Hawaii Deal Raises Taxes on Higher Earners to Close Budget Gap

Hawaii tax negotiators struck a deal to preserve some planned personal income tax cuts for lower-income filers while adding a new tax bracket for households earning at least $1 million per year.

The state’s Democratically controlled legislature is expected to vote Wednesday on the compromise tax package (SB 3125) hammered out between House and Senate leaders after months of debate over how to close a projected budget gap. The legislature is scheduled to adjourn Friday.

The debate showed how quickly states’ fiscal fortunes have turned due to steep cuts to federal aid and a drop in pandemic-era funding ...