2020-02-18 Letter to Donovan M. Dela Cruz and Gilbert S.C. Keith-Agaran SB 2542, SD1 Relating to the General Excise Tax Exemptions

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�oJ1Tv;os„, ',• Roy Takemoto 1, Managing Director Harry Kim % +:6� �- :,t i* Mayor " "-� °5- ---° Barbara J. Kossow �T•or i+ ►'�=` Deputy Managing Director County of Hawaii Office of the Mayor 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, Hawai'i 96740 (808)323-4444 • Fax(808)323-4440 February 18, 2020 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: SB 2542, SDI Relating to the General Excise Tax Exemptions Thank you for this opportunity to testify on a crucial issue facing our State. "Making Hawai'i a nice place to live" is simple to say, and almost too obvious a goal to highlight, but nevertheless that phrase sums up the most important task facing our elected community leaders. For this reason alone, I want to thank and praise any effort to deal with one of the most critical issues that we must confront, and that is the crisis in our healthcare system caused by our healthcare provider shortage. We are justly proud of the Hawai'i Prepaid Healthcare Act, but how valuable is insurance if you cannot find a provider? How can we expect our people, especially our aging population, to live comfortably, if they believe that quality healthcare is only available if they have the time and ability to travel to the mainland? How can we attract more providers when they realize that they will be expected to work extraordinary hours because there is not a reasonable number of other providers to share the burden? And the ramifications are important, too. To what extent do we limit our primary economic driver, tourism, when visitors are warned "Don't get sick in Hawai'i"? I am not smart enough to know how to entirely solve our provider shortage. However, I am told, and do believe, that eliminating the General Excise Tax on healthcare services would be a very positive step in improving the economics for healthcare providers, thereby encouraging existing providers to stay in practice and enticing new providers to join us. When I describe our situation, I try to use the word "provider" because, in truth, our healthcare crisis goes beyond our physician shortage. For that reason, SB 2542, SD1 is the preferred approach if it is not too expensive, because it would create a general excise tax exemption for medical services provided both by all physicians and by advanced practice registered nurses acting in the capacity of primary care provider. It seems to me that broadening the exemption to APRNs is a sensible way to go, if the State is able to absorb the initial additional loss of revenue ("initial" because most or all of the loss would be offset as the higher earnings of the APRNs are spent and circulate through the community, generating new tax revenue). Please pass SB 2542, SD1, and thank you again for addressing our healthcare dilemma. Re ectfully Submitted, arry Ki�J m T� MAYOR County of Hawaii is an Equal Opportunity Provider and Employer.