Joe Kent, executive president of the Grassroot Institute of Hawaii, and Ted Kefalas, Grassroot’s director of strategic campaigns, joined Rick Hamada on KHVH radio May 4 to discuss the state Legislature’s final days and reflect on a challenging session dominated by defensive battles against tax increases and budget concerns.
Kent characterized this year’s legislative session as primarily defensive work, explaining that “most of our wins have been defensive, sometimes I feel like we’re a goalie playing soccer and there’s like a million balls headed our way.” He said that defensive work centered on successfully advocating against numerous tax-hike proposals, including capital gains and conveyance tax hikes, a wealth tax and the governor’s plan to walk back the income tax cut plan he signed into law in 2024.
Regarding the governor’s proposal to cancel the remaining planned tax cuts, Kent explained that “the governor and all of the budget wonks were looking at the numbers and saw that over the next five years, they would be $1.8 billion short, and so their solution to this was to pause the income tax cuts that would have gradually been implemented year after year.”
Instead, Kent said House and Senate lawmakers have agreed on a bill that will keep the tax cuts in place for lower- and middle-incomes, “pause” the remaining cuts for higher incomes and increase taxes on extremely high incomes. K ,-loo
The trio also discussed Hawaii’s budget crisis, with Kent and Kefalas calling for budget cuts rather than tax increases, and Kefalas pointing out that “the default in Hawaii a lot of times is just increase taxes.”
Kefalas also noted that budget cuts can be implemented without sacrificing essential services.
“There’s a lot of bloat in the budget,” he said. “So I think that there’s an opportunity, and this is really the right time to look at that. Because if we don’t look at cutting during times when we need to, we’re never going to do it.”
Kent suggested that the governor could implement cuts by imposing budget restrictions on state departments or using his line-item veto power, while Kefalas emphasized the perceived disconnect between Hawaii’s high tax burden and the quality of services residents receive, noting that “for the amount that we pay, we should have world-class schools. We should have roads that are freshly paved.”
Other topics of conversation included the ongoing corruption investigation of Lieutenant Governor Sylvia Luke, election integrity, cost of living concerns, the state’s unfunded pension liabilities and the appointment of a new state Supreme Court Chief Justice with union ties.
Kent highlighted how union-aligned laws prevent counties from using private sector workers, contributing to budget inefficiencies and service delays.
“So many things are [in the budget] that could be so much cheaper if it wasn’t for a lot of these union laws that keep things in place,” he said.
Click on the image below to listen to the 40-minute conversation.
