Ige Signs Minimum Wage Increase, Tax Rebate Bills
Gov. David Ige on Wednesday, June 22, signed into law two measures passed by the state Legislature earlier this year that will help Hawai‘i’s working families and individuals.
Ige signed House Bill 2510, regarding the state’s minimum wage, and Senate Bill 514, dealing with refunds to the state’s taxpayers, during a live ceremony at the state Capitol in Honolulu.
“I’m excited to be able to sign two bills that are really focused on helping working families and the people who need the help the most,” Ige said during the ceremony, adding that he appreciates the commitment and leadership of legislators to support the state’s most vulnerable residents in a real way.
The governor said the state’s families have experienced many challenges during the COVID-19 pandemic, never imagining the demands and burdens they would face as the pandemic wore on.
“I do believe that the measures we’re signing today can make a significant impact and help families in a tangible way, especially our working families,” Ige said.
HB2510 increases the state’s minimum wage for the first time since 2018, from $10.10 per hour to $12 per hour starting Oct. 1. The minimum wage will increase to $14 per hour starting Jan. 1, 2024, $16 an hour starting Jan. 1, 2026, and to $18 on Jan. 1, 2028.
The last increase to the state’s minimum wage was in 2018, when it was raised to the current $10.10 per hour thanks to legislation approved in 2014. Ige said Wednesday that another increase was long overdue. About 190,000 workers in Hawai‘i earn minimum wage.
“So raising the minimum wage will be helping those individuals earn more income so they can pay for essentials — food, housing, shelter and other necessary expenses,” the governor said.
He also expects to see boost in state’s overall economy because of the increase, saying many of those who earn minimum wage are living paycheck to paycheck and will certainly be spending the additional funds they make from the increase, putting them back into the economy, which will also help create more jobs.
HB2510 also makes the earned income tax credit permanent and refundable.
“This will increase income for working families and lead to greater stability in the workforce,” Ige said during the signing ceremony about the earned income tax credit move. “This is also much needed support for our community.”
“This is a happy day for me, as we are finally able to put in place increases to our minimum wage after four years of effort,” said state Sen. Brian Taniguchi, who spoke Wednesday during the signing ceremony. He added after thanking the many people involved in getting the measure passed, “Let’s all celebrate this great bill.”
Rep. Sylvia Luke also spoke during the ceremony and thanked everyone who patiently worked on the minimum wage issue for many years. She said coupling an increase to minimum wage with changes to the earned income tax credit is fundamental to helping the state’s working families.
“And to make (the earned income tax credit) refundable and to make it permanent, it provides hope for many of the people who are working to just make ends meet,” Luke said.
SB514 provides a tax refund of $300 for individuals earning less than $100,000 a year and couples earning less than $200,000, and $100 for taxpayers who earn $100,000 or more and couples earning $200,000 or more a year.
The state Department of Taxation anticipates it will begin issuing the tax refunds during the last week of August and will provide additional details in the coming days.
“I’m glad that we are able to return dollars to taxpayers to pay for things like gas and other necessities that are increasing in price,” Ige said Wednesday. “We do know that this measure will put funds directly into the pockets of our residents and certainly will help go a long way.”
The measure also commits $500 million to state’s rainy day fund and prepays $300 million for retirement liabilities.
“I think both of those investments are really helping to ensure that we, as policymakers, can fulfill our promises to the public servants and many in our community that certainly rely on government services, especially during these emergency times,” Ige said.
The last time the state gave a rebate to taxpayers was in 2009 — a “whopping” $1 for every exemption, Luke said Wednesday. Ige proposed a tax refund in his 2022 State of the State address earlier this year because of strong revenue projections, and the state Legislature was able to increase that amount.
Luke said she and Ige discussed possible tax rebates throughout this year’s state legislative session and he agreed that if there was an opportunity for legislators to do more for the hardworking people of the state, they should.
“This year, if you file your taxes, a family of four could potentially get $1,200, and that’s amazing,” she said. “That could go for gas, that could go for food, that could go for child care, things that people in this state struggle to meet and struggle to take care of.”
Luke added that combining an increase in minimum wage, making the earned income tax credit refundable and permanent and giving tax rebates will allow the state to not just take care of working families this year, but for the future as well.
Sen. Lorraine Inouye, who represents state Senate District 4 on the Big Island, echoed much of what the governor and her legislative colleagues said during the bill signing ceremony.
She agreed that an increase to the state’s minimum wage was long overdue, and while the first incremental step won’t take effect until October, it will certainly help as inflation continues to cause prices for goods and services to rise across the board.
She said it will help those returning to work after two years of the pandemic and hopes it will encourage more people to return to the workforce to help the state’s small businesses and restaurants.
“It’s a step in the right direction right now,” Inouye told Big Island Now on Wednesday. “Of course, it doesn’t happen until October, but hopefully it will be in time for the holidays as well.”
She said the tax refund also comes at the right time.
“It’s perfect timing because things are so expensive right now with inflation,” Inouye said. “Everything is putting a burden on families. It’s pretty much unaffordable now. People are living paycheck to paycheck.”
“At the start of the 2022 legislative session, we made a commitment to support programs and policies that would help our residents get back on their feet,” Ige said in a press release after the bill signing ceremony Wednesday. “Both bills represent a collaborative effort to bring the people of Hawaiʻi some relief as we continue to recover from the two-year pandemic.”
Rep. Nicole Lowen, who represents state House of Representatives District 6 on the Big Island, also weighed in.
“When the minimum wage can’t cover rent, food and gas, that’s a problem,” Lowen said in a statement to Big Island Now provided via email Wednesday. “Raising minimum wage is long overdue. There is still a lot of work to be done to address cost-of-living issues in Hawaiʻi, but the Legislature demonstrated this session that it can represent the working people of Hawaiʻi and deliver a financial win — with minimum wage increase, making the (earned income tax credit) refundable and permanent and providing tax rebates.”
“Thank you to the governor and our legislators for putting the people first,” Jhoe Rosales, who earns the current state minimum wage of $10.10 per hour, said in a a joint press release from the Raise Up Hawaiʻi and Hawaiʻi Tax Fairness coalitions. “This law will help my family make ends meet here in Hawaiʻi by helping us to pay for our rent, food and other necessities.”
Officials with other organizations in the state agreed with Lowen that more is needed.
“This historic legislation represents a significant and meaningful step toward transforming our economy so that it works for everyone, but much more remains to be done,” Gavin Thornton, Hawaiʻi Appleseed Center for Law and Economic Justice executive director, said in the joint press release from Raise Up Hawaiʻi and Hawaiʻi Tax Fairness coalitions.
At $10.10 an hour, or just $21,000 per year, a Hawaiʻi resident with no dependents making minimum wage, who is provided employee-sponsored health insurance, would need to work roughly 114 hours per week — three full time jobs — to afford a one-bedroom apartment, according to the press release. At $18 an hour, that same minimum wage worker would need to work 62 hours per week.
“The state should continue to advance legislation that moves us closer to a true living wage for all workers by continuing to raise the minimum wage beyond 2028,” Nate Hix, director of Living Wage Hawaiʻi, said in the joint press release. “If we can do that, and end the shortage of affordable housing, we can strengthen the working class that is the backbone of Hawaiʻi’s economy.”
“Research consistently shows that, when families can afford to pay for their basic needs, the benefits reach deep within our society,” Nicole Woo, director of research and economic policy at Hawaiʻi Children’s Action Network, added in the joint press release.
She said that beyond the proven economic benefits, the bills signed into law by Ige on Wednesday will help reduce poverty and inequality in the state, improving health outcomes and educational attainment for children in working families.
To watch the bill signing ceremony video on the governor’s Facebook page, click here.