Gov. David Ige ponders higher fuel and wealth taxes

But tax increases are likely going to be considered by state lawmakers regardless of whether Ige includes such proposals in his detailed budget plan.

Rep. Amy Perruso (D, Wahiawā–Whitmore–Poamoho) said she plans to introduce a bill that would increase the state income tax rate on Hawaiʻi residents with high incomes.

A similar measure that passed the House Finance Committee last year but was not heard by a Senate committee would have raised about $60 million annually, according to a state tax department assessment.

Higher rates in last year’s bill, House Bill 2385, ranged from 9 percent for individuals with annual incomes over $100,000 up to 13 percent for individuals earning more than $300,000.

“Our intention is to provide alternatives to austerity measures (such as furloughs or layoffs),” Perruso, a House Finance Committee member, said in an interview.

Ige originally proposed furloughs for thousands of state employees that had been scheduled to begin Jan. 1 but are now postponed until July, when the next fiscal year begins.

Other means for increasing state revenue advocated by Perruso include suspending general excise tax exemptions for four years, reducing the estate tax exemption, creating a property tax surcharge on homes valued over $2 million to help pay for public schools and increasing the state’s fuel tax.

“It’s not only an opportunity for raising revenue; it’s about using taxes to eliminate the gap between the rich and poor,” she said. “We can do both things at once.”