2018-03-13 Letter to Lorraine R. Inouye re HB 2587, HD 1 Relating to GET Surcharge Extension

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Harry Kim AIayoi Wil Okabe Managing Dire? /or Barbara J. Kossow Deputy 1Vianaging Director ffi. re 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalole Hwy., Bldg C • Kailua-Kona, Hawaii 96740 (808) 323-4444 • Fax (808) 323-4440 March 13, 2018 Senator Lorraine R. Inouye, Chair Committee on Transportation and Energy Hawari State Capitol, Room 414 Honolulu, HI 96813 Dear Chair Inouye and Committee Members: Re: HB 2587, HD 1 Relating to GET Surcharge Extension Hearing Date: 03-16-18 — 10:00 am; Conference Room 414 Please accept this testimony in general support of HB 2587, HD 1, extending the opportunity for a county to add a surcharge to the State GET. As you may know, 1 had opposed increasing the GET in Hawaii County for as long as I have •een Mayor. However, 1 have had to come to terms with the fiscal vise that makes it nearly impossible to (1) balance our County budget, and (2) provide the services that our communities need, without increasing our tax revenue. 1 therefore have sent a proposal to our Council calling for the surcharge. The Council has postponed action until May. Since Hawail County needs additional time to decide whether or not to adopt a surcharge, HB 2587, HD 1, has gone from "nice -to -have" to "must -have" legislation for us. We 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 surcharge is adopted late. We need the tax to start January 1, 2019 to balance our budget, and we are not sure that a September deadline would be acceptable to DOT. If it is not acceptable, but DOT could live with a June 30 deadline, we would ask that it be made clear that, if the surcharge is adopted by the end of June, it would be effective for calendar year 2019. While we would defer to your staff and DOT for the exact language, we think something like the following amendment to Section 2 of this bill would accomplish the purpose: County of Hawaii is an Equal Opportunity Provider and Employer.