Civil Beat warned on May 11 that a bill on Gov. Linda Lingle‘s desk raised a number of troubling questions.

• Is it legal for a government to renege on its word when it comes to a promise to investors?
• If it is, what are the ramifications for future administrations — and taxpayers — if this one decides to do just that?
• If the answer to the first question is in doubt, is the cost of deferring the credits more burdensome than paying up now?

Lt. Gov. James “Duke” Aiona did the right thing by vetoing a measure that would have deferred for three years high-technology tax credits available under something known as Act 221.

Civil Beat had pointed out that if investors sued over the broken promise, as they vowed they would, the state wouldn’t have been able to tap into the money it saved by not giving out the tax credits anyway. The state would have had to set aside the money in a special fund it couldn’t tap until the litigation was resolved. Plus there would have been legal expenses. And of course, the ramifications from the uncertainty over dealing with Hawaii and the negative impact on the state’s bond rating.

Share your thoughts on Aiona’s veto and the technology tax credits in our Money discussion.