Rep. Mina Morita's Blog

Barrel Tax Passes Legislature

Posted in Clean Energy,Environmental Protection,Legislation/Capitol,Sustainability by Mina Morita on April 14, 2010

Here is my floor speech on the barrel tax which passed the Senate by a vote of 16 ayes, 2 ayes with reservations and 7 noes, and the House with 37 ayes, 11 noes and 3 members excused.  The bill now moves to the Governor for her approval or veto within the next ten days.  Should she veto the bill, the Legislature must override by the end of session (April 29).  Although I am disappointed that not all of the $1.00 tax increase is dedicated to the energy and agriculture special funds, many of existing energy and agriculture programs are still appropriated out of the general fund like the agricultural inspectors and the renewable energy tax credits.  While I had hoped that this tax increase would be used to accelerate energy and food security implementation, unfortunately, the State’s core government programs need to be funded.  The language of House Bill 2421 does call for the allocation of the tax to be reviewed each year.

Mr. Speaker, in the parlance of the Representative from Hawaii Kai, non-support of this measure is economic development and job killer number one.  This bill should not be viewed as a tax but a retention fee.  A retention fee to reduce the over $8 billion dollars each year we ship offshore to pay for our imported fuel and food. 

            One year ago when we voted on a similar measure which was House Bill 1271, where all the funding was dedicated to energy and food security, we were recovering from a oil price spike which peaked at $145.29 per barrel on July 4, 2008.  When we took that vote oil prices hovered at about $51.00 per barrel.  Today the price of crude oil is at $86.00 per barrel, the past 52-week pricing ranged from $44.45 to $86.42 per barrel and the one year forecast is projected at $99.00 per barrel. 

            As the global economy improves and demand increases the oil pricing trajectory is upwards.  Mr. Speaker, as politicians, we can all agree that there is never a good time to raise taxes.  It is very easy, especially in an election year, to chant “no new taxes”.  During a time of recession we question ourselves about the wisdom of raising taxes.  However, Mr. Speaker, in dealing with energy issues the window of opportunity for Hawaii is limited and getting smaller each day and it’s going to cost money.  If we want to put our energy and food security strategies into action and implementation we have to pay for it somehow.  Doing nothing is not an option, not if we call ourselves leaders.

            As an isolated archipelago, we are vulnerable to fuel and food supply disruptions and global forces beyond our control.  A transition to a clean energy economy and a strategy to reduce both our fuel and food imports, which is funded through this tax increase, puts Hawaii’s destiny more under our control.  It will take a long term planning, a smart strategy, public-private partnerships, the infusion of new technology, smart investments and political will to achieve this strategy.  However, we can only achieve this strategy with political will and putting our money where our mouth is.

            Mr. Speaker, the economic development opportunities are in the energy, agriculture, health and education sectors.  However, the energy sector is the bedrock of our economy.  Stable, predictable energy pricing is a major factor that affects each sector of our economy and offers an opportunity for economic growth.  Moreover, Mr. Speaker, the energy sector moves hand in hand with the information technology and communications as technological integration require software and communications support.

            Hawaii should be the center of research and development, technology validation and integration for a clean energy economy transformation.  But we can only be taken seriously and achieve these goals if we, as the leaders, residents and businesses of this State, make the needed long-term commitment and investment by putting our money where our mouth is.

            Colleagues, don’t be pennywise and pound foolish on this measure.  Mr. Speaker, the reality is that if this bill does not pass, when the ARRA funds run out DBEDT’s Energy Division will not have the funds for staff to drive the Hawaii Clean Energy Initiative next year.  The State will not have any funds available to cost share any Department of Energy awards which will limit our ability to compete for federal funding and the agricultural sector will continue to limp along with further declining resources.

            Mr. Speaker, if this bill does not pass what I fear the most is that clean, renewable energy and energy efficiency will only be available to those who can afford to make the transition.  As the cost of fossil fuels rise it will be those who can least afford rising energy costs that will ultimately bear the burden of maintaining an antiquated electricity and transportation infrastructure.  One of the key objectives of the Hawaii Clean Energy Initiative is grounded in social and economic justice; that is we provide for a strategy that moves our entire community forward to secure the benefits of a clean energy economy and food security transformation for each person and business throughout Hawaii.  Mr. Speaker the tax is broad based, a burden shared by all and a tax that can be easily offset by efficiency and conservation measures.

            Mr. Speaker, I will put this bluntly because I know of no other way to describe this situation.  When the Lingle Administration leaves office, the ARRA monies allocated for energy and the petroleum violation trust fund, which has supported the Energy Division for several decades, will be depleted and sucked dried.  In dealing with critical issues like energy and food security, these are long-term strategies that cannot be planned or implemented by election cycles or by a single person’s action for a large scale transformation to occur.  We all have an on-going but important role to play in this endeavor.

            Mr. Speaker and colleagues, today we have the opportunity to look our children and grandchildren in the eye and say I voted in favor of bill that will change the course of Hawaii’s destiny by working to reduce Hawaii’s dependency on imported fuel and food.  I voted to put my money where my mouth is and supported a tax increase to ensure energy and food security for Hawaii despite my fear of how voters will react in the fall elections because it is the right thing to do for the future of Hawaii.  And, that I am a Leader in this State in helping to achieve energy and food security for a healthy, safe and prosperous future for our families and businesses.


One Response to 'Barrel Tax Passes Legislature'

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  1. Kauaibrad said,

    Nice speech. You make the points for this well.

    I might offer an observation. The arguments for this barrel tax seem to take it as a GIVEN that all or most in the business community and economy share the belief that we need to change, i.e. reduce, the percentage of how much energy, goods and food that we import.

    The thing is, I almost never hear the hotel industry, visitor industry, or business persons in general saying this. I wonder if this needs to be reviewed and a true consensus established on this, because the silence from the business community is deafening, and I sense that for whatever reason they do not agree that Hawaii needs to dramatically reduce it’s imports of energy and food items. I think it is logical that we do need to reduce them, but I seldom hear that coming from the private sector.

    If this whole initiative is to really move forward, then that consensus needs to be truly established.

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