Hawaiʻi legislature 2022: smart spending could help big problems

To begin to remedy those problems, House members including Finance Committee Chair Sylvia Luke want to revive at least some elements of a package of bills lawmakers proposed in 2020, just before the pandemic hit and state tax collections collapsed.

Those ideas include increasing the very modest food and rent tax credits for low-income families, and creating a refundable state earned income tax credit that would put some additional money in the pockets of working families.

Lawmakers said in 2020 they planned to structure the EITC to offer help to about 90,000 Hawaiʻi taxpayers, a step that social services advocates have urged lawmakers to take for years. Appleseed estimates making the earned income tax credit refundable would cost the state an extra $20 million per year.

Top lawmakers in 2020 also planned to sweeten the tax credit for food purchases, increasing the annual credit to $150 per person for each household earning less than $50,000 per year.

That credit was originally designed to offset the impact of the state excise tax on food, and currently ranges from $110 per person for Hawaiʻi’s poorest households to $35 per person for families making $40,000 to $50,000 per year. It is still unclear exactly what changes to the food tax credit may be in the works this year.