STAND. COM. REP. NO. 2342

Honolulu, Hawaii

RE: S.B. No. 2261

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Education, to which was referred S.B. No. 2261 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Provide an income tax exclusion for certain public school teachers who earn $60,000 or less per year; and

(2) Define eligible teachers as school teachers, special education teachers, school librarians and school counselors employed by the DOE or a charter school.

Your Committee received testimony in support of this measure from the Department of Taxation, State Public Charter School Commission, an individual member of Maui County Council, Hawaii Teacher Standards Board, Democratic Party of Hawaii Education Caucus, Hawaii State Teachers Association, and Kamehameha Schools.

Your Committee received comments on this measure from the Office of the Auditor, Hawaii Government Employees Association, and Tax Foundation of Hawaii.

Your Committee finds that research has shown time and time again that a quality teacher is essential to quality student learning. Approximately ten percent of the State's teachers switch schools, relocate, or leave the profession each year. Only fifty to sixty percent of current teachers have been at their school for five years or more. Chronic teacher turnover has led to more than 1,000 teacher vacancies throughout the State year after year, forcing the Department of Education to rely on unlicensed teachers such as emergency hires and substitute teachers to provide classroom instruction. This measure is part of the ongoing effort to address the chronic teacher shortage.

Your Committee further finds that that the Office of the Auditor will evaluate the tax exclusion for effectiveness based on any correlating increase in the retention or attracting of highly-qualified teachers. Your Committee directs the Department of Taxation and Department of Education to provide the Office of the Auditor with any information they may need to determine whether or not the tax exclusion is fulfilling its intended purposes.

Your Committee has amended this measure by:

(1) Amending "taxpayer" to "person";

(2) Clarifying that the tax exclusion is only for an eligible teacher as that term is defined in the measure; and

(3) Restricting eligibility for the tax exclusion at a maximum of $120,000 per household if filing jointly with only one eligible teacher.

As affirmed by the record of votes of the members of your Committee on Education that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2261, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2261, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Education,

________________________________

MICHELLE N. KIDANI, Chair