WHEREAS, state and county tax policies can have both positive and negative impacts upon state and county funding resources, the economy, housing options, social safety net programs, the environment, energy, education, and the people; and

WHEREAS, Hawaii's state and county tax policies have worked independently of each other without regard to the cumulative impact and burden upon taxpayers, and at times have been inconsistent, counter-productive, and based on invalid economic assumptions and projections; and

WHEREAS, this was recently demonstrated by the dispute between the State and the City and County of Honolulu over the collection and distribution of the general excise surcharge;

WHEREAS, in recent years, Hawaii's state and county tax policies have also shifted a greater portion of the tax and revenue burden onto the lower and middle income classes and reduced the tax and revenue burden away from the higher income classes, corporations and big businesses, and special interest groups; and

WHEREAS, the counties are faced with ever increasing administrative costs of public services for residents and large daily populations of visitors and military personnel; and

WHEREAS, real property taxes are the primary source of revenues for the counties; and

WHEREAS, real property values and real property taxes have skyrocketed in the four counties; and

WHEREAS, the increases in real property taxes have been "too much and too fast" for most taxpayers; and

WHEREAS, the present administration of real property taxes imposes an unfair burden upon homeowners and renters and, in many cases, upon those who can least afford it; and

WHEREAS, Hawaii homeowners and renters, particularly the elderly, the poor, the disabled, and those on fixed low incomes, are at risk of losing their homes in this already tight housing market; and

WHEREAS, homeowners and renters have no control or defense against rising property values, which are fueled by out-of-state and global economic forces; and

WHEREAS, the Mayor of the City and County of Honolulu has recently formed a Tax Policy Committee in response to opposition to the skyrocketing real property taxes and the City Council of the City and County of Honolulu has passed tax relief measures, which many believe is insufficient; and

WHEREAS, it is impossible to achieve a fair and equitable tax revenue base for the counties to provide essential public services if the base is limited to the real property tax; and

WHEREAS, the counties have sought and continue to seek more sources of revenues from the State, including the recently passed general excise tax surcharge, the transient accommodations tax, and state grants and appropriations; and

WHEREAS, better cooperation and coordination between the State and the counties could make tax collection less costly, more efficient, and more equitable; and

WHEREAS, a holistic review of Hawaii's state and county tax structures should be conducted to achieve an equitable system for the State, the counties, and the taxpayers; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2006, that it is requested that a tax policy task force be created to:

BE IT FURTHER RESOLVED that the Tax Policy Task Force should be comprised of five members with a member selected by:

BE IT FURTHER RESOLVED that the member selected by the Governor is requested to convene the first meeting of the Tax Policy Task Force; and

BE IT FURTHER RESOLVED that the Director of the Department of Taxation and the directors of the finance departments of Honolulu, Maui, Hawaii, and Kauai counties are requested to cooperate with the Tax Policy Task Force; and

BE IT FURTHER RESOLVED that the Tax Policy Task Force make a report, including any findings and recommendations, to the Legislature not later than twenty days prior to the convening of the Regular Session of 2007; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Governor, the Director of the Department of Taxation, and the Mayors and the directors of the finance departments of Honolulu, Maui, Hawaii, and Kauai counties.

Report Title:

Review Hawaii's State and County Tax Structures