(The Center Square) – Hawaii Gov. Josh Green said Friday he would continue with his “Affordability Plan” announced earlier this year.
The governor signed House Bill 954, which would raise the size of the child and dependent care tax credit from $2,400 per one individual to $10,000. The credit increases from $4,800 to $20,000 for two or more taxpayers. The bill also doubled the food excise tax credit from a minimum of $35 to $70 and a maximum of $220 from $110. The earned income tax credit is doubled. The changes are for five years.
“It’s too expensive to live in Hawaii for so many people,” Green said. “Most of that has to do with housing, which we are addressing and which the Senate and House did an excellent job helping us to move the ball forward.”
The bill is a positive step in addressing challenges faced by the “Asset Limited, Income-Constrained, Employed,” known as “Alice,” said Sen. Donovan Dela Cruz.
“By increasing the tax credits for household and dependent care services, refundable income, and income threshold and credit amounts for refundable food and excise tax, HB954 aims to provide much-needed support to working families,” said Dela Cruz, a Democrat.
Green signed a multi-million housing package last week that includes $1 million to expand a rental assistance program for residents 62 and older and another bill that would build low-income housing on state land.
HB 954 provides $104 million in direct income tax relief. But it’s just the first part of his “Affordability Plan,” Green said.
“Over time, we would like to move more toward $250 million in tax breaks, that’s what phase two will look like but this is an excellent start,” Green said.
Green also signed the biennium budget, which includes $10.7 billion in general funds for fiscal year 2024 and $9.8 billion in operating funds for fiscal year 2025. The budget also allocates $19 billion in 2024 and $18.2 billion in 2025 for executive branch departments and agencies for the operating budget.
The governor cut the budget after Hawaii’s revenue projections for fiscal year 2023 fell from 2% to -1% in May. The cuts included a $500 million reduction in the state’s emergency budget reserve in fiscal year 2025. The state would still have $1.5 billion in the fund.
Also gone is $12 million for a new Hawaii Emergency Management Agency headquarters.
Green said he plans to continue to address the state’s housing crisis. An emergency declaration is coming soon, he said.
