Charles is a single dad living in Kalihi Valley and raising a 14-year-old and an 11-year-old on his own. The family lives in a very small studio that they can afford because Charles does work for the landlord in exchange for some rent reduction.

Every year at tax time, Charles knows that he qualifies for tax credits that give him some extra money to buy necessities for his children. But as the cost of living keeps rising in Hawaii, he and many other working parents like him need more help, in order to be able to keep body and soul together.

St. Elizabeth’s Episcopal Church’s outreach to the community in Palama brings us into contact with so many families like Charles and his children. During the pandemic, we’ve seen their need for assistance soar. And now, these same families are struggling with ever-rising prices, in what’s already the most expensive state to live in.

For the working poor, basics like a roof over head and enough food to eat are a daily struggle. While the Legislature’s proposal for a one-time bonus this year is welcome, families like Charles’ also need help that they can count on year after year.

That’s where the Earned Income Tax Credit comes in. It’s a simple idea that helps lower to middle-income workers — especially single parents — keep more of what they earn. The credit increases for those with children — and who does not want to help alleviate poverty among our keiki?

The state EITC has provided a boost to tens of thousands of working families in Hawaii since 2018. But if our Legislature doesn’t renew it this session, it will expire at the end of the year. That would mean taking away financial help that many of the working poor have come to rely on.

Our lawmakers also have the opportunity to make the EITC better. Hawaii’s EITC is currently designed in such a way that the lowest-income workers can’t get the full amount of the credit that they qualify for. This session, our Legislature can and should tweak it to provide more relief to those families who need it the most.

Culture Of Aloha

The federal EITC already allows such families to get their full credit, in the form of a tax refund. In fact, of the 31 states that have an EITC, Hawaii is one of only five that doesn’t let tax filers get their credit as a tax refund. It’s time to align Hawaii’s EITC with the federal version, and most other states, by making it refundable.

More broadly, the EITC is a boon to the local economy because low-income earners typically spend all of their money locally to meet basic needs. If improved this session, tens of thousands of low- to middle-income families will get tax refunds through the EITC, allowing monies that otherwise would go to pay taxes to instead purchase food, rent and gas.

In other words, making the state EITC refundable is as good for businesses as it is for the working poor, and businesses should let our legislators and the governor know that they welcome it. In addition, improving the EITC would help close racial inequities. Currently, Native Hawaiian and Pacific Islander tax filers get more from the EITC than the state average, and they would similarly see the biggest boost from making it refundable.

It’s time to make Hawaii’s EITC align better with the culture of aloha.

We all agree self-sufficiency is better than merely depending on handouts. The EITC is a great incentive to stay employed because with the credit, more of what is earned is kept by the worker. And there’s almost no bureaucracy, as this tax credit flows to workers as part of their annual income tax filing.

It’s time to make Hawaii’s EITC align better with the culture of aloha and being pono, core values that make us who we are. Extending the state EITC and making it refundable will make the lives of many a little less of a struggle to survive, paycheck to paycheck, and help keep them from joining the ranks of the houseless.