2018-02-12 Letter to Donovan M. Dela Cruz re SB 2614, SD 1 Relating to GET Surcharge

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Harry Kim Mayor 1,111 Wil Okabe ilk:mixing Director Barbara J. Kossow Deputy ilianaging Director 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalole Hwyn .Idg C • Kailua-Kona, Hawai`i 96740 (808) 323-4444 • Fax (808) 323-4440 February 12, 2018 Senator Donovan M. Dela Cruz, Chair Committee on Ways and 'eans Hawail State Capitol, Room 211 Honolulu, HI 96813 Dear Chair Dela Cruz and Committee Members: Re. SB 2614, SD 1 Relating to GET Surcharge Hearing Date: 02/13/18 — 10:15 am; Conference Room 211 Please accept this testimony in general support of SB 2614, SD I extending the opportunity for a county to add a surcharge to the State GET. As you may know, 1 have been opposed to increasing the GET in Hawail County for as long as 1 have been Mayor. However, I have had to come to terms with the fiscal vise that makes it n-arly impossible to (1) balance our County budget, and (2) provide the services that our communities need, without increasing our tax revenue. 1therefore sent a proposal to our Council calling for the surcharge, with the understanding that it should be acted on as a last resort. With March 31, 2018 rapidly approaching, Hawaii County may need athitional time to make the difficult decision whether or not to adopt a surcharge. For that reason, SB 2614, SD 1 would be to our benefit, and !ask that you give this bill your favorable consideration. 1 would ask for one amendment The Department of Taxation needs time to prepare appropriate forms, and asked that the tax increase be effective January 1, 2020, if the tax is adopted after March 31 of this year. The prior committee did not make any distinction, and simply moved the start date to 2020. It is still possible that Hawaii County will adopt the increase prior to March 31, 2018, so we would suggest that the DOT concern can be addressed without srecluding an earlier start date. While we would defer to your staff and DOT for the exact language, we think something like the follow ng would accomelish the purpose: County of I lawai'i is an Equal Opportunity Provider and Employer.