Hawai'i had the highest per-capita state tax burden in the nation in 2004, the U.S. Census Bureau has reported, a figure skewed by taxes paid by the millions of tourists who visit the Islands.

The state collected $3.8 billion in state taxes in 2004 — or $3,050 per person — with most of the money coming from the general excise tax and from individual income taxes. The general excise tax, which is charged on virtually all business transactions, is paid by tourists and residents alike.

More than 6.9 million people visited the Islands in 2004, so the amount of taxes they paid has a disproportionate influence on Hawai'i's total state tax burden when compared to residents in other states.

"It is misleading," Lowell Kalapa, president of the Tax Foundation of Hawai'i, said of using the Census Bureau figures to determine the tax burden on Hawai'i residents.

But Kalapa does believe that residents are overtaxed. The Census Bureau statistics show that Hawai'i is 11th nationally in the amount paid per capita in individual income taxes among states that charge income taxes. Kalapa said other studies have found that when county property taxes and other local taxes are taken into consideration, Hawai'i residents are among the most taxed in the nation.

"We're not at the top, but we're in the top 10 percent," Kalapa said.

PROPOSED TAX RELIEF

Gov. Linda Lingle has proposed using nearly $300 million of a projected state budget surplus for tax relief, including one-time tax rebates to residents. State lawmakers have been more cautious and will likely wait and see if the state's economic forecast remains strong before supporting tax relief this year.

Honolulu Mayor Mufi Hannemann and several members of the City Council are discussing proposals to help residents deal with increases in property tax payments.

Nationwide, state taxpayer burdens increased by an average of 41 percent from 1994 to 2004.

Every state but one collected more taxes per person in 2004 than it did a decade earlier, the Census Bureau said. Only Alaska saw a decline in the amount it collects per person.

Even when the numbers are adjusted for inflation, the individual tax burdens increased in 43 states.

Rising education and Medicaid costs have fueled spending growth, which has led to higher taxes.

"Medicaid has been the fastest growing program in state budgets going back to 2000," said Arturo Perez, a fiscal analyst at the National Council of State Legislatures.

Medicaid is the state-federal health insurance program for the poor. In an effort to stem rising costs for states, Congress passed legislation last week allowing states to charge about 13 million Medicaid beneficiaries new or increased co-payments and premiums.

The big range in state taxes reflects the variety of government revenue systems throughout the country. The numbers do not include local taxes, which in many states generate most of the money for schools. They also do not include federal taxes.

Wyoming, Connecticut, Minnesota and Delaware round out the top five states in tax receipts per person. South Dakota, Colorado, New Hampshire and Alabama round out the bottom five.

New Hampshire had the biggest increase from 1994 to 2004, with the state tax burden more than doubling. But at $1,544 per person, it remained among the lowest in the country.

Alaska, which gets much of it revenue from oil production, saw its state tax receipts drop 1 percent, to $2,035 per person. Oil revenue helped Alaska spend $12,294 per person in 2004, far more than any other state.

SOURCES OF REVENUE

States, on average, get nearly half their tax revenues from sales taxes. They get a third from personal income taxes and 5 percent from corporate income taxes.

Education is the biggest budget item, consuming an average of 31 percent of state spending. Public welfare, which includes Medicaid, comes in second at 24 percent. Highways account for 6 percent of state spending and police protection just 1 percent.

Many states raised taxes early in the decade because of budget shortfalls caused by the economic slowdown. Many of those states now have budget surpluses, leading some, including Hawai'i, to debate tax cuts.

"Many states are having an unexpected surplus of revenue, and that is because of economic growth," said Stephen Slivinski, director of budget studies at the Cato Institute, a Washington public-policy research group. "It's mainly because their estimates on economic growth were very low."

Staff writer Derrick DePledge contributed to this report.