Hawaii Officials, Lawmakers Consider New Payroll Tax, Tax Credit Programs To Pay for Long-Term Care Coverage

The Hawaii Legislature appears poised to approve legislation that would impose a payroll tax of about $10 per month to provide $70 per day for an individual's long-term care for up to one year, the Honolulu Advertiser reports. Under the measure, the tax money would create a state program to allocate the money, and the tax would increase to $23 per month by 2012, the Advertiser reports. Gov. Linda Lingle (R), who has said she would veto such a measure, called the proposed law "a tax on all the people of Hawaii for no immediate benefit." Lingle instead supports a tax credit of 30% of the amount people spend on long-term care insurance. Tax credits would start at 10% in 2004 and increase to 30% by 2006 and would cost the state $2 million in lost tax revenue in 2004 and $6 million by 2006, according to the Advertiser. A similar proposal in the state House would allow a tax credit of 50% of the cost of insurance premiums for long-term care, up to a maximum of $2,500 per year. According to the National Association of insurance Commissioners, in 2001, 28,160 Hawaii residents received long-term care covered by private insurers at an average cost of $3,236 per person (Dingeman, Honolulu Advertiser, 3/10).