» » » Quest for Affordable Housing Disingenuous

Quest for Affordable Housing Disingenuous

posted in: Weekly Commentary 0
By Lowell L. Kalapa

During the past weeks of the legislative session which is about to adjourn, the complaint is that Hawaii’s families, now and in the future, are being priced out of living in Hawaii.
In particular, we have heard lawmakers, as well as the governor, bemoan the high cost of living in Hawaii and in particular the high cost of housing. We have read stories where young couples find that they have to save even more to purchase their first home because they don’t have enough for the down payment even with the historically low interest rates. Others have resigned themselves to staying on the mainland after finishing college because it is just too expensive to return to the land of their roots.
On the other side, promoters have told lawmakers of the need to have some sort of tax incentive, be it credits or exemptions, to make their projects work. From motor raceway parks to hotel construction and renovations tax credits, proposals were everywhere during the session. Even farmers got into the act asking for tax credits for agriculture infrastructure and water mitigation projects. Then there were the police officers who wanted tax relief by completely exempting their compensation from the state income tax.
Luckily, most of these give-aways were left on the cutting room floor, but what emerged seems so incongruent with the messages that lawmakers seem to want constituents to hear. Instead of lowering the cost of living, elected officials at all levels – federal, state, and county – are pushing to raise the general excise tax which, in turn, will do nothing but increase the cost of living in Hawaii.
The increase is being “sold” on the premise that it is needed to fund traffic gridlock relief for Honolulu and provide transportation improvements on the Neighbor Islands. It is being pushed because our congressional delegation doesn’t want to be “embarrassed” in requesting federal funding only to have the local government “back out” at the last minute. At the state and local level, the push for the transit system in Honolulu is being rationalized as the “only” solution for traffic gridlock.
And through this all, not one word has been said about the fact that there is no plan on the table as to what this traffic solution for Honolulu will look like. The terms light rail, rapid transit, fixed rail are being bantered about as if they are some sort of magic elixir that will solve Honolulu’s traffic woes. Yet students of transit know that these systems are mutually exclusive, with one looking vastly different from the other.
There has been talk of the line running from Kapolei to Iwilei, yet there has yet to be a map of the route line or for that matter where the stations will be. Without knowing where the line will run or the location of the stations, it is nearly impossible to guess the cost of the land that will be needed. Will the project require paying $100 or $500 a square foot for the land under the stations let alone the cost per square foot to build the station? Indeed, the taxpayer has no idea of what technology will be employed be it heavy rail like the Metro system in Washington, D.C. or the newest technology of Mag-lev being tried out in the new Nagoya line.
What taxpayers, and especially businesses, know is that raising the general excise tax will increase prices of everything consumed in the state. Because business-to-business transactions are taxed, the cost of the tax at the retail rate will be folded into the operating costs of businesses and tacked on the goods and services sold by businesses. And as we have heard time and time again, businesses don’t pay taxes, only people pay taxes. The cost of all taxes, including the general excise tax, has to be recouped by the business if that business wants to stick around in business next year.
So, instead of making Hawaii a more affordable place to live, elected officials have decided that traffic is all that high of a priority because they will just merely raise the general excise tax rate to get the money to pay for some sort of transit system. If it is of such a high priority, knowing that Hawaii is not only a highly taxed state but also an expensive place to live and do business, those elected officials should take it out of the existing resources of federal, state and local government.
So much for all this talk about making housing more affordable, about attracting our brightest and best to come back to Hawaii, or about creating high paying jobs for everyone. No, our elected officials have decided to turn up the tax heat even more. Solving Honolulu’s traffic does not need a tax increase, it just needs some creativity and ingenuity, something which appears to be lacking in our elected officials.

Print Friendly, PDF & Email

Leave a Reply