Gov. Neil Abercrombie delivers State of the State

HONOLULU — Gov. Neil Abercrombie used his State of the State address Tuesday to push for priorities that included tax relief for elderly residents, a minimum wage increase and state-funded preschool.

The Democratic governor, during his fourth annual speech before lawmakers, also took time to tout the state’s recent accomplishments, notably concerning the state budget.

For tax relief aimed at the elderly, he proposed exempting presently taxed income from any source for residents who are 65 years old and older.

Exemptions would be for those with an adjusted gross income of $25,000; heads of households earning up to $35,000; and couples who file jointly earning up to $45,000.

Abercrombie said this plan would give seniors assurances that their retirement income won’t be taxed and that it would help as many as 25,000 older people in the state.

“I will be asking the Legislature to look at the way we tax seniors in order to provide more equity and fairness to those on fixed and middle incomes to see that more of their money remains in their pocketbooks,” he said. “We need to bring parity to the way we look at and tax retirement income.”

House Minority Leader Rep. Aaron Johanson said afterward that tax equity for the elderly was the “meatiest” part of a speech that played it safe.

“There weren’t a whole lot of new ideas or policies” put forth in Abercrombie’s speech, Johanson said.

Another idea Abercrombie described was a bill he plans to propose to raise the state’s minimum wage by $1.50 to at least $8.75 starting in January 2015. It’s currently $7.25.

Average weekly earnings have increased 16 percent since 2007, while the minimum wage has remained unchanged, he said. Hawaii’s unemployment rate has improved to the fifth lowest in the nation, but minimum wage earners in the state are confronted by the high cost of living on the islands and need more help, Abercrombie said.

“It is a myth that increases to the minimum wage just benefits entry level workers, mostly teenagers,” he said. “In Hawaii, 85 percent of minimum wage earners are 21 years old or older.”

As expected, Abercrombie continued to stress early childhood education. He said in a state where the average preschool tuition is more than $8,000, there needs to be increased access for the 4-year-olds who will be affected by a change in the kindergarten entry age. He said requests total about $8 million to increase support for families through the Preschool Open Doors program.

“Our plan is targeted, aimed at helping those who otherwise have little or no options,” he said. “These initial investments will serve an additional 1,040 children and their families.”

An “alarming number” of Hawaii’s children enter school without basic skills — “wanting to read, vocabulary acquisition and learning how to behave within a group,” he said. In a rare deviation from his scripted remarks, he with a chuckle: “A lesson we could all take to heart ourselves.”

It’s an election year for Abercrombie, who was sworn into office in December 2010 after 20 years in Congress. As an accomplishment, he highlighted an $844 million general fund surplus and said it represents a turnaround of more than $1 billion since 2010.

Fellow Democrats state Sen. David Ige, the chairman of the Senate Ways and Means Committee, and state Rep. Sylvia Luke, chairwoman of the House Finance Committee, cautioned after the speech that “surplus” is a loose term when there’s debt and when it was achieved in part by scaling back Abercrombie’s funding requests.

“If we had done everything that the governor requested, we wouldn’t be sitting on this carry over balance we see today,” Luke said.

Ige is challenging the governor in the upcoming primary election.

Abercrombie also highlighted his establishment of the Hawaii Interagency Council on Homelessness in 2011 and his appointment by President Barack Obama to serve on a national climate change task force.

Looking ahead, Abercrombie said other priorities include preserving open spaces at Turtle Bay, supporting the Thirty-Meter Telescope, endorsing initiatives to fund invasive species programs and providing housing for the “chronically homeless and those who suffer from a disability.”