Hawai‘i has a new resource to help make better budget and tax policy decisions, coming online at a critical time in light of recent and upcoming events in Washington.
The Hawai‘i Budget Primer serves as a starting point for a new effort to pull together data and information relating to the budget so policy makers, community leaders, and interested citizens can make better informed budget and policy decisions.
Takeaways from the Budget Primer include the following:
- Hawai‘i is last in the nation in terms of percentage of our state budget that comes from federal sources, suggesting that Hawai‘i may have an opportunity to attract more federal dollars to support state programs.
- State government spending accounts for 20 percent of the gross state product (GSP). In combination with county budgets, 26 percent of the GSP comes from Hawai‘i-based government.
- Hawai‘i residents with the lowest incomes pay almost twice as much of their earnings to state taxes than people with the highest incomes.
- The state’s biggest source of tax revenue is the general excise tax. The GET appears to be deceptively modest (4 to 4.5 percent) if seen as a sales tax but, because it’s an excise tax applied to virtually every transaction, the multiplied effect would equal a sales tax of 10 to 11 percent.
- Hawai‘i’s property taxes, which are collected at the county level only, are at the lowest rates in the country.
Nineteen years ago, in advance of the July 4th celebration of the birth of our nation, Keystone Research Center issued a report on “Democracy in Pennsylvania.” The report put two well-known facts next to one another: the gap between the haves and have-nots and the importance of money in politics. It raised the question: could the interaction of economic inequality and the increasing importance of money in politics threaten Pennsylvania’s democratic ideals? Does money in politics and the growing concentration of income and wealth block policymakers from enacting public policies that address the needs and concerns of middle- and lower-income Pennsylvanians? Are we at risk of replacing democracy of, by, and for the people with a political system responsive primarily to an economic elite dominated by big corporations and narrowly self-interested donors?
This year, we revisit these basic questions with the futures of America’s, and Pennsylvania’s, democracies hanging even more in the balance. Today, the income and wealth gap between the haves and the have-nots yawn even wider and the importance of money in politics has grown inexorably. More so in Pennsylvania than most states, these trends have been coupled with an unprecedented effort by the majority party in the state legislature — the party most allied with big corporations and the 1% — to draw legislative district lines that establish and help maintain political power beyond the majority party’s level of voter support. It has also been accompanied by efforts to enact laws (e.g., the Voter ID law rejected by the Pennsylvania courts) that would further erode turnout among low-income people and lawmakers’ responsiveness to working families.