Unemployment Insurance Tax Relief Bill Passes House Labor Committee; However

On January 26, more than 100 members from the business community statewide submitted testimony on HB 2169, a bill that would mitigate the huge unemployment insurance tax increase set to take place in April if no law is passed. The measure was heard in the House Labor Committee, chaired by Karl Rhoads (District 28). We support and appreciate the efforts of this committee and believe HB 2169 is the first step in addressing an unprecendented tax increase.  

The Chamber testified in support of HB 2169 with amendments to conform with the Chamber's version, HB 2201 (Chamber testimony). The Chamber believes that HB 2169, as amended by the Committee, provides relief in 2010 but does not provide enough assistance to help reduce the "tax shock" and safeguard jobs. 

The Chamber urges extension of the 90% Taxable Wage Base and lowering the Tax Rate Schedule in 2011. The Chamber's amendment would save an employer on average $320 more per employee in 2011 compared to HB 2169. The total tax savings would be $92 million more in 2011 than HB 2169 and additional interest on borrowed federal funds of no more than $7.50 per employee in 2012.  

The Chamber's proposal mitigates the tax increase and HB 2169 currently just defers it to 2011 when the average rate would double from $630 to $1290 per employee.  No amendments to reduce this would be possible in 2011 because the State would have monies borrowed from the federal government.  This is the one chance Hawaii employers have to mitigate the tax burden caused by the global recession.       

The Committee passed the bill with amendments. However, not with the Chamber's language. The measure was amended to:

• Change the adequate reserve multiplier from 1.5 to 1.25.
• Require DLIR to evaluate the tax rates on a semi-annual basis beginning in 2012.
• Permanently increase the unemployment benefit payout to 75%. 

Approximately 2,000 Bills Introduced This Session

The Chamber's Business Advocacy Department has reviewed all the bills that were introduced this session. Measures ranged from minimum wage increases, sick leave, environmental impact statement statutory changes, to tax increases.

The Chamber will actively track approximately 200 bills this session. The bills will be posted on www.cocaction.com next week.

More Than 45 People Turned Out For The First "Walk Around" at the State Capitol

On January 21, the Chamber held its first "Walk Around" of the legislative session at the State Capitol. More than 45 members from the business community statewide participated in this event. The group met with Senate President Colleen Hanabusa, Vice Speaker Michael Magaoay and various senators and representatives to talk about unemployment insurance and other issues.

Thank you to the following organizations for being a part of this event: NFIB, HADA, HCIA, Hong Kong China Hawaii Chamber, and Kailua Chamber. Special mahalo to the Kauai, Maui, Kona-Kohala, Hawaii Island Chamber of Commerces, Kauai Farm Bureau and Kauai Hotel and Lodging Association for flying over to participate in this event.  

Click here for Pacific Business News coverage on the event.