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Ige signs $18 minimum wage increase, tax refund

HONOLULU — Hawai‘i Gov. David Ige on Wednesday signed legislation raising the state’s minimum wage to $18 an hour by 2028.

The $18 minimum would be the highest dollar amount among the 50 states and the District of Columbia. However, some states automatically boost their minimum wage when the cost of living increases. California, which currently has a $15 minimum wage, could have a higher wage in six years time given inflation.

Hawai‘i’s minimum wage is currently $10.10 an hour. The new law raises the rate in increments over the next several years, starting with $12 on Oct. 1.

Hawai‘i currently features the highest cost of living in the nation, and this number is even higher on Kaua‘i.

A state report estimates Kaua‘i “self-sufficiency wage” — the amount needed to cover basic housing, food, transportation and other costs — is $40,830 for a single adult. A person working at the current minimum wage of $10.10 an hour would make just $21,008 a year.

Based on this report, a person working full-time on Kaua‘i would need to make $19.62 an hour to afford the cost of living.

The bill makes the earned income tax credit permanent and refundable, helping low- to moderate-income workers cut their taxes and potentially increase their tax refund.

The Hawai‘i Tax Fairness Coalition estimates that the policy would to boost the incomes of 5,452 families by $420 on average while generating $2,840,179 in economic activity for Kaua‘i.

Ige also signed a measure providing one-time tax refunds. Individuals who earned less than $100,000 in 2021 and couples who earned less than $200,000 will get $300 per tax exemption. For a family of four, the payout could total $1,200.

Individuals who earned more than $100,000 and couples who earned more than $200,000 will receive $100 per exemption.

The bill also puts $500 million in the state’s rainy day fund and sets aside $300 million for state employee pensions.

Progressive organizations Raise Up Hawai‘i, YES HI Tax Fairness, and Hawai‘i Appleseed applauded the bill signings in a release Wednesday.

“This historic legislation represents a significant and meaningful step toward transforming our economy so that it works for everyone,” said Hawai‘i Appleseed Executive Director Gavin Thornton. “But much more remains to be done.”

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The Garden Island Newspaper reporter Guthrie Scrimgeour contributed to this report.
Source: The Garden Island

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