I couldn’t help noticing this little slip-up in Derrick DePledge’s long front-page story about the state budget shortfall in this morning’s Honolulu Advertiser.

Midway through the story, DePledge writes:

In private, some lawmakers are disappointed by what they see as political posturing by some of their colleagues, including some seeking higher office next year.

Properly primed, readers are then pointed towards the likely suspects by introducing them with added pointers.

Kauai Senator Gary Hooser becomes “State Senate Majority Leader Gary Hooser, D-7th (Kauai, Niihau), who is running for lieutenant governor next year“, and Congressman Neil Abercrombie is introduced as “U.S. Rep. Neil Abercrombie, D-Hawaii, who is running for governor next year“.

What’s the problem, you ask?

Earlier in the story, DePledge quotes the Senate President, introduced simply as “state Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha)”, rather than “state Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha), WHO IS RUNNING FOR THE 1ST DISTRICT CONGRESSIONAL SEAT NEXT YEAR.”

Others also escape being identified by their ambitions. Senator Donna Kim could have been introduced as “State Sen. Donna Mercado Kim, D-14th (Halawa, Moanalua, Kamehameha Heights), the chairwoman of the Senate Ways and Means Committee, WHO HOPES TO TAKE OVER AS SENATE PRESIDENT IF HANABUSA IS ELECTED TO CONGRESS.”

Why the difference in treatment?

DePledge also goes easy on the governor and legislative leaders by letting them sidestep the issue of an excise tax increase with generalities.

Approaching the next session in January, Lingle and state House and Senate leaders said they would attempt to balance the budget without raising the general-excise tax, which they believe is regressive, could discourage consumer spending and might slow the state’s economic recovery.

In my view, the tax issue deserves a closer look in the current context.

First, there’s the history of our current tax rates.

I noted this issue back in July:

Most people have forgotten that Hawaii’s legislature approved a significant cut in income tax rates in 1998, with the top rate falling nearly 25%. State revenues dropped accordingly. I have to assume that the compounded effects of that decline in state revenues is the backdrop to today’s crisis.

According to a 2002 study prepared for the 2001-2003 Tax Review Commission:

In 1998 the Legislature expanded the individual income tax brackets and reduced tax rates for the 1999, 2000, and 2001 tax years. They also repealed the food income tax credit and created a low-income refundable tax credit. The Tax Department estimated that these changes would result in revenue losses of $72 million in FY99, with losses increasing to $234 million by FY03. Those projected losses will continue to have an impact on state revenues throughout the decade. [emphasis added]

For most of the past decade, Hawaii’s highest income earners paid a top income tax rate of 8.25%, well below the 10% paid up until 1999. Here’s a chart of the rollbacks in tax rates passed in 1998. It was not until this year that the legislature reversed those cuts and adopted new higher rates for those earning more than $300,000 annually, passing the bill over the governor’s veto.

Those politically popular tax cuts of 1999 are what set us up for this crisis by undermining the tax base year after year. You could see the crisis coming. All it needed was a bit of outside stimulus and here we are, a billion bucks down.

And the most recent Tax Review Commission noted a major advantage of the General Excise Tax over state income tax:

Furthermore, the GET has the advantage that a substantially greater part of the burden of the tax can be exported to nonresidents. The study we commissioned estimated that about 38 percent of the GET is borne by nonresidents, whereas only about 23 percent of the Individual Income Tax is shifted to nonresidents. [emphasis added]

And, while anti-tax crusaders predicted dire consequences from the 1/2-percent increase in the GET now being paid by Honolulu residents to fund the city’s rail project, there’s simply no evidence at all that the extra 1/2 penny tax caused any disruptions comparable to impact of furloughs and loss of public services we are now experiencing in the wake of the governor and legislature’s failure to consider a temporary GET hike as part of the response to the current crisis.

Now that we’re beginning to understand what is at stake, perhaps that extra part of a penny, or even a full penny increase in the GET starts to look a lot better compared to the impact of the dozens of furlough days planned over the next two years.

The point being that reporters shouldn’t accept those glib and dismissive generalities presented by Lingle and “legislative leaders” as a substitute for serious discussion of the underlying arguments and evidence concerning the costs and benefits of such a tax increase.