Landmark Cost of Living Reduction Bill to Become Law in Hawaiʻi

Governor David Ige will sign House Bill 209, a landmark cost of living reduction bill, into law on Monday, July 10 in the Governor’s Ceremonial Office.

Landmark Cost of Living Reduction Bill to Become Law in Hawaiʻi. File image by Wendy Osher. Maui Now graphic.

HB 209 establishes a state earned income tax credit, mirroring the federal earned income tax credit, to help low-income workers retain a larger percentage of their yearly income. The bill also permanently extends the higher rates of the refundable food/excise tax credit, which makes it less costly for those in need to afford necessities like food.

“Creating a state-level earned income tax credit is the most significant anti-poverty measure passed by the Legislature in decades,” said House Speaker Scott K. Saiki.

HB 209 is a financially responsible measure that is financed through the restoration of the highest income tax brackets that existed until 2015.

“HB 209 is all about helping working people keep more of what they make. At its core, it’s a compassionate, fair, and responsible reform to tax policy that helps to alleviate Hawaii’s oppressive cost of living,” said Rep. Aaron Ling Johanson, author and introducer of the bill.

According to the Department of Taxation, HB 209 will give $130 million back to low-income families in the first six years of the credit. More than 107,000 people claim the federal earned income tax credit and would potentially be able to claim the state credit. Additionally, the Refundable Food/Excise Portion amounts to $110 per exemption per claimant.