50
HOUSE OF REPRESENTATIVES             H.C.R. NO.            
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                                
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                    HOUSE  CONCURRENT 
                        RESOLUTION

REQUESTING THE DEPARTMENT OF BUDGET AND FINANCE, WITH THE
   ASSISTANCE OF THE DEPARTMENT OF BUSINESS, ECONOMIC
   DEVELOPMENT, AND TOURISM, AND THE DEPARTMENT OF TAXATION, TO
   REPORT TO THE LEGISLATURE IN SPECIFIC AND DETAILED MANNER
   THE EFFECT, IF ANY, OF THE INCOME TAX CUTS ADOPTED IN ACT
   157 OF THE NINETEENTH LEGISLATURE, REGULAR SESSION OF 1998,
   HAS HAD ON THE ECONOMY.



 1       WHEREAS, the economy of the State of Hawaii has been
 2   troubled for the past several years; and 
 3   
 4       WHEREAS, in 1998, the Legislature adopted Act 157, which
 5   substantially reduced income tax rates in an effort to spur the
 6   economy; and
 7   
 8       WHEREAS, the Department of Budget and Finance (B&F)
 9   prepares and executes the executive budget of the state
10   government by conducting a systematic and continuous review of
11   the finances, organization, and methods of each department of
12   the State to assist each department in achieving the most
13   effective expenditure of all public funds; and 
14   
15       WHEREAS, B&F having such responsibilities, with the
16   assistance of the Department of Business, Economic Development,
17   and Tourism (DBEDT) is best suited to lead a study on the tax
18   cuts enacted by the 1998 Legislature; and
19   
20       WHEREAS, DBEDT works to support business, create jobs, and
21   improve Hawaii's standard of living through diversifying the
22   economy, expanding existing business, and attracting new
23   economic activity; and
24   
25       WHEREAS, in addition, and perhaps more importantly, DBEDT
26   conducts critical statistical and economic research that is
27   vital to policy makers in determining the best means to regain
28   the State's fiscal revitalization; and

 
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                                  H.C.R. NO.            
                                                            
                                                            



 1       WHEREAS, in turn, the Department of Taxation (DoTAX) is
 2   also ideally suited to assist B&F and DBEDT by generating
 3   necessary state tax data to allow the latter departments to
 4   conduct an economic impact analysis; and
 5   
 6       WHEREAS, there is an immediate need to analyze the economic
 7   and other implications of restructuring the State's tax system
 8   to assist in revitalizing the State's economy; now, therefore,
 9   
10       BE IT RESOLVED by the House of Representatives of the
11   Twentieth Legislature of the State of Hawaii, Regular Session
12   of 2000, the Senate concurring, that B&F, in conjunction with
13   DBEDT and DoTAX, is requested to conduct a study on the
14   economic impacts of Act 157, 1998; and
15   
16       BE IT FURTHER RESOLVED that in the study, B&F is requested
17   to set the areas of focus in the study; and
18   
19       BE IT FURTHER RESOLVED that the study answer the following
20   questions in specific detail:
21   
22       (1)  How much revenue did the State of Hawaii forego and
23            how much will it forego as a direct result of Act 157,
24            1998;
25   
26       (2)  What cuts in programs, agencies, and departments were
27            made because of the reduced income tax rates;
28   
29       (3)  What impact, if any, have the reduced tax rates had on
30            the economy;
31   
32       (4)  What indicators were used to determine the economic
33            impact;
34   
35       (5)  What was the average income tax cut for individuals in
36            the higher, middle, and lower tax brackets;
37   
38       (6)  What was the aggregate income tax cut for the higher,
39            middle, and lower tax brackets;
40   
41       (7)  What percentage of the aggregate tax cut  constitutes
42            the average individual tax cut for the higher, middle,
43            and lower tax brackets;
44   
45       (8)  Was there an increase or a decrease in the State's
46            treasury, and what is the amount of the increase or
47            decrease, and what is the projected increase or
48            decrease as a result of the reduced income tax rate;
49            and

 
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                                  H.C.R. NO.            
                                                            
                                                            



 1       (9)  Any other information that B&F considers to be
 2            appropriate to policy makers; 
 3   and
 4   
 5       BE IT FURTHER RESOLVED that DoTAX is requested to generate
 6   and supply appropriate tax data as may be necessary to B&F to
 7   allow the latter department to conduct its study; and
 8   
 9       BE IT FURTHER RESOLVED that the study be intended for fact-
10   finding and information-gathering purposes; and
11   
12       BE IT FURTHER RESOLVED that DBEDT is requested to consult
13   with the Tax Foundation of Hawaii, and other entities including
14   private and public social service agencies as may be necessary
15   in the course of the DBEDT's study; and
16   
17       BE IT FURTHER RESOLVED that B&F submit its finding to the
18   Legislature no later that twenty days before the convening of
19   the Regular Session of 2001; and
20   
21       BE IT FURTHER RESOLVED that certified copies of this
22   Concurrent Resolution be transmitted to the Governor, the
23   Director of Budget and Finance, the Director of Business,
24   Economic Development, and Tourism, the Director of Taxation,
25   and the Tax Foundation of Hawaii.
26   
27 
28 
29 
30                         OFFERED BY:  ____________________________