House Republicans have their largest contingent since before statehood, and they have their collective eye on cutting taxes.
Mindy Jaffe, the incoming Republican representing Waikiki, Kaimuki and Diamond Head in the state House of Representatives, has a new favorite number. It’s 19, the numeral assigned to the representative’s district, but also, maybe more importantly, the total number of Republicans in the House. That is the most the GOP has had since before statehood, and while 19 members are still no match for the Democrats who still control 32 seats, the new number gives the Republicans enough votes to ensure that their bills aren’t killed prematurely. It is, for the GOP, a new morning at the State Capitol.
“We gained seven seats this last election, the most we have ever picked up,” says an energetic Jaffe. “While we still don’t have a majority, our new numbers gives us a little clout.”
Jaffe, a former magazine publisher who grew frustrated with the over taxation and over regulation that made it difficult to grow her business, sold her company last year and ran for office. One of her primary missions has been to help bring relief to the state’s small business people, and she sees the election of 2000 as perhaps Hawaii’s most significant in a long time.
So what do the Republicans hope to do with their newfound legislative muscle? According to new House minority leader Galen Fox, the caucus isn’t going to bite off more than it can chew. It will focus on a few key issues that have the support of the majority of the general public. One of the issues heard universally by the lawmakers during the campaign was tax relief, specifically ending the state’s General Excise Tax on food and medical services.
“I can assure you that getting rid of those taxes will be the priority. Reducing the size of government is also a priority but nearly all our Republicans ran on the platform against the taxes on food and medical services that I can say with certainly that we will be working to eliminate them.”
“We’d also like to see the de-pyramiding of the General Excise Tax accelerated and see some tax credits and incentives that are not selective but across the board for small business,” says Jaffe. “But that will be harder to do in one session. If we can get rid of the G.E.T. on food and medical services this year that will make for a successful session.”
Republicans may have a fight on their hands. House Speaker Calvin Say believes the rescinding tax will break the state’s bank, especially with state worker pay raises on the horizon. “It’s going to be a fight,” says Say. “How are we going to make up for the loss of revenues? It is unrealistic financially but we will look at it and I will discuss it with them. But in all fairness and honesty, we just can’t do it.”
Instead, in this year’s session, Say plans to introduce a tax cut of his own: a 4 percent tax break for biotechnology industries and public utilities. He believes that the tax breaks will offer the state a more immediate and longer-lasting boost without emptying the state’s coffers.
“We don’t see new developments on the horizon for the tourist industry,” says Say. “So we have to renew and rebuild what we have to keep our tourist product fresh. If we are really serious about making Hawaii a place you can do business then we have to make it possible for people to stay connected when they are visiting.”
In regard to the Republicans’ increased numbers in the House, the Speaker is unfazed. I can work with all of them,” says Say. “However, it does make my job tougher because I have to educate and unify my side but, to be honest, I’ve had tougher sessions. In 2002 we have reapportionment and that changes everything anyway.”
But that is exactly what gets newcomers such as Jaffe excited.
“Every single seat is open in 2002 and that’s thrilling,” says Jaffe. “This session and getting rid of the G.E.T. on food and medical services may be the litmus test for what we can do in the future. Yes, everything will change.”