A panel of House lawmakers Friday moved forward with a proposal that would raise Hawaii’s minimum wage to $13 an hour by 2024 as well as make Hawaii’s earned income tax credit refundable.

House Bill 2541 will now go to a vote by the full 51-member House, where it is likely to pass, before going to the Senate. It’s one of four bills introduced as a joint effort by the Legislature, Gov. David Ige and the business community.

The vote was met with quick rebuke from a coalition of local companies, labor unions and nonprofits that have advocated for a raise in wages to at least $17 an hour by 2025.

House Finance Labor Committees
A joint panel of House lawmakers, chaired by Reps. Sylvia Luke and Aaron Johanson, passed a key bill that would raise the minimum wage and make Hawaii’s earned income tax credit refundable. Blaze Lovell/CivilBeat/2020

“The increase in minimum wage to $13 by 2024 in the bill falls far short of what working people need to afford the basics,” Raise Up Hawaii said in a press release.

Last year, lawmakers and Gov. Ige pushed to raise wages to at least $15 an hour, however, those proposals and others failed late in the session.

This year, the proposed raise hike was lowered in an attempt to appease the business community, which has fought against increases to the minimum wage over worries that it could negatively impact small businesses.

To make up for the shortfall, lawmakers also want to make Hawaii’s earned income tax credit refundable. They tried to do the same in 2017, but the credit was ultimately made nonrefundable at the urging of the state Department of Taxation.

In Hawaii, the tax credit, which cuts off at an annual gross income of $56,844 for a married couple with three children, is set at 20% of a similar federal tax credit.

For example, the maximum credit for that same family is $6,660 in 2020. If the state credit is made refundable, and that family has paid all their taxes, they could get up to $1,320 back from the state.

A joint panel of legislators from the House Finance and House Labor committees made minor changes to the bill, including restoring the cutoff for joint filers to claim a $150 food tax credit at $50,000 a year.

Something to consider...

Civil Beat is a small, independent newsroom that provides free content with no paywall. That means readership growth alone can’t sustain our journalism.

The truth is that less than 2% of our monthly readers are financial supporters. To remain a viable business model for local news, we need a higher percentage of readers-turned-donors.

Will you consider making a tax-deductible gift today?

About the Author