Newswatch
The Senate's position, said Ways and Means Co-Chairwoman Lehua Fernandes Salling (D, Kapaa), is based on: the need to generate more state revenue and to curb smoking by adolescents.
The Senate wants to raise the tax of a 20-count pack of cigarettes from 60 cents to $1.10, while the House prefers to raise the tax to 70 cents and eventually to 80 cents.
Currently, the cigarette tax adds $37.8 million annually to state coffers, said Tax Director Ray Kamikawa, who backs the Senate's higher tax increase.
The Senate proposal is estimated to generate between $3 million and $5 million in additional cigarette tax revenue, he added.
The estimated revenue from the House proposal is less than $3 million, Kamikawa said.
While convinced that the House cigarette tax hike is inadequate, Fernandes Salling and her fellow money committee co-chairwoman, Sen. Carol Fukunaga (D, Makiki), are intrigued by other aspects of the House's position.
What caught their attention is the House's effort to identify cigarettes exempt from state tax that are sold on military bases, prevent their resale and penalize violators.
In their bill, House members are advocating a maximum fine of $25,000 or a maximum jail sentence of one year for anyone who resells tax-exempt cigarettes.
"Each tax-exempt pack of cigarettes that is resold shall be considered a separate violation," the House bill states.
Fernandes Salling and Fukunaga said their panel will act on the House bill Friday.
Before the Ways and Means Committee yesterday, Lowell Kalapa, executive director of the Tax Foundation of Hawaii, said cigarette sales on isle military installations account for about 30 percent of annual sales in Hawaii, but military personnel make up less than 9 percent of the population.
"Either those in the military smoke 24 hours a day or the product is being purchased for resale or consumption by the civilian market," Kalapa said.
Kalapa, however, cautioned that if lawmakers raise the cigarette tax too high, the move would lower consumption and also push down tax revenue.
Norman Suzuki, a lobbyist for the Tobacco Institute, said the House proposal "is a significant increase for cigarette smokers during a time when the economy of the state is stagnant."
But Dr. Elizabeth Tam, a board member of the American Heart Association's Hawaii affiliate, said: "Higher tobacco taxes will substantially reduce smoking rates, especially among the critical, and illegal, teen-age market."
Hawaii's four mayors used that argument yesterday in calling for the Senate to reject the Cayetano administration's proposal to slash a major chunk of their share of hotel taxes and replace them with slower-growing revenues.
Honolulu Mayor Jeremy Harris suggested the state has $200 million in unreserved-undesignated general fund money. That could be used to help pay off the center, thus eliminating the need to take back transient accommodation taxes from the counties, he said.
The money is owed to the state by the end of the year, but uncollected, Anzai said. "It's not just sitting there as an unappropriated amount like they claim," he said.
"That, however, does not mean that money is unappropriated or not spoken for," he added. "All of that money is part of the financial plan for il,6p,6p fiscal '97."
But city Budget Director Malcolm Tom stands by the counties' story. "The fact of the matter is that the increased reserves are not budgeted, not xxx appropriated in the same manner that the payroll lag is not appropriated," Tom said.
Anzai also disputes the contention that the state underbudgeted the cost of the $350 million convention center.
Of the 6 percent transient accommodations tax, 5 percent goes to the counties, 1 percent to the state.
"In hindsight now, it seems like the state should never have given the total amount," Anzai said. "It should've withheld a certain percentage, built up the reserves and kept it and nobody would have complained."
The bottom line, he said, is "it doesn't pay to be generous."
Under the state proposal, the counties' revenues from the hotel room tax would be replaced with public utilities taxes and uncontested traffic fines and forfeitures.
Anzai said contrary to what was said by the mayors yesterday, both those sources do rise steadily each year.
Public utilities tax revenue is based on a percentage of earnings, he said, "and traffic fines presumably go up every year."
Anzai acknowledged, however, that "right now" both sources grow at a slower rate than TAT.
Tom said: "Parking fines and forfeiture revenues have been declining. And from a policy standpoint, we don't believe that traffic fines and forfeitures should be used to balance the budget."
"He is not a 'deadbeat dad,'" they wrote in a letter to U.S. District Judge Alan Kay, asking Kay to suspend punishment. "Our father has always been a great support from school to sports. When we needed someone to talk to, he was always there."
But Kay yesterday sentenced Dubin to three years of probation, 250 hours of community service, five months of home detention with electronic monitoring and one year of supervision.
"The 250 hours of community service is to impress on you the seriousness of the offense," Kay said.
Based on a plea agreement, prosecutors had asked for five years probation, 10 months of home detention, a $20,000 fine and 250 hours of community service a year for five years.
"This is more of a political assassination than a real case of failing to pay child support," Dubin said as he left the courtroom with his children. "The government was looking for a high-profile person to make a point."
Dubin, a former Maui obstetrician and gynecologist who has moved to Nevada, pleaded guilty last year to failing to pay $38,140 in child support for a year beginning October 1993.
Calls started trickling in from Waiawa Road, Lehua Avenue, lower Waimano Home Road and a section of Kamehameha Highway near the Pearl City Shopping Center after power went out about 5 a.m.
It was restored at 5:40 a.m., a trouble dispatcher said.
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