2019-03-25 Letter to Donovan M. Dela Cruz and Gilbert S.C. Keith-Agaran HB 1394, HD1 Relating to the County Surcharge on State Tax (2)

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Harry Kim Mayor County of Hawaii Office of the Mayor Wil Okabe Managing Director Barbara J. Kossow Deputy Managing Director 25 Aupuni Street, Suite 2603 • Hilo, Hawai'i 96720 • (808) 961-8211 • Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalole Hwy., Bldg C • Kailua-Kona, Hawai'i 96740 (808) 323-4444 • Fax (808) 323-4440 March 25, 2019 Senator Donovan M. Dela Cruz, Chair Senator Gilbert S.C. Keith-Agaran, Vice Chair Committee on Ways and Means Dear Chair Dela Cruz, Vice Chair Keith-Agaran, and Committee Members: RE: HB 1394, HD1 Relating to the County Surcharge on State Tax Thank you for this opportunity to testify in favor of HB 1394, HD1. But first, I would like to thank you for your support for the Hawaii County disaster recovery bills, HB 1180 and SB 1302. You know how important those bills will be for our entire community, and we are grateful and want to publicly acknowledge all those who pulled together to get us this far. With respect to HB 1394, a top priority for me this Session is to get some flexibility in how GET surcharge funds can be spent. HB 1394, HD1 does this in a way that would be straightforward, but without being open-ended. It would be very important for Hawaii County, but would benefit the other neighbor islands as well, as reflected by the fact that (I believe) it was introduced by legislators from all three counties that have a population under the required 500,000. This Committee was willing to give us flexibility last year, but the language that was used created concerns. This time around, the authors worked to make sure the language would be acceptable to all parties, and we believe they have accomplished that. I know that an earlier concern was that the counties were not demonstrating much enthusiasm for a GET surcharge. I am pleased to be able to report to you that Hawaii County now has completed action to impose the full ' % GET surcharge that this Legislature had previously authorized. Please be assured that it is not our intent to downgrade transportation, which is the present beneficiary of GET funding. Rather, each County has expressed different unmet needs for which a funding source has yet to be identified; for example, "public safety" for Hawaii County, or "infrastructure" for Kauai. Higher contributions to ERS and other post -employment benefits have had significant impacts on our ability to fund operations throughout the county. For Hawaii Island, dealing with multiple natural disasters, the cost of providing public safety during these events has taken its toll and depleted our funds. Please give HB 1394, HD1 your favorable vote, with an effective date "upon approval." Respectfully Submitted, r-! Harry Kiril MAYOR County of -Hawaii is an Equal Opportunity Provider and Employer.