HomeMy WebLinkAboutCOM 0751.004 2014-2016 s1pcRA OLEG
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Murashige, Laura
From: Donald Rudny <mkea13800@gmail.com>
Sent: Sunday, April 17, 2016 3:25 PM ���6� `'� �' '�'i� �' �L�
To: Council Testimony
Cc: Onishi, Dennis; Poindexter,Valerie
Subject: GET Surcharge Testimony
Aloha Hawaii County Board,
I wish to provide written testimony for the April 19, 2016 public hearing regarding the Hawaii County GET
surcharge bill.
My understanding is that the bill stems from the State law allowing for the existing surcharge to be extended to
the year 2027. The original bill passed several years ago gave neighboring counties the opportunity to enact the
surcharge, but it was not done so at that time. This extension was passed by the State to provide additional
revenue for the HART rail system on Oahu. As before, the extension allows the neighboring counties another
opportunity to enact the 1/2% surcharge. It must be enacted before June 30, 2016, or the opportunity will be
lost. Enacting the surcharge will result in a 1/2%tax on retail sales of goods and services here on the Big
Island. The revenue from the tax can only be used for transportation related improvements.
My position on this is unusual in that I am against the tax, but for enacting it at this time. The State has put the
neighbor counties in a difficult position. They have reduced the County's portion of the TAT during the
recession years and failed to restore it to pre recession levels. The runaway costs of the new rail system have
created a black hole of debt that is pulling money away from all the Islands by the State's reluctance to give the
neighbor Islands their fair share of the TAT. Failure to pass the GET surcharge by Hawaii County will give the
State another excuse for withholding the TAT.
The GET surcharge is regressive in nature and will negatively impact the financially challenged families the
most. The tax will apply to basic needs such as food, clothing and medicine. If the County needs additional
revenue, some other less regressive source should be considered.
I would suggest that the County Board and Mayor pursue three avenues to strengthen the financial situation of
the Big Island without the GET surcharge.
1. Continue to push for a higher percentage and fair share of the TAT. I know there are efforts to do that, but
more political pressure should be put on our state representatives and governor.
2. Review county expenditures and streamline systems to improve efficiency and reduce costs. The new mayor
and board should work together to accomplish this. My perception over the past eight years is that this has not
happened. There should be plenty of room to accomplish some cost reduction.
3. Property tax is the County's biggest source of revenue. A task force was established a few years ago to
review the County's real property assessment process. The findings indicated that there were a number of unfair
assessments resulting in a reduction of property tax collections. Recently, the County ensured that homeowner
exemptions were legitimate by requiring verification of residency through income tax records. This was a great
start and should generate a substantial increase in revenues. My understanding is that there were other areas in
the assessment process that needed some scrutiny. One such area is the agricultural exemption. This exemption
should only be given for legitimate agricultural businesses. The farm/ranch operation receiving any AG
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exemption should show proof of business through income tax or GET filings. Partially leased land for farming
should be granted an exemption for only that portion of land used for farming. I believe the County Code
already requires this, but it apparently isn't being followed.
Raising taxes to generate revenue is easy, so it's typical that political administrations will do that. Streamlining
government, being more efficient and creating fairness in taxation is hard, so it gets put aside. When I was a
young man growing up in Chicago, I was inspired by one of America's greatest leaders, John F. Kennedy. In a
speech given to Rice University in September of 1962, he stated:
"We choose to go to the Moon in this decade and do the other things, not because they are easy, but because
they are hard"
And, so, I ask this board and future boards to do the hard thing, and cut costs and implement fair
taxation. Anyone can just raise taxes. After all, it's easy.
I understand that the window of opportunity to pass the GET surcharge is short, so I support it's passage with
the idea that the new board and mayor will take the hard approach and pursue my three steps above with the
goal of repealing the GET tax surcharge, hopefully before it's start on January 1, 2018.
Thank you for your time and consideration.
Donald Rudny
P.O. Box 106
28-624 Airstrip Rd.
Pepeekeo, HI 96783
312-209-5870
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