wage is $5.15 an hour.

August 2005 SB News Front Page

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Copyright 2005 Small Business Hawaii. Last update: August 2, 2005