Aloha Cost of Government Day!?

Wednesday, August 12, 2009 10:00 AM by Monika Ciesielska

Well, maybe not quite so “Aloha”? We’re pretty sure Hawaiians will not be very cheerful after they hear this news…

With the Cost of Government Day 2009 (COGD 2009) for Hawaii falling on August 12, the same day as the national average, the average Hawaiian must work 224 days out of the calendar year to pay off his or her share of spending and regulatory burden imposed by government.

Last year, Hawaii had the dubious distinction of having the 41st-latest state COGD. However for FY 2009, the Hawaiian legislature reduced the tax burden on its residents by $1.5 million. This was one of the reasons why the “Aloha State” jumped by five spots in the ranking, making it the 36th latest state to mark COGD this year.

While this seemed like a move in the right direction, this year’s legislative activity will likely have undone all improvements, and in fact made things much worse for the state.

Unfortunately for citizens, visitors and businesses in Hawaii, in May 2009, state lawmakers imposed, after overriding the governor’s veto, a litany of tax increases:

• The hotel occupancy tax was raised by 28% - the perfect way to kick the already seriously wounded tourist industry on the islands;
• The top income tax rate increased to 11%, making it the highest in the country;
• Taxes on the sale of property and second home purchases also went up.

What’s more, Governor Lingle, while vetoing the above-mentioned increases only to see her action overridden, unfortunately signed an increase in the state’s tax on cigarettes raising the rate to $3 per pack, shortly after the federal government already imposed a 61.66 cent per pack hike in the federal excise tax.

Hawaii taxpayers narrowly escaped the attempt to require consumers to pay taxes on purchases made over the Internet, with Gov. Lingle’s veto standing.

However, overall, the damage seems to have been done, and it looks like we must expect another drop in the ranking for Hawaii in 2010.

(photo by bonacheladas)

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