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 May 2009 | Small Business News Legislature Set to Increase Taxes by $1 Billion The 25th State Legislature which convened on January 21and is scheduled to adjourn May 7. The legislature is poised to increase several taxes to nearly $1 billion over the next two fiscal years. All of the tax bills currently still alive, could be passed or enacted. The Governor has indicated she will veto a number of tax increases. The Democrats insist higher taxes are needed to balance the budget. The annual state budget is in excess of $7 billion, and there is a projected revenue loss of $2 billion over the next 2 fiscal years and that loss may grow when the council on revenues makes its next projection at the end of May. That is assuming that the tax increases don't drive activities down that don't generate taxes in the first place. Hardest hit by this redistribution of income will be small businesses and the visitor industry. At this point, with days left in the session many of the tax positions are still being used by House and Senate Democrats as bargaining chips for other measures. Several of the threatened tax hike vetoes by Republican Governor Linda Lingle could be sustained despite the overwhelming Democrat majority in both the House and Senate. Some very real differences exist between Majority Democrats in the House and Senate. The difference doesn't involve whether or not to raise taxes on Hawaii's beleaguered taxpayers, only the amount, the kind of tax, and the distribution of more of these taxes. The House and Senate Republicans, who generally have voted in opposition to these tax increases and have warned of the serious economic consequences should they be enacted, are powerless in terms of numbers to stop the tax hikes with 2 of 25 members in the Senate and 6 of 51 members in the House or sustain most of the Governor's promised vetoes.
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