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Hawaii lawmakers hear broad testimony on proposal to pause future income tax cuts
Summary
The House Finance Committee heard hours of testimony on HB2306, a governor-backed bill to pause scheduled future income tax reductions and redirect revenue toward social services and targeted credits for low- and middle-income households. Supporters say the pause would stabilize the budget; opponents call the measure premature and urged alternatives to raising revenue.
The House Finance Committee heard extensive testimony March 3 on HB2306, the governor's proposal to pause scheduled out-year income tax cuts. Administration witness Will Kane told the committee the change would recover interior revenue lost to federal-level shifts and could return roughly $1.8 billion to the state treasury over a multi-year window while preserving targeted credits for low-income and working families. "We took a measured approach to pausing the out years of the tax cuts," Kane said in opening remarks, adding that the proposal would preserve the tax relief already in effect.
Advocates from Catholic Charities Hawaii, Hawaii Public Health Institute and the Hawaii Appleseed Center for Law and Economic Justice urged the committee to pass the bill. Nate Hicks of the Hawaii Public Health Institute argued that the state's safety-net programs face risks as federal funding declines, and said the proposal would shift revenue toward affordable housing, child care, and food assistance. "When we talk about people struggling to make ends meet, it's absolutely important that we invest in making Hawaii more affordable," Hicks told lawmakers.
Business and free-market groups, however, urged caution. The Hawaii Food Industry Association and the Grassroot Institute warned the committee that pausing cuts would make the state less competitive and urged structural reforms and internal spending reductions instead. The Tax Foundation offered technical warnings about how the bill is written and suggested clearer drafting to ensure it pauses out-year schedules rather than eliminating them outright.
Department of Taxation deputy director Kristen Sakamoto testified in support but also volunteered to help clarify technical language. The committee reserved decision on the measure for later consideration.
The bill drew substantial public testimony, including from students, nonprofit leaders and labor advocates. Testimony focused on the bill's distributional effects, the question of whether a pause should be temporary, and alternatives such as one-time adjustments to exemptions or targeted revenue increases. The committee indicated it will continue to weigh revenue estimates and drafting options before taking a vote.
