Let’s flash back to the before times. The ancient and nearly forgotten era of late 2019 and early 2020.
In what feels like a lifetime ago, we were all making/breaking New Year’s Resolutions and watching “The Witcher.” We scheduled time off for travel, planned birthday parties and bought tickets to a music festival that we dreamed about attending.
We got ready for May Day by the Bay, Merrie Monarch, Punahou Carnival and Maui Matsuri Festival. We went to Char Hung Sut, Anna O’Brian’s, Dillingham Saimin, Da Kitchen in Kahului and Kihei, Captain Cook Baking, Holuakoa Gardens and Cafe, Kalaheo Steak & Ribs.
And then COVID-19 hit. We lost time with each other, we lost work and we lost family. We all lost some. Some lost all.
It goes without saying that the torrent of COVID-19 has rocked our world to its very foundations. But we’re not all in the same boat. We’re all in the same storm.
Some have already made it to shore. Some boats are more equipped to weather hurricanes of this size. But that’s not the case for most of us. Many are up to their necks in debt and are drowning as we speak. Without action from the state Legislature, they’ll go under completely.
Working families are hanging on by the barest of threads and need relief immediately. Public and private sector workers who’ve been laid off or furloughed are dependent on unemployment insurance. They’re being forced to make hard decisions balancing health care, food and rent or mortgage.
If nothing is done to offset this imbalance, the result will be disastrous for our communities.
SB 614 and HB 26, both now before the Legislature, would exempt state unemployment benefits from income tax.
Flickr: Chris Potter
Local working families have been devastated by the pandemic. According to the Bureau of Labor Statistics’ Local Area Unemployment Statistics program, Hawaii has endured the highest unemployment rate of the 50 states and D.C. since September 2020 (we tied with Nevada in November 2020).
Hawaii workers filed more than 580,000 unemployment claims in 2020.
At the onset of the pandemic, the state unemployment office was overwhelmed by the deluge of new claimants and had to process them using an antiquated mainframe system. And while a historic number of Hawaii residents have filed for UI, pressure is mounting as many claimants have not been able to get their claims processed for weeks.
Think the biggest hurdle to unemployment insurance is getting your claim processed? Think again.
If 2020 was the first time you’ve ever filed for unemployment, you might be in for a big surprise when tax season comes around. In Hawaii, unemployment insurance is taxed as income. And if, like many others, you didn’t take the option to withhold tax on the front end, you may be on the hook for it in April.
Thousands of unemployed workers in Hawaii have drained their checking and savings accounts, lost their health insurance and are on the verge of eviction. SB 614 (and its companion bill HB 26) provides an opportunity to turn the tide of this communally endured economic hardship.
Making groceries exempt from taxes would help working class families in Hawaii, the authors write.
Claire Caulfield/Civil Beat
SB 614 retroactively “exempts from state income tax, unemployment compensation received from March 1, 2020, to December 31, 2020. Requires the department of taxation to retroactively refund state income tax deducted and withheld from individuals for unemployment compensation during that time period.”
The UI income tax relief bill will save unemployed workers who are struggling financially and help stimulate the local economy. This is a win for workers and local businesses.
But this alone is not enough. According to a study by the Missouri Economic Research and Information Center, in the fourth quarter of 2020, Hawaii had the highest cost of living in the nation with an index of 199.1. Hawaii is one of only seven states that fully taxes groceries, which disproportionately affects lower-income families.
SB 608 (and its companion bill HB 27) would exempt over-the-counter drugs and groceries that typically qualify for SNAP and WIC from the General Excise Tax and could provide a boost to working families that are struggling to put food on the table.
Grocery workers are seeing families not able to buy milk, bread and other necessities. Relief from the GET on groceries would put food in the mouths of children, kupuna and ohana.
If the state exempts the regressive GET on groceries, working families could save more than $500 a year and spend the additional money elsewhere in the economy. This is a win for working families and a win for many businesses throughout Hawaii. Currently 32 states plus the District of Columbia exempt their groceries from sales tax.
We are the aloha state. To truly live up to that name, we need to protect the backbone of our economy — our local working families in the public and private sector — by providing the relief they so desperately need. Call your state legislators today to make sure that these bills and your voice are heard.
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February 15, 2021 at 05:12PM
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Hawaii Workers Need Immediate Economic Relief - Honolulu Civil Beat
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