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Spotlight on Retirement Income
This week we continue our series on the recommendations made by the Hawaii Tax Review Commission.
“Hawai‘i taxation of retirement income is neither fair nor equitable,” they say. “The exemption of large portions of retirement income impairs tax adequacy.” Their recommendations: “Tax pension and other retirement income uniformly. Exempt a base amount of pension income initially. Continue to exempt Social Security benefits from income tax.”
Hawaii taxation of pension income is somewhat of a mixed bag. Our income tax law has an exemption for “compensation received in the form of a pension for past services” that has been on our books since Act 169 of 1953. When individual retirement accounts and self-employed retirement plans gained popularity in the 1970s, our Department of Taxation issued Tax Information Release 53-77 (1977), saying that it was limiting the pension exclusion to “plans fully funded by the employer,” on the theory that if the employee contributed to the retirement plan, the employee was in effect buying an annuity for himself or herself, and taxation would then follow the rules for annuities. Thus our tax laws allow employer-funded pensions to escape tax, while fully taxing 401(k) plans, IRAs, and other retirement vehicles that are funded through the employees’ choices.
The Tax Review Commission slammed this distinction, saying that there is no economic justification for this. It was also clearly troubled by the sheer amount of pension benefits escaping the state income tax every year, which topped $4 billion in 2019:
(Tax Review Commission Report, p. 20.) The Commission pointed out that Tax Review Commissions from prior years also struggled with this issue and recommended change.
Implementing the recommendation, however, has been a heavy lift politically. In 2014, then-Governor Neil Abercrombie became the first elected Democratic governor in Hawaii to be defeated in his bid for re-election. Honolulu Magazine cited his proposal to tax pensions as one of the nine reasons for his defeat. The Honolulu Star-Advertiser reported broad-based public opposition to the idea, even though it had been recommended by the Tax Review Commissions in 2003 and 2007. As the director of AARP Hawaii said at the time: “I think there is really deep concern, right across the board. … And it’s not that they’re just saying, ‘I don’t think this is a good idea.’ They are saying, ‘I think this is a terrible idea.’” Many seniors at the time expressed the view that they spent many years planning for their retirement and saw their pensions as a contract that the state wanted to disturb at a time when they were on fixed incomes and facing increased costs for health care or long-term care. The proposal to tax pensions did not pass, but voters still sent Gov. Abercrombie to the exit.
Current politicians, fearing a similar fate at the ballot box, are expected to be wary when confronting this issue. In that respect it might not matter that our current treatment of pensions might be illogical, inconsistent, or uneconomic. Many voters have seen it as a sacred cow, and it is going to be very difficult to change.
WMTA SAFETY DIRECTOR DENNIS TERPIN REGISTRATION FOR ALL HAZARDS CLASS
An All-Hazards Approach to Exercise and Evaluation Program - Part – 1
Let us Design an All-Hazards Tabletop Exercise
An all-hazards approach is an integrated approach to emergency. preparedness planning that focuses on capacities and capabilities that are critical to preparedness. for a full spectrum of emergencies or disasters, including internal emergencies and a man-made. emergency (or both) and natural occurring. An emergency plan is one part of a facility’s emergency preparedness program and provides the framework which includes conducting facility-based risk assessments that will assist a facility in addressing patient needs along with the continuity of business operations.
This course introduces the basics of emergency management exercises. It also builds a foundation for subsequent exercise courses, which provide the specifics of the Homeland Security Exercise and Evaluation Program (HSEEP).Through the use of this course, exercise program managers can learn to develop, execute, and evaluate exercises that address the priorities established by an organization’s leaders. These priorities are based on the National Preparedness Goal, strategy documents, threat and hazard identification/risk assessment processes, capability assessments, and the results from previous exercises and real-world events.
After the completion of the course students will be prepared for take the FEMA IS-120.C: An Introduction to Exercises and the IS-139.A: Exercise Design and Development on-line FEMA test and upon completion receive a FEMA certificate.
Dennis Terpin, Ph.D., O.H.S.T., Retired Emergency Manager for the University of Illinois Chicago. Dr. Terpin is Master Level instructor for FEMA/DHS at the Center for Domestic Preparedness and an instructor at FEMA’s Emergency Management Institute specializing in All Hazard Position Specific Incident Command. He is also a Certified Safety Manager, HSEEP Certified, Certified Fire Officer, EMT-P, World Trade Center Responder, Hazardous Materials and Rescue Specialist. In addition, Dennis was a member of UIC’s Incident Management Team and Deputy Commander of the University’s Emergency Response Team. As a Certified All Hazards Safety Officer, he worked such events as President Obama’s visit to UIC, the 12th World Summit of Nobel Peace Laureates Conference, the 2012 Chicago NATO Summit, Senate Bill10 in Illinois, PHISH concerts and President Trump Chicago Rally in 2016 and the State of Illinois Bi-Annual certification exercise.
Mahalo to our Board of Directors, elected during the Business Meeting:
• Joseph Pluta - President
• Joe Park - Vice President
• Richard Jarman
• Dean Louie
• Rick Nava
• Gregg Nelson
• Fereshteh Tali
• Dennis Terpin
Pule by Kahu Laki Pomaikai Kaahumanu
Mahalo to our Governmental Leaders for their participation:
• Senator Rosalyn Baker – 6th Senate District
• Representative Angus McKelvey – 10th House District
• Mayor Mike Victorino, County of Maui
• Council Member Tamara Paltin – West Maui
Mahalo to our Special Projects presentations by:
• Pulelehua - Preston Cheng, Developer, Maui Oceanview LP
• Maui Cancer Center LLC – H. Alan Megahy, Project Manager
• West Maui Hospital - Brian Hoyle, Developer, Newport Hospital Corporation
• Healthcare in Hawaii: Dr. Keli’i Akina, Ph.D., President & CEO of
Grassroot Institute of Hawaii
• State DOT Highways – Robin Shishido, introduction by Bob Pure
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