TABLE OF CONTENTS

INTRODUCTION ...................................................................................................................................... 4
METHODOLOGY...................................................................................................................................... 5
Housing...................................................................................................................................... 5
Child Care................................................................................................................................... 5
Food ........................................................................................................................................... 7
Transportation ........................................................................................................................... 8
Health Care ...............................................................................................................................11
Miscellaneous.......................................................................................................................... 13
Taxes........................................................................................................................................ 14
ESTIMATES OF BASIC LIVING EXPENSES.............................................................................................. 20
APPENDIX A. Primary Data Sources .................................................................................................. 22
APPENDIX B. Child Care Cost Estimation, 2002-2005....................................................................... 23
APPENDIX C. Food Cost Estimation, 2002-2005 ............................................................................... 25
APPENDIX D. Transportation Cost Estimation, 2002-2005 ............................................................... 27
APPENDIX E. Health Care Cost Estimation, 2002-2005 .................................................................... 31
APPENDIX F. Tax Credits, 2002-2005 ............................................................................................... 32
REFERENCES......................................................................................................................................... 35

LIST OF TABLES

Table 1. Median Rent for a Two-Bedroom Partly Furnished Apartment by County, 2002-2005 ...... 5
Table 2. Estimated Monthly Child Care Cost for a Pre-School Child and a School-Age Child by
County, 2002-2005............................................................................................................. 6
Table 3. Estimated Monthly Food Cost by Family Type and County, 2002-2005 ............................. 8
Table 4. Estimated Monthly Public Transportation Cost by Adult vs. Youth and by Family
Type, Honolulu, 2002-2005................................................................................................ 9
Table 5. Estimated Monthly Cost of Owning and Operating a Vehicle, Hawai‘i, Maui, and
Kaua‘i Counties, 2002-2005 ..............................................................................................11
Table 6. Estimated Monthly Health Care Cost by Family Type, 2002-2005 ................................... 13
Table 7. Estimated Monthly Miscellaneous Cost by Family Type and County, 2002-2005 ............ 14
Table 8. Federal and Hawai‘i State Tax Credits, 2002-2005 .......................................................... 15
Table 9-1. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits by Family
Type, Honolulu, 2002-2005.............................................................................................. 18
Table 9-2. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits by Family
Type, Hawai‘i, 2002-2005................................................................................................. 18
Table 9-3. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits by Family
Type, Maui, 2002-2005 .................................................................................................... 19
Table 9-4. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits by Family
Type, Kaua‘i, 2002-2005 .................................................................................................. 19
Table 10-1. Estimated Monthly Expenses by Family Type, Honolulu, 2002-2005 .............................. 20
Table 10-2. Estimated Monthly Expenses by Family Type, Hawai‘i, 2002-2005 ................................. 20

2 Aloha United Way

Table 10-3. Estimated Monthly Expenses by Family Type, Maui, 2002-2005 ..................................... 21
Table 10-4. Estimated Monthly Expenses by Family Type, Kaua‘i, 2002-2005 ................................... 21
Table A-1. Primary Data Sources by Cost Category ........................................................................... 22
Table B-1. Average Monthly Child Care Cost by Age Group and Geographic Area, 2005 .................. 23
Table B-2. Average Monthly Child Care Cost by Child Type and County, 2005.................................. 23
Table B-3. A-Plus’s Monthly Fee by County, 2005............................................................................. 23
Table B-4. Average Hourly Rate for Private Child Care by County, 2005 ........................................... 23
Table B-5. Average Monthly Child Care Cost by Child Type and County, 2005.................................. 23
Table B-6. Estimated Monthly Child Care Costs for a Pre-School Child and a School-Age Child
by County, 2002-2005 ...................................................................................................... 24
Table C-1. Monthly Food Cost by Family Type and District, 2003 ..................................................... 25
Table C-2. Average Monthly Food Cost and Food Cost Ratio by Family Type and County, 2003....... 25
Table C-3. Weekly and Monthly Food Cost by Age Group, Honolulu Metropolitan Area, 2002-
2005 ................................................................................................................................. 26
Table C-4. Estimated Monthly Food Cost by Family Type and County, 2002-2005 ........................... 26
Table D-1. Bus Fare Chronology for the City and County of Honolulu ............................................... 27
Table D-2. Average Monthly Bus Fare for the City and County of Honolulu, 2002-2005 ................... 27
Table D-3. Sample Annual Car Insurance Premiums by County, 2005 .............................................. 27
Table D-4. Estimated Annual Car Insurance Premiums by County, 2002-2005 ................................. 27
Table D-5. Estimated Annual Car Registration Fees and Taxes, 2002-2005......................................28
Table D-6. Estimated Monthly Fixed Cost by County, 2002-2005 .....................................................28
Table D-7. Estimated Monthly Fuel Cost, Hawai‘i, Maui, and Kaua‘i Counties, 2002-2005 ..............28
Table D-8. Estimated Average Monthly Maintenance Cost, Hawai‘i, Maui, and Kaua‘i Counties,
2002-2005 ........................................................................................................................ 29
Table D-9. Estimated Monthly Cost of Owning and Operating a Vehicle, Hawai‘i, Maui, and
Kaua‘i Counties, 2002-2005 ............................................................................................. 29
Table D-10. Monthly Private Transportation Cost by Family Type, Hawai‘i, Maui, and Kaua‘i
Counties, 2002-2005 ........................................................................................................ 30
Table D-11. Monthly Transportation Cost by Family Type and County, 2002-2005 ............................ 30
Table E-1. Average Employee Contribution for Family Coverage by Employment Sector, State of
Hawai'i, 2002-2005 .......................................................................................................... 31
Table E-2. Median Out-of-Pocket Medical Expenses by Age Group and Family Type, State of
Hawai‘i, 2002-2005 .......................................................................................................... 31
Table E-3. Estimated Monthly Health Care Cost by Family Type, State of Hawai‘i, 2002-2005 ........ 31
Table F-1. References Used in Tax Credits Estimation ...................................................................... 32
Table F-2. Selected Parameters Relating to Federal Tax Credit for Child and Dependent Care
Expenses, 2002-2005....................................................................................................... 32
Table F-3. Selected Parameters Relating to Child Tax Credit, 2002-2005 ........................................ 33
Table F-4. Income Criteria for Earned Income Credit for a Family With Two Qualifying Children,
2002-2005 ........................................................................................................................ 33
Table F-5. Selected Parameters Relating to Additional Child Tax Credit, 2002-2005 ....................... 33
Table F-6. Income Criteria for Selected Tax Credits in State of Hawai‘i, 2002-2005......................... 33
Table F-7. Selected Parameters Relating to State Tax Credit for Child and Dependent Care
Expenses, State of Hawai‘i, 2002-2005............................................................................ 34

Technical Notes for Economic Well-Being in Hawai‘i 3

INTRODUCTION

This technical documentation is a supplement to Economic Well-Being in Hawai‘i: Family and

Individual Self-Sufficiency—AUW Report (2007), developed by Aloha United Way in collaboration
with the Center on the Family and Hawai‘i Kids Count (available at www.uhfamily.hawaii.edu/
publications/publications.asp). It documents the methodology, assumptions, and data sources
used in estimating the basic living expenses for two prototype families in Hawai‘i’s four counties
from 2002 to 2005. It also provides detailed tables of these estimates.

We defined individual and family economic self-sufficiency as having the amount of money required
to meet basic needs without governmental or other subsides. We assumed all adults work and the
sources of family income are work earnings and refundable tax credits. Basic living expenses consist
of taxes and the necessary elements of a decent standard of living, including housing, child care,
food, transportation, health care, and other necessities such as clothing and household products.
We assumed a “no-frills” budget that is far from luxurious (see Bernstein, Brocht, & Spade-Aguilar,
2000; Pearce & Brooks, 2003). Fair-market rates from creditable sources were used to derive the
costs for basic living expenses (see Appendix A).

Self-sufficiency incomes were estimated for two family types: (1) a single-parent family with one pre-
school child and one school-age child, and (2) a two-parent family with one pre-school child and
one school-age child. A single-parent family was assumed to be headed by a female, based on the
fact that children in single-parent homes are three times more likely to live with a mother than a
father (U.S. Census Bureau, 2004). A parent was assumed to be an adult younger than 65 years old,
a school-age child was 5-12 years old, and a pre-school child was newborn to 4 years old. These
family prototypes can be used as benchmarks for other families. Multiple-year estimations, from
2002 to 2005, were calculated at the county level where cost differentials for various geographic
areas within the state were analyzed.

A comprehensive self-sufficiency standard for Hawai‘i was developed in 2003 by Dr. Diana Pearce
and Jennifer Brooks for the Hawai‘i State Commission on the Status of Women. Our attempts to
update the 2003 self-sufficiency standard using the Consumer Price Index did not yield satisfactory
results due to the differential increases in various living-cost components in different geographic
areas between 2002 and 2005. Moreover, complete replication of Pearce and Brooks’s work was not
feasible for this study due to the limitations of data availability.

This study therefore adopted Pearce and Brooks’s methodology with modifications. The
modifications were necessary because (a) the estimates in this study were done for multiple years at
the county level rather than for a single year at the district level, as in Pearce and Brooks’s 2003
standard; (b) more updated and reliable data sources were used whenever possible; and (c) the
changes in data sources required appropriate adjustments in assumptions and estimation
procedures in accordance with the nature of the available data. Essentially, the housing, health
care, and transportation costs were calculated using different data sources than were used in Pearce
and Brooks’s 2003 standard, whereas food and child care costs, taxes, and tax credits were
estimated using the same data sources. Due to the changes in data sources and methodology,

4 Aloha United Way

direct comparison between Pearce and Brooks’s 2003 estimates and the estimates in our report is
not feasible and is therefore not suggested.

Our methods of estimation, including cost components and estimation procedures, assumptions,
data sources, and estimated expenses, are described in detail below. Note that estimations were
rounded to the nearest whole number at the final step of our calculations; however, for ease of
presentation we show rounded numbers in some intermediate tables, and as a result they may not
produce the exact totals shown in the final tables. This technical document does not touch upon the
background information or the application of the family self-sufficiency standard, which can be
found in other reports, including those by Bernstein, Brocht, and Spade-Aguilar (2000) and Pearce
and Brooks (2003).

METHODOLOGY

Housing

Housing cost refers to the rental cost (shelter rent plus utilities) for a privately owned, decent, safe,
and sanitary rental housing unit of a modest (non-luxury) nature with suitable amenities. Housing
cost was based on the prevailing long-term rent of partly furnished apartments including utilities of
water and electricity, but not cable or telephone services. Two-bedroom apartments were assumed
for both single-parent and two-parent families with two children, under the assumption that parents
do not share a bedroom with children.

Housing cost data for each county were compiled by Prudential Locations LLC and Hawaii
Information Service based on the advertisements for long-term rentals of partially furnished two-
bedroom apartments listed in the newspapers with the largest circulation in each county (Table 1).
Data for the years 2002-2004 for the City and County of Honolulu, 2002 for Hawai‘i County, and
2002-2003 for Maui and Kaua‘i Counties were provided by Prudential Locations LLC. The rest of the
data were provided by Hawaii Information Services. The listed advertisements might or might not
include electricity, and some included parking. It was assumed that the aggregated average rent
should approximate that of shelter rent plus basic utilities.

Table 1. Median Rent for a Two-Bedroom Partly Furnished Apartment by County, 2002-2005

Year Honolulu Hawai‘i Maui Kaua‘i

2002 $1,000 $1,020 $1,100 $1,125
2003 $1,250 $1,100 $1,317 $1,100
2004 $1,350 $1,263 $1,349 $1,308
2005 $1,703 $1,293 $1,475 $1,368
Sources: Hawaii Information Service; Prudential Locations LLC

Technical Notes for Economic Well-Being in Hawai‘i 5

Child Care

Child care expense is the cost incurred for families to keep children in private care and before- and
after-school child care programs while parents are at work. It was assumed that pre-school children
receive full-time private care (8 hours/day, 5 days/week, and 4.33 weeks/month) from either family
child care homes (FCC) or group child care centers (GCC). School-age children, on the other hand,
were assumed to receive two hours/day before-school private care and to be enrolled in the
Department of Education’s A-Plus after-school program ($55/month) during school days (9 months),
and to receive full-time private care during school breaks and summer vacation (3 months).

Age- and county-specific child care costs for FCC and GCC for the year 2005 were obtained from the
provider statistics published by PATCH. The child care expense for a pre-school child was
approximated by taking the simple average of all types of private care for children 3-4 years old and
4-5 years old. Note that if the child care rates for infants and toddlers were considered in the
calculations, the estimates would increase up to $20 from the current estimates. For a school-age
child, the monthly rate of private care was the average cost of all types of private care for children 5-
10 years old. Since PATCH reported on two districts for Hawai‘i County, their mean value was taken
as the county average. Monthly child care expenses for the years 2002-2004 were estimated by
deflating the 2005 figures using the annual Honolulu Consumer Price Index for urban wage earners
and clerical workers (HCPI-W) (DBEDT’s State of Hawaii data book 2005). Mathematically, the
monthly child care cost was calculated using the following formulas:

CCC = (CCCPS+CCCSA)*HCPI-W2005
CCCPS = (CCC0304+CCC0405) /2
CCCSA = [(CCC0510/8*2+CCCAPLUS)*9+CCC0510*3]/12
where
CCC = Average monthly child care cost
CCCPS = Average monthly child care cost for a pre-school child
CCCSA = Average monthly child care cost for a school-age child
CCC0304 = Average monthly child care cost for a child aged 3-4
CCC0405 = Average monthly child care cost for a child aged 4-5
CCC0510 = Average monthly child care cost for a child aged 5-10
CCCAPLUS = Monthly fees for the A-Plus Program ($55/month)
HCPI-W2005= 2005-based annual Honolulu CPI-W deflator

Table 2 shows the estimated monthly child care cost for a pre-school child and a school-age child by
county for the years 2002-2005. See Appendix B for more details.

Table 2. Estimated Monthly Child Care Cost for a Pre-School Child and a School-Age Child
by County, 2002-2005

Year Honolulu Hawai‘i Maui Kaua‘i HCPI-W2005

2002 721 597 648 611 0.91582
2003 735 609 661 624 0.93458
2004 759 629 682 644 0.96450
2005 787 652 707 668 1.00000
Sources: DBEDT’s State of Hawaii data book 2005; DOE, 2005; PATCH, 2005

6 Aloha United Way

Food

The food cost represents the expense of a family’s meeting the minimum nutritional standards as
defined by the Department of Agriculture’s Official USDA Food Plans: Cost of Food at Home at Four
Levels. The food plans assume all meals and snacks are purchased at stores and prepared at home.
The “low-cost plan” was believed to be more realistic than the “thrifty,” as it is the second lowest-
level food plan and still represents a very basic diet (Pearce & Brooks, 2003). Thus, the low-cost
plan was adopted for the food-cost calculation.

To calculate the monthly food cost for the two family prototypes in each county, five adjustments
were made based on USDA recommendations and some assumptions. First, USDA reports food
costs for individuals in four-person families on a monthly basis. We followed USDA’s advice of using
the food cost for June as the average monthly food cost and of adding a 5% adjustment to the cost
for each individual in a three-person family. Second, food costs for individual family members are
based on age-specific estimates for children and age- and sex-specific estimates for adults as
provided in USDA’s low-cost food plan. The food cost for a female adult was assumed for the adult
in a single-parent family. The estimates for the following age groups were used: 20-50 years old (for
adults), 6-8 years old and 9-11 years old (where the simple average was taken) for school-age
children, and 3-5 years old (for pre-school children). If food cost rates for infants and toddlers were
considered in the calculations, the estimates would decrease up to $12 from the current estimates.
Third, the monthly food cost for a family was derived from the sum of the weekly costs associated
with each individual family member, multiplied by a factor of 4.33. Fourth, USDA estimates for the
low-cost plan are for the United States as a whole. To reflect the higher food costs in the Honolulu
Metropolitan area, we used the same procedure as the USDA does of increasing the national
estimates by 43.7% (Nord, Andrews, & Carlson, 2005 & 2006). Fifth, the food cost for the Honolulu
Metropolitan area was assumed to approximate that of the City & County of Honolulu, to which we
applied county food-cost ratios to take county variations into account and obtain county-specific
food costs. The ratio is based on the food-cost estimates for each district in Hawai‘i in 2003 as
reported by Pearce and Brooks (2003) and was calculated as the ratio of the average cost of all
districts in a county to the average cost of all districts in the City and County of Honolulu.
Mathematically, the monthly food costs for the two family types were derived from the following
formulas:

Single-Parent Family:
FC1PF = [FCAF+FCKID0305+(FCKID0608+FCKID0911)/2]*105%*4.33*143.7%*CountyR
Two-Parent Family:
FC2PF = [FCAF+FCAM+FCKID0305+(FCKID0608+FCKID0911)/2]*4.33*143.7%*CountyR
where
FC1PF = Average monthly food cost for a single-parent family
FC2PF = Average monthly food cost for a two-parent family
FCAF = Average weekly food cost for a female adult aged 20-50
FCAM = Average weekly food cost for a male adult aged 20-50
FCKID0305 = Average weekly food cost for a pre-school child aged 3-5
FCKID0608 = Average weekly food cost for a child aged 6-8
FCKID0911 = Average weekly food cost for a child aged 9-11

Technical Notes for Economic Well-Being in Hawai‘i 7

 105% = Family-size adjustment factor for individuals in a three-person family
4.33 = Conversion factor for weekly food cost to monthly food cost
143.7% = Hawai‘i food-cost adjustment factor
CountyR = County food-cost ratio benchmarked against City & County of Honolulu for the
year 2003

Table 3 shows estimated monthly food cost by family types and county for the years 2002-2005. See
Appendix C for details of the estimation.

Table 3. Estimated Monthly Food Cost by Family Type and County, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
Year Honolulu Hawai‘i Maui Kaua‘i Honolulu Hawai‘i Maui Kaua‘i
2002 $578 $560 $714 $714 $795 $770 $982 $982
2003 $590 $571 $728 $728 $812 $786 $1,002 $1,002
2004 $624 $604 $771 $771 $858 $831 $1,059 $1,059
2005 $631 $611 $779 $779 $869 $841 $1,073 $1,073
Sources: Pearce & Brooks (2003); USDA, 2002-2005

Transportation

Transportation cost is based on the cost either of using public transportation or of owning and
operating a car for work trips, linking trips to daycare sites, trips for shopping, etc. Whenever public
transportation is widely available, it was assumed to suffice for a family’s basic transportation
needs; thus, the cost of riding the bus was taken as the estimate of transportation cost. When public
transportation is very limited or not available, transportation cost was estimated based on the cost
of owning, maintaining, and operating a privately owned vehicle, including fixed and variable costs.
For a two-parent family, we assumed both parents work and each needs a car to travel to and from
their respective places of work on their respective work schedules.

For the City and County of Honolulu, transportation cost was the cost of public transportation,
namely the monthly cost of bus passes. Although it would cost less to buy one annual pass than to
buy 12 monthly passes, we assumed most people purchase bus passes on a monthly basis. Due to
bus fare changes in 2002-2005, the average monthly cost for the bus was calculated by adding the
cost of a monthly pass for each month of the year and dividing by 12. Children under 6 years old ride
the bus free, and children 6-17 years old pay a 50% discounted bus fare. Mathematically, the
monthly transportation costs for the two family types in the City and County of Honolulu were
calculated using the following formulas:

Single-Parent Family:
TC1PB = TCPBA+TCPBY
Two-Parent Family:
TC2PB = TCPBA*2+TCPBY
where

8 Aloha United Way

 TC1PB = Monthly public transportation cost for a single-parent family
TC2PB = Monthly public transportation cost for a two-parent family
TCPBA = Monthly adult bus pass cost
TCPBY = Monthly youth bus pass cost

Table 4 shows the estimated monthly cost of bus passes for a single-family and a two-parent family
with one pre-school child and one school-age child.

Table 4. Estimated Monthly Public Transportation Cost by Adult vs. Youth and by Family Type, Honolulu,
2002-2005
1 Adult + 2 Adults +
1 Pre-School Child + 1 Pre-School Child +
Year Adult Youth 1 School-Age Child 1 School-Age Child
2005 $40 $20 $60 $100
2004 $40 $20 $60 $100
2003 $31 $15 $46 $77
2002 $27 $14 $41 $68
Source: DBEDT’s State of Hawaii data book 2005

For other counties, due to the limited availability of public transportation, transportation cost was
estimated based on the cost of private transportation. The private transportation cost covers the
owning or fixed cost, including registration, taxes, and insurance; and the operation or variable cost,
including fuel, maintenance, and repairs. The vehicle was assumed to run on regular gasoline. The
maintenance and repair costs cover normal and preventive maintenance to assure sound and
economical operation during the retention cycle of the vehicle. It was assumed that the vehicle has
been acquired prior to the year for which the cost estimation is made and therefore no purchase and
depreciation costs were included in the fixed cost. Also excluded from the fixed cost were such
opportunity costs as safety cost and congestion cost. Mathematically, the monthly costs of private
transportation for the two family types were calculated using the following formulas:

Single-Parent Family:
TC1PR = (FC+VC)/12
Two-Parent Family:
TC2PR = (FC+VC)/12*2
FC = (INS+REG)
INS = (PRVD1+PRVD2+PRVD3+PRVD4)/4*HCPI-W2005
REG = TRR/NPCR
VC = (GC+MC)
GC = GAS$*GAS
MC = MPM*AMY
MPM= MPM2003*HCPI-W2003
where
TC1PR = Monthly private transportation cost for a single-parent family
TC2PR = Monthly private transportation cost for a two-parent family
FC = Monthly cost of owning a vehicle (fixed cost)

Technical Notes for Economic Well-Being in Hawai‘i 9

 VC = Monthly operation cost (variable cost)
INS = Annual auto insurance premium
REG = Annual registration fees and taxes
PRVD1-PRVD4 = 2005 sample premiums of four major Hawai‘i-based auto insurers
HCPI-W2005= 2005-based annual Honolulu CPI-W deflator
TRR = State annual registration revenue
NPCR= Total number of passenger cars registered
GC = Cost of gasoline
MC = Cost of maintenance and repair
GAS$ = Average gas price per gallon
GAS = Average number of gallons of gas consumed per vehicle per year
MPM = Estimated cost of maintenance and repair per mile traveled
AMY = Average number of miles traveled per vehicle per year
MPM2003 = Estimated cost of maintenance and repair per mile for the year 2003
HCPI-W2003 = 2003-based annual Honolulu CPI-W adjustment factor

A number of sources were used in estimating the above costs. For auto insurance, the 2005 Sample
Annual Premiums from the Department of Commerce and Consumer Affairs (DCCA) was used. The
sample premiums were based on a 2004 Honda Accord DX, 4-door sedan or equivalent, with a clean
record assumed. Annual auto insurance cost (INS) in each county was estimated to be the average
of the sample premiums offered by four of the major or Hawaii-based automobile insurance
companies—First Security Insurance of Hawaii, Inc., GEICO Indemnity Co., Government Employees
Insurance Co., and Hawaiian Insurance & Guaranty Co., Ltd. The annual auto premiums for the years
2002-2004 were estimated by deflating the 2005 premiums with the HCPI-W.

Annual registration fees (REG) were estimated by dividing the state’s annual registration fees and
taxes received (TRR) (DOT’s Highway statistics, 2002-2005) by the total number of passenger cars
registered (NPCR) (DBEDT’s State of Hawaii data book, 2002-2005).

The fuel cost (GC) was calculated by multiplying the per-gallon gas price by the number of gallons of
gas consumed. The average per-gallon prices of regular gasoline (GAS$) for each county for the
years 2003-2005 were calculated based on the American Automobile Association’s regular gasoline
historical price data (as reported in DBEDT’s weekly fuel price charts to June 25, 2006). Prices in Hilo
and Wailuku were assumed to approximate the averages of Hawai‘i County and Maui County
respectively. Also assumed was that price of gas in Kaua‘i County was the same as that in Maui
County. Due to the lack of data, the prices in 2002 were estimated by multiplying the 2003 prices by
the average rate of price change per year between 2003 and 2005. DBEDT’s State of Hawaii data
book, 2002-2005, was the source for the average number of gallons of gas a vehicle consumed
annually (GAS).

Maintenance and repair costs (MC) were estimated by multiplying the per-mile maintenance cost by
the number of miles traveled. For the year 2003, the per-mile maintenance cost in Honolulu
(MPM2003) estimated by Runzheimer International was assumed to be applicable to all other counties
(DBEDT’s State of Hawaii data book 2005). The estimated cost was based on a typical intermediate-
size vehicle, represented by the 2003 Ford Taurus SEL sedan, driven 15,000 miles per year and

10 Aloha United Way

retained for four years. The rate for 2003 was then adjusted for 2002, 2004, and 2005 (MPM) by
applying HCPI-W. The annual average number of miles traveled per vehicle (AMY) was obtained from
DBEDT’s State of Hawaii data book, 2002-2005.

Table 5 shows the estimated monthly cost for owning and operating a vehicle. The total monthly cost
for a 2-parent family is two times the amount shown in table 5 because we assumed both parents
work and each needs a car to travel to and from work. See Appendix D for the details of each cost
category relating to private and public transportation.

Table 5. Estimated Monthly Cost of Owning and Operating a Vehicle, Hawai‘i, Maui, and Kaua‘i Counties,
2002-2005
Year County Fixed Cost Variable Cost Total Monthly Cost
2002 Hawai‘i $56 $130 $186
2002 Maui $52 $120 $172
2002 Kaua‘i $45 $120 $166
2003 Hawai‘i $58 $145 $203
2003 Maui $54 $142 $195
2003 Kaua‘i $46 $138 $184
2004 Hawai‘i $61 $151 $212
2004 Maui $56 $138 $195
2004 Kaua‘i $49 $146 $195
2005 Hawai‘i $63 $168 $232
2005 Maui $59 $180 $239
2005 Kaua‘i $51 $139 $191
Sources: DBEDT’s State of Hawaii data book, 2002-2005; DBEDT’s weekly fuel price charts to June 25, 2006;
DCCA, 2005; DOT’s Highway statistics, 2002-2005

Health Care

Health care cost includes health-insurance premiums and out-of-pocket medical expenses. The
employee’s share of the premium was assumed for the premium cost, as employers in Hawai‘i are
mandated to provide health insurance for all full-time employees and all adults in our prototype
families were assumed to work full time. Each family was assumed to purchase one family health
plan providing coverage for every family member. The out-of-pocket medical expenses were
payments by individual family members and families for medical and health services received and
medicines purchased.

The health-insurance premium rate was a weighted average of the premiums for a family plan paid
by employees in the private sector, state and local governments, and federal government. The
average private-sector rates for Hawai‘i for 2002-2004 were obtained from the National Medical
Expenditure Panel Survey (MEPS), and the 2005 rate was estimated by inflating the 2004 rate with
the HCPI-W change in 2004-2005. The medical CPI was not used as the inflation factor because it
was not available for 2005. The public-sector rate was the average of Kaiser and HMSA family plans
offered to government employees in Hawai‘i. The rates for federal employees for 2002-2005 were

Technical Notes for Economic Well-Being in Hawai‘i 11

those published by the U.S. Office of Personnel Management. The rates for state and local
government employees for each fiscal year from 2003 to 2005 were published by Hawaii Employer-
Union Health Benefits Trust Fund (EUTF), and the missing data for 2002 was estimated by deflating
the 2003 rate by the rate of increase in 2002-2003 federal rates. The average employee premiums
for the private sector, state and local governments, and federal government were first weighted by
their respective proportions of total employees in each of these sectors in Hawai‘i (0.80, 0.15, and
0.05 respectively) and then summed up to obtain the average health insurance cost. The weights
were calculated based on 2004 employment statistics provided by MEPS and DBEDT’s State of
Hawaii data book.

The out-of-pocket expenses for a family were the sum of such spending by individual family
members. The MEPS provides age-specific out-of-pocket medical spending data for Hawai‘i from
2002 to 2004. The age groups that represented the closest approximation for members of our
prototype family were included in this calculation: 0-4 years (pre-school children), 5-17 years
(school-age children), and 25-44 years and 45-64 years (combined for adults). The MEPS reports the
amount of out-of-pocket spending in five categories, with the estimated number of people in each
spending category. We calculated the median spending for adults, pre-school children, and school-
age children for 2002-2004 and inflated the 2004 figures to 2005 figures using HCPI-W change in
2004-2005. Mathematically, the monthly health care costs for the two family types were derived
from the following formulas:

Single-Parent Family:
HCC1PF = (IP + OPE1PF)/12
Two-Parent Family:
HCC2PF = (IP + OPE2PF)/12
IP = PSR*0.80+SGR*0.15+FGR*0.05
SGR = (HMSA+Kaiser)/2*12
FGR = (HMSAHIGH+KaiserHIGH)/2*12
OPE1PF = OPEA2564+OPEKID0004+OPEKID0517
OPE2PF = OPEA2564*2+OPEKID0004+OPEKID0517
where
HCC1PF = Average monthly health care cost for a single-parent family
IP = Average annual employee premium for a family health insurance plan
OPE1PF = Average annual out-of-pocket expense for a single-parent family
HCC2PF = Average monthly health care cost for a two-parent family
OPE2PF = Average annual out-of-pocket expense for a two-parent family
PSR = Average annual premium rate for a family health insurance plan for private-sector
employees
0.80 = Weight for the private sector’s premium rate
SGR = Average annual premium rate for a family health insurance plan for state and local
government employees
0.15 = Weight for the state and local governments’ premium rate
FGR = Average annual premium rate for a family health insurance plan for federal
government employees in Hawai‘i
0.05 = Weight for the federal government’s premium rate

12 Aloha United Way

 HMSA = State and local government employee’s monthly premium for HMSA family plan
Kaiser = State and local government employee’s monthly premium for Kaiser family plan
HMSAHIGH = Federal employee’s monthly premium for HMSA high family plan
KaiserHIGH = Federal employee’s monthly premium for Kaiser high family plan
OPEA2564 = Median annual out-of-pocket expense for an adult aged 25-64
OPEKID0004 = Median annual out-of-pocket expense for a child aged 0-4
OPEKID0517 = Median annual out-of-pocket expense for a child aged 5-17

Table 6 shows the average monthly health care costs for both family types during the period 2002-
2005. See Appendix E for more details.

Table 6. Estimated Monthly Health Care Cost by Family Type, 2002-2005

1 Adult + 1 Pre-School 2 Adults + 1 Pre-School
Year Child + 1 School-Age Child Child + 1 School-Age Child
2002 $191 $205
2003 $204 $220
2004 $233 $248
2005 $243 $259
Sources: DBEDT’s State of Hawaii data book 2004; EUTF, 2003-2005; MEPS, 2002-2004; U.S. Office of
Personnel Management, 2002-2005

Miscellaneous

Included in this category were expenses for all other essentials, including clothing, personal hygiene
and grooming, diapers, telephone service, household and cleaning products, and other items. The
miscellaneous category was assumed to be 10% of the total of all other basic living costs except
taxes (Pearce & Brooks, 2003). This is a conservative estimate, in comparison with the prevailing
estimate of 15% in other studies on basic family budgets and the statistics reported by the Bureau of
Labor Statistics based on the Consumer Expenditure Survey. Table 7 shows the average monthly
spending in the miscellaneous category derived from the general formula below for the period 2002-
2005.

MISC = (Housing+CCC+FC+TC+ HCC)*10%

where
MISC = Monthly spending in all other essentials
Housing = Average monthly housing cost
CCC = Average monthly child care cost
FC = Average monthly food cost
TC = Average monthly transportation cost
HCC = Average monthly health care cost

Technical Notes for Economic Well-Being in Hawai‘i 13

Table 7. Estimated Monthly Miscellaneous Cost by Family Type and County, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
Year Honolulu Hawai‘i Maui Kaua‘i Honolulu Hawai‘i Maui Kaua‘i
2002 $253 $250 $282 $280 $279 $289 $327 $325
2003 $283 $269 $310 $284 $309 $312 $359 $331
2004 $303 $323 $323 $315 $331 $373 $373 $365
2005 $342 $303 $344 $325 $372 $351 $399 $375

Taxes

Taxes include the state general excise tax (GET), the federal Social Security and Medicare payroll
taxes, state income taxes, and federal income taxes. Unlike the sales tax in other states, Hawaii’s
GET is applied to all businesses in Hawai‘i and is a tax liability of individuals who conduct business.
The law does not require that the tax be passed on to the customer. In practice, businesses involved
in child care, medical services, and renting or leasing real estate tend not to collect GET from their
customers, while most other businesses in wholesale and retail do. Thus GET of 4.16% was
calculated only for food and miscellaneous expenses for the years 2002 to 2005.

Employees’ contributions to the federal payroll taxes for Social Security and Medicare were
calculated at 7.65% of each dollar earned for each year between 2002 and 2005.

State income taxes were calculated based on the N-11 forms, instructions, and related schedules for
2002-2005 from the Hawai‘i State Department of Taxation. Federal income taxes were calculated
based on 1040 forms, instructions, and related publications for 2002-2005 from the Internal
Revenue Service of the U.S. Department of the Treasury. For each family prototype, income taxes
were estimated after considering all applicable standard deductions, exemptions, non-refundable
tax credits, and refundable tax credits.

Table 8 lists the non-refundable and refundable tax credits for state and federal income tax returns.
Unlike non-refundable tax credits, which can only reduce tax owed to zero, refundable credits can
reduce tax owed below zero and result in a refund or net payment.

14 Aloha United Way

Table 8. Federal and Hawai‘i State Tax Credits, 2002-2005

Level Non-Refundable Tax Credits Refundable Tax Credits

Federal • a
Foreign tax credit • Earned income credit (EIC)
• Child and dependent care expenses (CDCE) • Excess social security and tier 1 RRTA tax
• Elderly or disableda withhelda
• Education creditsa • Additional child tax credit (ACTC)
• Retirement savings contributionsa
• Child tax credit (CTC)
• Adoption credita
State • Energy conservation tax credita • Low-income refundable tax credit (HI_LIR)
• Renewable energy technologies income tax • Credit for low-income household renters
credita (HI_LIHR)
• Child and dependent care expenses
(HI_CDCE)
• Child passenger restraint systema
• Credit for $1 general income tax (HI_GI)b
Notes: a Assumed to be zero for the prototype families in this study. b
A one-time tax credit for the year 2002
only.

The two prototype families were eligible for two non-refundable tax credits in the federal tax return,
Child and Dependent Care Expenses (CDCE) and Child Tax Credit (CTC). The federal CDCE tax credit
allows working parents to deduct a percentage of their child care costs from the income tax they
owe. The federal CTC, on the other hand, allowed families with qualifying children to deduct up to
$600 per child in the year 2002 and up to $1,000 per child for each year from 2003 to 2005. The
families were also determined for their eligibilities for the following refundable tax credits: (a)
Earned Income Credit (EIC) and Additional Child Tax Credit (ACTC) at the federal level and (b) Low-
Income Refundable Tax Credit (HI_LIR), Low-Income Household Renters Credit (HI_LIHR), CDCE, and
General Income Tax Credit (HI_GI) at the state level. The remaining tax credits listed in Table 8 were
assumed to be zero for the prototype families in this study.

For tax and tax credit estimations, we assumed that (a) single parents file as heads of household
and married couples file jointly for their income tax returns; (b) all adults are over 25 years of age
and are not qualifying children of another person; (c) the prototype families file resident income tax
returns and claim standard deduction rather than itemized deduction; (d) the only sources of
income are those wages, salaries, tips, etc. reported on the W-2 form; (e) the families have no
income adjustment and no other tax liabilities; (f) all family members are U.S. citizens or resident
aliens; (g) none of the family members is elderly or disabled; (h) the prototype families may be
eligible for tax credits for child and dependent care expenses, child tax, earned income, low-income,
low-income renters, and general income tax; and (i) the total income tax withholdings approximate
the amount of owed tax minus refundable tax credits and, therefore, a family’s tax refunds in any
specific year approximate zero.

Estimation of taxes and tax credits was based on family income, family type, number of children,
and other assumptions mentioned above. By definition, family self-sufficiency income must be able

Technical Notes for Economic Well-Being in Hawai‘i 15

to cover the sum of living expenses and tax liabilities. To fulfill this condition, the estimation of
taxes and tax credits are done via a series of iterations. The initial iteration took the total cost of
housing, child care, food, transportation, health care, and miscellaneous as the initial estimate of a
family’s earned income (SS_FEI1), based on which the applicable taxes and non-refundable and
refundable tax credits were calculated. If the sum of SS_FEI1 and refundable tax credits was unable
to balance the sum of total living costs and tax liabilities, the second iteration would take place
using a revised estimate of earned income (SS_FEI2 = SS_FEI1+taxes–non-refundable tax credits1–
refundable tax credits1) to re-estimate taxes and tax credits. The estimation iteration ended when
the assumed condition of self-sufficiency was met; i.e., total family income = total living expenses +
tax liabilities.

Based on the formulas below, taxes, refundable and non-refundable tax credits, and estimated self-
sufficient income were derived. Tables 9-1 through 9-4 show the resulting estimates for each county
for the years 2002-2005. Due to rounding and the fact that income taxes are calculated based on
income brackets, the monthly taxes and self-sufficient income estimates potentially have a margin
of error of ±$2. Information relating to tax credit estimation is provided in Appendix F.

SS_FEIi = (LV$*12+TAXESi–TC_NRFi–TC_RFi)
LV$ = Housing+CCC+FC+TC+HCC+MISC
TAXESi = GET_HIi+FICAi+$TAXi
GET_HI = GE_TAX_RATE*(FC+MISC)
FICAi = SS_FEIi*7.65%
$TAXi = $TAX _HIi+$TAX_FEDi
$TAX_HIi = Fn_Taxtable(TAXABLE$_HI)
$TAX_FEDi =Fn_Taxtable(TAXABLE$_FED)
TAXABLE$_HIi = SS_FEIi–SD_HI–EXP_HI
TAXABLE$_FEDi = SS_FEIi–SD_FED–EXP_FED
TC_NRFi = TC_NRF_FEDi+TC_NRF_HIi
TC_NRF_FEDi = CDCEi+CTCi, if $TAX_FEDi >= (CDCEi+CTCi)
TC_NRF_FEDi = $TAX_FEDi, if $TAX_FEDi < (CDCEi+CTCi)
CDCEi = Fn_CDCE(QP, CCC, SS_FEIi, $TAX_FEDi)
CTCi= Fn_CTC(QP, $TAX_FEDi, CDCEi)
TC_NRF_HI = 0
TC_RFi = TC_RF_FEDi+TC_RF_HIi
TC_RF_FEDi = EICi+ACTCi
EICi = Fn_EIC(SS_FEIi, EIC_Thresholds)
ACTCi = Fn_ACTC(SS_FEIi, CTCi, QP, $TAX_FEDi)
TC_RF_HIi = HI_LIRi+HI_LIHRi+HI_CDCEi+HI_GI
HI_LIRi = Fn_LIR(SS_FEIi, QP)
HI_LIHRi= Fn_LIHR(SS_FEIi, Rent, QP)
HI_CDCEi = Fn_CDCE(SS_FEIi, CCC, QP)
HI_GI = QP*1
Estimation iteration i = 1~N
SS_FEI1 = LV$*12

16 Aloha United Way

SS_FEIi+1 = SS_FEIi+(TAXESi–TC_NRFi–TC_RFi), if (LV$*12+TAXESi–TC_NRFi–TC_RFi)/SS_FEIi > 1,
else SS_FEI = SS_FEIi
where
SS_FEI = Annual family self-sufficient earned income
i = Estimation iteration index (i=1~N)
LV$ = Monthly basic living cost
TAXES = Annual sum of taxes
TC_NRF = Annual sum of non-refundable tax credits
TC_RF = Annual sum of refundable tax credits
Housing = Average monthly housing cost
CCC = Average monthly child care cost
FC = Average monthly food cost
TC = Average monthly transportation cost
HCC = Average monthly health care cost
MISC = Monthly spending in all other essentials
GET_HI = Annual sum of General Excise Tax on food and miscellaneous expenses
GE_TAX_RATE = Hawai‘i State General Excise Tax rate (4.16%)
FICA = Employee payroll taxes for Social Security and Medicare
$TAX = Total income taxes
_HI = Hawai‘i State
_US = US Federal
Fn_Taxtable = Amount of income tax owed in reference to the tax table
TAXABLE$ = Taxable income
SD = Standard deduction
EXP = Tax exemption
CDCE = Federal Child and Dependent Care Expenses Tax Credit
CTC = Federal Child Tax Credit
Fn_CDCE = Amount of CDCC in reference to related parameters
Fn_CTC = Amount of CTC in reference to related parameters
QP = Number of qualifying person(s)
EIC = Federal Earned Income Tax Credits
ACTC = Federal Additional Child Tax Credits
Fn_EIC = Amount of EIC in reference to related parameters
Fn_ACTC = Amount of ACTC in reference to related parameters
HI_LIR = Hawai‘i State Low-Income Refundable Tax Credit
HI_LIHR = Hawai‘i State Credit for Low-Income Household Renters
HI_CDCE = Hawai‘i State Credit for Child and Dependent Care Expenses
HI_GI = Year 2002 Hawai‘i State Credit for General Income Tax
Fn_LIR = Amount of LIR in reference to related parameters
Fn_LIHR = Amount of LIHR in reference to related parameters

Technical Notes for Economic Well-Being in Hawai‘i 17

Table 9-1. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits
by Family Type, Honolulu, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
2002 2003 2004 2005 2002 2003 2004 2005
Earned income $38,784 $42,835 $46,677 $54,161 $42,498 $46,275 $50,390 $57,893
Federal taxes
FICA $2,967 $3,277 $3,571 $4,144 $3,251 $3,540 $3,855 $4,429
Income tax $2,931 $3,501 $4,024 $5,069 $2,794 $2,986 $3,526 $4,539
Federal tax credits
CDCE -$960 -$1,260 -$1,200 -$1,200 -$960 -$1,200 -$1,200 -$1,200
CTC -$1,200 -$2,000 -$2,000 -$2,000 -$1,200 -$1,786 -$2,000 -$2,000
ACTC $0 $0 $0 $0 $0 -$214 $0 $0
EIC $0 $0 $0 $0 $0 $0 $0 $0
State taxes
GE tax $415 $435 $463 $486 $536 $560 $594 $619
Income tax $1,998 $2,306 $2,598 $3,182 $1,999 $2,273 $2,585 $3,155
State tax credits
LIR $0 $0 $0 $0 $0 $0 $0 $0
LIHR $0 $0 $0 $0 $0 $0 $0 $0
CDCE -$768 -$720 -$720 -$720 -$720 -$720 -$720 -$720
GI -$3 $0 $0 $0 -$4 $0 $0 $0

Table 9-2. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits
by Family Type, Hawai‘i, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
2002 2003 2004 2005 2002 2003 2004 2005
Earned income $39,227 $40,116 $45,042 $46,658 $45,826 $46,778 $51,888 $53,909
Federal taxes
FICA $3,001 $3,069 $3,446 $3,571 $3,506 $3,579 $3,969 $4,125
Income tax $2,999 $3,096 $3,776 $3,944 $3,296 $3,061 $3,751 $3,939
Federal tax credits
CDCE -$960 -$1,320 -$1,200 -$1,200 -$960 -$1,200 -$1,200 -$1,200
CTC -$1,200 -$1,776 -$2,000 -$2,000 -$1,200 -$1,861 -$2,000 -$2,000
ACTC $0 -$224 $0 $0 $0 -$139 $0 $0
EIC $0 $0 $0 $0 $0 $0 $0 $0
State taxes
GE tax $407 $419 $448 $456 $532 $548 $584 $595
Income tax $2,032 $2,097 $2,473 $2,598 $2,240 $2,311 $2,699 $2,855
State tax credits
LIR $0 $0 $0 $0 $0 $0 $0 $0
LIHR $0 $0 $0 $0 $0 $0 $0 $0
CDCE -$768 -$720 -$720 -$720 -$720 -$720 -$720 -$720
GI -$3 $0 $0 $0 -$4 $0 $0 $0

18 Aloha United Way

Table 9-3. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits
by Family Type, Maui, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
2002 2003 2004 2005 2002 2003 2004 2005
Earned income $44,542 $48,342 $50,658 $54,644 $51,933 $55,842 $58,390 $63,257
Federal taxes
FICA $3,407 $3,698 $3,875 $4,181 $3,973 $4,272 $4,467 $4,841
Income tax $3,794 $4,326 $4,624 $5,144 $4,211 $4,419 $4,726 $5,341
Federal tax credits
CDCE -$960 -$1,200 -$1,200 -$1,200 -$960 -$1,200 -$1,200 -$1,200
CTC -$1,200 -$2,000 -$2,000 -$2,000 -$1,200 -$2,000 -$2,000 -$2,000
ACTC $0 $0 $0 $0 $0 $0 $0 $0
EIC $0 $0 $0 $0 $0 $0 $0 $0
State taxes
GE tax $497 $519 $546 $561 $654 $680 $715 $735
Income tax $2,435 $2,724 $2,901 $3,217 $2,703 $2,999 $3,193 $3,565
State tax credits
LIR $0 $0 $0 $0 $0 $0 $0 $0
LIHR $0 $0 $0 $0 $0 $0 $0 $0
CDCE -$720 -$720 -$720 -$720 -$720 -$720 -$720 -$720
GI -$3 $0 $0 $0 -$4 $0 $0 $0

Table 9-4. Estimated Annual Self-Sufficient Earned Income, Taxes, and Tax Credits
by Family Type, Kaua‘i, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
2002 2003 2004 2005 2002 2003 2004 2005
Earned income $44,212 $43,307 $49,140 $50,920 $51,481 $50,589 $56,880 $58,635
Federal taxes
FICA $3,382 $3,313 $3,759 $3,896 $3,938 $3,870 $4,351 $4,487
Income tax $3,749 $3,576 $4,391 $4,581 $4,144 $3,631 $4,501 $4,651
Federal tax credits
CDCE -$960 -$1,200 -$1,200 -$1,200 -$960 -$1,200 -$1,200 -$1,200
CTC -$1,200 -$2,000 -$2,000 -$2,000 -$1,200 -$2,000 -$2,000 -$2,000
ACTC $0 $0 $0 $0 $0 $0 $0 $0
EIC $0 $0 $0 $0 $0 $0 $0 $0
State taxes
GE tax $497 $505 $542 $551 $653 $666 $711 $723
Income tax $2,408 $2,340 $2,785 $2,925 $2,668 $2,600 $3,079 $3,212
State tax credits
LIR $0 $0 $0 $0 $0 $0 $0 $0
LIHR $0 $0 $0 $0 $0 $0 $0 $0
CDCE -$720 -$720 -$720 -$720 -$720 -$720 -$720 -$720
GI -$3 $0 $0 $0 -$4 $0 $0 $0

Technical Notes for Economic Well-Being in Hawai‘i 19

ESTIMATES OF BASIC LIVING EXPENSES

The following tables present the estimated monthly living expenses by major-cost item, taxes, and
tax credits for each county for the years 2002 to 2005. Due to rounding, items in the tables may not
add up to their totals.

Table 10-1. Estimated Monthly Expenses by Family Type, Honolulu, 2002-2005

1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
Monthly Expenses 2002 2003 2004 2005 2002 2003 2004 2005
Housing $1,000 $1,250 $1,350 $1,703 $1,000 $1,250 $1,350 $1,703
Child care $721 $735 $759 $787 $721 $735 $759 $787
Food $578 $590 $624 $631 $795 $812 $858 $869
Transportation $41 $46 $60 $60 $68 $77 $100 $100
Health care $191 $204 $233 $243 $205 $220 $248 $259
Miscellaneous $253 $283 $303 $342 $279 $309 $331 $372
Taxes $693 $793 $888 $1,073 $715 $780 $880 $1,062
Tax credits
CDCE -$144 -$165 -$160 -$160 -$140 -$160 -$160 -$160
CTC -$100 -$167 -$167 -$167 -$100 -$149 -$167 -$167
ACTC $0 $0 $0 $0 $0 -$18 $0 $0
GI $0 $0 $0 $0 $0 $0 $0 $0
Self-Sufficiency Wage
• Hourly $18 $20 $22 $26 $10 $11 $12 $14
• Monthly $3,232 $3,570 $3,890 $4,513 $3,542 $3,856 $4,199 $4,824
• Annual $38,784 $42,835 $46,677 $54,161 $42,498 $46,275 $50,390 $57,893

Table 10-2. Estimated Monthly Expenses by Family Type, Hawai‘i, 2002-2005

1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
Monthly 1 School-Age Child 1 School-Age Child
Expenses 2002 2003 2004 2005 2002 2003 2004 2005
Housing $1,020 $1,100 $1,263 $1,293 $1,020 $1,100 $1,263 $1,293
Child care $597 $609 $629 $652 $597 $609 $629 $652
Food $560 $571 $604 $611 $770 $786 $831 $841
Transportation $186 $203 $212 $232 $373 $406 $424 $463
Health care $191 $204 $233 $243 $205 $220 $248 $259
Miscellaneous $255 $269 $294 $303 $296 $312 $339 $351
Taxes $703 $723 $845 $881 $798 $792 $917 $960
Tax credits
CDCE -$144 -$170 -$160 -$160 -$140 -$160 -$160 -$160
CTC -$100 -$148 -$167 -$167 -$100 -$155 -$167 -$167
ACTC $0 -$19 $0 $0 $0 -$12 $0 $0
GI $0 $0 $0 $0 $0 $0 $0 $0
Self-Sufficiency Wage
• Hourly $19 $19 $21 $22 $11 $11 $12 $13
• Monthly $3,269 $3,343 $3,753 $3,888 $3,819 $3,898 $4,324 $4,492
• Annual $39,227 $40,116 $45,042 $46,658 $45,826 $46,778 $51,888 $53,909

20 Aloha United Way

Table 10-3. Estimated Monthly Expenses by Family Type, Maui, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
Monthly 1 School-Age Child 1 School-Age Child
Expenses 2002 2003 2004 2005 2002 2003 2004 2005
Housing $1,100 $1,317 $1,349 $1,475 $1,100 $1,317 $1,349 $1,475
Child care $648 $661 $682 $707 $648 $661 $682 $707
Food $714 $728 $771 $779 $982 $1,002 $1,059 $1,073
Transportation $172 $195 $195 $239 $344 $390 $390 $478
Health care $191 $204 $233 $243 $205 $220 $248 $259
Miscellaneous $283 $311 $323 $344 $328 $359 $373 $399
Taxes $844 $939 $996 $1,092 $962 $1,031 $1,092 $1,207
Tax credits
CDCE -$140 -$160 -$160 -$160 -$140 -$160 -$160 -$160
CTC -$100 -$167 -$167 -$167 -$100 -$167 -$167 -$167
ACTC $0 $0 $0 $0 $0 $0 $0 $0
GI $0 $0 $0 $0 $0 $0 $0 $0
Self-Sufficiency Wage
• Hourly $21 $23 $24 $26 $12 $13 $14 $15
• Monthly $3,712 $4,029 $4,222 $4,554 $4,328 $4,653 $4,866 $5,271
• Annual $44,542 $48,342 $50,658 $54,644 $51,933 $55,842 $58,390 $63,257

Table 10-4. Estimated Monthly Expenses by Family Type, Kaua‘i, 2002-2005

1 Adult + 1 Pre-S chool Ch ild + 2 Adults + 1 Pre-School Child +
Monthly 1 School-Age Child 1 School-Age Child
Expenses 2002 2003 2004 2005 2002 2003 2004 2005
Housing $1,125 $1,100 $1,308 $1,368 $1,125 $1,100 $1,308 $1,368
Child care $611 $624 $644 $668 $611 $624 $644 $668
Food $714 $728 $771 $779 $982 $1,002 $1,059 $1,073
Transportation $166 $184 $195 $191 $331 $368 $389 $381
Health care $191 $204 $233 $243 $205 $220 $248 $259
Miscellaneous $281 $284 $315 $325 $325 $331 $365 $375
Taxes $836 $811 $956 $996 $950 $897 $1,054 $1,089
Tax credits
CDCE -$140 -$160 -$160 -$160 -$140 -$160 -$160 -$160
CTC -$100 -$167 -$167 -$167 -$100 -$167 -$167 -$167
ACTC $0 $0 $0 $0 $0 $0 $0 $0
GI $0 $0 $0 $0 $0 $0 $0 $0
Self-Sufficiency Wage
• Hourly $21 $21 $23 $24 $12 $12 $13 $14
• Monthly $3,684 $3,609 $4,095 $4,243 $4,290 $4,216 $4,740 $4,886
• Annual $44,212 $43,307 $49,140 $50,920 $51,481 $50,589 $56,880 $58,635

Technical Notes for Economic Well-Being in Hawai‘i 21

APPENDIX A
Primary Data Sources

Table A-1. Primary Data Sources by Cost Category

Cost Category Data Source

Housing Hawaii Information Service;
Prudential Locations, LLC
Child care Hawai‘i State Department of Education (DOE);
PATCH
Food Official USDA Food Plans
Health care Hawai‘i State Employer-Union Health Benefits Trust Fund (EUTF);
National Medical Expenditure Panel Survey (MEPS);
U.S. Office of Personnel Management
Transportation American Automobile Association (AAA);
Hawai‘i State Department of Business, Economic Development and Tourism (DBEDT);
Hawai‘i State Department of Commerce and Consumer Affairs (DCCA);
U.S. Department of Transportation
Taxes Hawai‘i State Department of Taxation;
U.S. Department of the Treasury

22 Aloha United Way

APPENDIX B
Child Care Cost Estimation, 2002-2005

Table B-1. Average Monthly Child Care Cost by Age Group and Geographic Area, 2005
Hawai‘I West Hawai‘i East Hawai‘i
Age Group Honolulu (WH+EH)/2 Maui Kaua‘i (WH) (EH)
3 to 4 years $518 $431 $463 $430 $474 $387
4 to 5 years $518 $419 $464 $435 $457 $381
5 to 10 years $520 $425 $463 $443 $426 $424
Source: Statistics on all types of child care from PATCH, 2005

Table B-2. Average Monthly Child Care Cost by Child Type and County, 2005

Child Type Age Group Honolulu Hawai‘i Maui Kaua‘i

Pre-school 3 to 5 years $518 $425 $464 $433
School-age 5 to 10 years $520 $425 $463 $443
Notes: Costs were derived from Table B-1. Costs for pre-school children were based on the average of age
groups 3-4 and 4-5.

Table B-3. A-Plus’s Monthly Fee by County, 2005

Child Type Honolulu Hawai‘i Maui Kaua‘i

School-age $55 $55 $55 $55
Source: DOE, 2005

Table B-4. Average Hourly Rate of Private Child Care by County, 2005

Child Type Honolulu Hawai‘i Maui Kaua‘i

School-age $3.00 $2.45 $2.67 $2.56
Note: Rates based on Table B-2.

Table B-5. Average Monthly Child Care Cost by Child Type and County, 2005

Child Type Honolulu Hawai‘i Maui Kaua‘i

1 pre-school child $518 $425 $464 $433
1 school-age child $269 $227 $244 $235
2 children (1 pre-school and
1 school-age) $787 $652 $707 $668
Notes: Child care cost for a pre-school child was based on full-time private care rate. For a school-age child, we
assumed the use of A-Plus and 2 hours/day private care for school days (9 months) and full-time private care
for school vacations and breaks (3 months).

Technical Notes for Economic Well-Being in Hawai‘i 23

Table B-6. Estimated Monthly Child Care Costs for a Pre-School Child and a School-Age Child
by County, 2002-2005

Year Honolulu Hawai‘i Maui Kaua‘i HCPI-W HCPI-W2005

2002 $720.52 $597.06 $647.77 $611.37 180.6 0.91582
2003 $735.28 $609.29 $661.04 $623.89 184.3 0.93458
2004 $758.82 $628.80 $682.21 $643.87 190.2 0.96450
2005 $786.75 $651.94 $707.31 $667.56 197.2 1.00000
Note: Costs for 2005 were deflated by the HCPI-W2005 to the costs for 2002-2004.
Sources: DBEDT’s State of Hawaii data book 2005; DOE, 2005; PATCH, 2005

24 Aloha United Way

APPENDIX C
Food Cost Estimation, 2002-2005

Table C-1. Monthly Food Cost by Family Type and District, 2003

Honolulu Hawai‘i Maui Kaua‘i

District District District District
Family Type 1 2 3 4 5 6 7 8 9
1 adult + 1 pre-school child
+ 1 school-age child $579 $579 $579 $579 $622 $499 $715 $715 $715
2 adults + 1 pre-school
child + 1 school-age child $796 $796 $796 $796 $856 $686 $983 $983 $983
Notes: District 1: East Honolulu, Waikīkī , and Urban Honolulu–Makai; District 2: Urban Honolulu–Mauka;
District 3: Central and Windward; District 4: North Shore, Wai‘anae, and Wahiawā; District 5: Kamuela, Kailua-
Kona, Waikōloa, Keauhou, Hōlualoa; District 6: Hawai‘i County, excluding District 5; District 7: City of Lahaina;
District 8: Maui County, excluding District 7; District 9: Kaua‘i County.
Source: Pearce & Brooks (2003)

Table C-2. Average Monthly Food Cost and Food Cost Ratio by Family Type and County, 2003

Family Type Honolulu Hawai‘i Maui Kaua‘i

a
1 adult + 1 pre-school child + 1 school-age child $579.0 $560.5 $715.0 $715.0
• Ratio1b 1.0000 0.9680 1.2349 1.2349
2 adults + 1 pre-school child + 1 school-age childa $796.0 $771.0 $917.0 $983.0
• Ratio2 b
1.0000 0.9686 1.2349 1.2349
a
Notes: Average monthly cost for each county was derived from its district average (see Table C-1).
b
Ratio1 and Ratio2 used the City and County of Honolulu as the benchmark.

Technical Notes for Economic Well-Being in Hawai‘i 25

Table C-3. Weekly and Monthly Food Cost by Age Group, Honolulu Metropolitan Area, 2002-2005

USDA Honolulu Monthly

USDA Honolulu Honolulu Honolulu Food Cost for an
Weekly Adjustment Weekly Monthly Individual in a 3-
Year Age Group Food Cost Factor Food Cost Food Cost Person Family (+5%)
2002 Pre-school (3-5 years) $22.40 143.70% $32.19 $139.38 $146.35
School-age $31.80 143.70% $45.70 $197.87 $207.76
• 6-8 years $29.80
• 9-11 years $33.80
Adult (male) $39.30 143.70% $56.47 $244.53 $256.76
Adult (female) $34.30 143.70% $49.29 $213.42 $224.09
2003 Pre-school (3-5 years) $22.80 143.70% $32.76 $141.87 $148.96
School-age $32.45 143.70% $46.63 $201.91 $212.01
• 6-8 years $30.40
• 9-11 years $34.50
Adult (male) $40.20 143.70% $57.77 $250.13 $262.64
Adult (female) $35.00 143.70% $50.30 $217.78 $228.67
2004 Pre-school (3-5 years) $24.30 143.70% $34.92 $151.20 $158.76
School-age $34.45 143.70% $49.50 $214.36 $225.07
• 6-8 years $32.40
• 9-11 years $36.50
Adult (male) $42.30 143.70% $60.79 $263.20 $276.36
Adult (female) $36.80 143.70% $52.88 $228.98 $240.43
2005 Pre-school (3-5 years) $24.40 143.70% $35.06 $151.82 $159.41
School-age $34.80 143.70% $50.01 $216.53 $227.36
• 6-8 years $32.70
• 9-11 years $36.90
Adult (male) $43.00 143.70% $61.79 $267.56 $280.93
Adult (female) $37.40 143.70% $53.74 $232.71 $244.35
Sources: Nord et al. (2005 & 2006); USDA low-cost food plan, 2002-2005

Table C-4. Estimated Monthly Food Cost by Family Type and County, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
Year Honolulu Hawai‘i Maui Kaua‘i Honolulu Hawai‘i Maui Kaua‘i
2002 $578 $560 $714 $714 $795 $770 $982 $982
2003 $590 $571 $728 $728 $812 $786 $1,002 $1,002
2004 $624 $604 $771 $771 $858 $831 $1,059 $1,059
2005 $631 $611 $779 $779 $869 $841 $1,073 $1,073
Notes: Costs in the Honolulu Metropolitan area shown in Table C-3 were assumed to approximate those of the
City and County of Honolulu. Food cost ratios shown in Table C-2 were applied to the estimates for the City and
County of Honolulu to obtain the estimates for other counties. It was assumed that food cost variation across
counties remained constant between 2002 and 2005.
Sources: Pearce & Brooks (2003); USDA, 2002-2005

26 Aloha United Way

APPENDIX D
Transportation Cost Estimation, 2002-2005

Table D-1. Bus Fare Chronology for the City and County of Honolulu
Monthly Pass
Effective Date Adult Youth
July 1, 2001 $27.00 $13.50
July 1, 2003 $30.00 $13.50
October 1, 2003 $40.00 $20.00
Source: DBEDT’s State of Hawaii data book 2005

Table D-2. Average Monthly Bus Fare for the City and County of Honolulu, 2002-2005

Year Adult Youth 1 Adult + 1 Youth 2 Adults + 1 Youth

2002 $27 $14 $41 $68
2003 $31 $15 $46 $77
2004 $40 $20 $60 $100
2005 $40 $20 $60 $100
Notes: Values were derived from the average cost of 12 monthly passes in any given year. The averages are
rounded to the nearest whole number.

Table D-3. Sample Annual Car Insurance Premiums by County, 2005

Provider Honolulu Hawai‘i Maui Kaua‘i

First Security Insurance of Hawaii, Inc. $724 $754 $626 $573
GEICO Indemnity Co. $692 $668 $651 $506
Government Employees Insurance Co. $470 $497 $476 $361
Hawaiian Insurance & Guaranty Co., Ltd. $616 $639 $596 $543
Average $626 $640 $587 $496
Source: Hawai‘i State Department of Commerce and Consumer Affairs (DCCA)

Table D-4. Estimated Annual Car Insurance Premiums by County, 2002-2005

Year Honolulu Hawai‘i Maui Kaua‘i HCPI-W2005

2002 $573 $586 $538 $454 0.91582
2003 $585 $598 $549 $463 0.93458
2004 $603 $617 $566 $478 0.96450
2005 $626 $640 $587 $496 1.00000
Note: 2002-2004 figures were estimated by deflating the 2005 figures with HCPI-W.

Technical Notes for Economic Well-Being in Hawai‘i 27

Table D-5. Estimated Annual Car Registration Fees and Taxes, 2002-2005
Registration Fees Passenger Vehicles Registration
Year
Receipts (in Thousands) Registered Fees/Vehicle
2002 $71,566 792,482 $90
2003 $77,952 830,672 $94
2004 $96,094 867,120 $111
2005 $108,453 906,799 $120
Sources: DBEDT’s State of Hawaii data book, 2002-2005; DOT’s Highway statistics, 2002-2005

Table D-6. Estimated Monthly Fixed Cost by County, 2002-2005

Year Honolulu Hawai‘i Maui Kaua‘i

2002 $55 $56 $52 $45
2003 $57 $58 $54 $46
2004 $60 $61 $56 $49
2005 $62 $63 $59 $51
Note: Monthly fixed cost was the sum of car insurance premiums (Table D-4) and car registration fees (Table D-
5), divided by 12.

Table D-7. Estimated Monthly Fuel Cost, Hawai‘i, Maui, and Kaua‘i Counties, 2002-2005

Highway Fuel
Consumption, Annual Gas Estimated Estimated Monthly
Gallons/ Gas Price % Annual Gas Fuel Cost/
Year County Vehicle Price/Gallon Change Changea Price/Gallon Vehicle
2002 Hawai‘i 563 88.63% $1.84 $86
2002 Maui 474 88.91% $2.01 $79
2002 Kaua‘i 443 88.91% $2.01 $74
2003 Hawai‘i 583 $2.08 90.08% $2.08 $101
2003 Maui 534 $2.26 88.59% $2.26 $101
2003 Kaua‘i 480 $2.26 88.59% $2.26 $90
2004 Hawai‘i 548 $2.31 87.18% $2.31 $105
2004 Maui 452 $2.55 89.24% $2.55 $96
2004 Kaua‘i 456 $2.55 89.24% $2.55 $97
2005 Hawai‘i 541 $2.65 100.00% $2.65 $119
2005 Maui 531 $2.86 100.00% $2.86 $127
2005 Kaua‘i 378 $2.86 100.00% $2.86 $90
a
Note: Values were based on the average % change of 2003 and 2004.
Sources: DBEDT’s State of Hawaii data book, 2002-2005; DBEDT’s weekly fuel price charts to June 25, 2006

28 Aloha United Way

Table D-8. Estimated Average Monthly Maintenance Cost, Hawai‘i, Maui, and Kaua‘i Counties, 2002-
2005
Miles of 2003 Cost-per-Mile HCPI-W Monthly
Year County Travel/Vehicle Maintenance Cost Adjustor Maintenance Cost
2002 Hawai‘i 9,733 $0.055 0.97992 $44
2002 Maui 8,958 $0.055 0.97992 $40
2002 Kaua‘i 10,292 $0.055 0.97992 $46
2003 Hawai‘i 9,726 $0.055 1.00000 $44
2003 Maui 8,952 $0.055 1.00000 $41
2003 Kaua‘i 10,291 $0.055 1.00000 $47
2004 Hawai‘i 9,729 $0.055 1.03201 $46
2004 Maui 8,941 $0.055 1.03201 $42
2004 Kaua‘i 10,287 $0.055 1.03201 $49
2005 Hawai‘i 10,043 $0.055 1.06999 $49
2005 Maui 10,932 $0.055 1.06999 $54
2005 Kaua‘i 10,066 $0.055 1.06999 $49
Source: DBEDT’s State of Hawaii data book, 2002-2005

Table D-9. Estimated Monthly Cost of Owning and Operating a Vehicle, Hawai‘i, Maui, and Kaua‘i
Counties, 2002-2005

Year County Fixed Cost Variable Cost Total Monthly Cost

2002 Hawai‘i $56 $130 $186
2002 Maui $52 $120 $172
2002 Kaua‘i $45 $120 $166
2003 Hawai‘i $58 $145 $203
2003 Maui $54 $142 $195
2003 Kaua‘i $46 $138 $184
2004 Hawai‘i $61 $151 $212
2004 Maui $56 $138 $195
2004 Kaua‘i $49 $146 $195
2005 Hawai‘i $63 $168 $232
2005 Maui $59 $180 $239
2005 Kaua‘i $51 $139 $191
Notes: Cost estimation based on data from Tables D-6, D-7, and D-8. Items may not add up exactly to their
totals due to rounding.

Technical Notes for Economic Well-Being in Hawai‘i 29

Table D-10. Monthly Private Transportation Cost by Family Type, Hawai‘i, Maui, and Kaua‘i Counties,
2002-2005

Year County 1-Adult Family 2-Adult Family

2002 Hawai‘i $186 $373
2002 Maui $172 $344
2002 Kaua‘i $166 $331
2003 Hawai‘i $203 $406
2003 Maui $195 $390
2003 Kaua‘i $184 $368
2004 Hawai‘i $212 $424
2004 Maui $195 $390
2004 Kaua‘i $195 $389
2005 Hawai‘i $232 $463
2005 Maui $239 $478
2005 Kaua‘i $191 $381
Note: Two cars are assumed for a 2-adult family.

Table D-11. Monthly Transportation Cost by Family Type and County, 2002-2005
1 Adult + 1 Pre-School Child + 2 Adults + 1 Pre-School Child +
1 School-Age Child 1 School-Age Child
Year Honolulu Hawai‘i Maui Kaua‘i Honolulu Hawai‘i Maui Kaua‘i
2002 $41 $186 $172 $166 $68 $373 $344 $331
2003 $46 $203 $195 $184 $77 $406 $390 $368
2004 $60 $212 $195 $195 $100 $424 $390 $389
2005 $60 $232 $239 $191 $100 $463 $478 $381
Sources: DBEDT’s State of Hawaii data book, 2002-2005; DBEDT’s weekly fuel price charts to June 25, 2006;
DCCA, 2005; DOT’s Highway statistics, 2002-2005

30 Aloha United Way

APPENDIX E
Health Care Cost Estimation, 2002-2005

Table E-1. Average Employee Contribution for Family Coverage by Employment Sector, State of Hawai'i,
2002-2005
State and Local
Government Federal Government
Private HMSA Kaiser Weighted
Year Sectora HMSA Kaiser Averageb (high) (high) Average Average
2002 $1,978 n/a n/a $2,682 $1,556 $1,708 $1,632 $2,066
2003 $2,048 $3,334 $2,819 $3,077 $1,743 $2,001 $1,872 $2,194
2004 $2,368 $3,605 $3,607 $3,606 $1,952 $2,252 $2,102 $2,541
2005 $2,455 $3,872 $3,868 $3,870 $2,138 $2,386 $2,262 $2,659
Estimated
no. of
465,623 88,600 31,450
employees
2004
Sector
weight 0.80 0.15 0.05 1.00
a
Notes: Private-sector rate for 2005 was obtained by inflating the 2004 rate by HCPI-W ratio of 2005 to 2004
(1.037). b The 2002 average for the state and local government employees was obtained by deflating the 2003
average with the proportion of federal rate change from 2003 to 2002 (0.872).
Sources: DBEDT’s State of Hawaii data book 2004; Hawaii State Employer-Union Health Benefits Trust Fund,
2003-2005; Medical Expenditure Panel Survey, 2002-2004; U.S. Office of Personnel Management, 2002-2005

Table E-2. Median Out-of-Pocket Medical Expenses by Age Group and Family Type, State of Hawai‘i,
2002-2005
Family With 1 Pre-School
Age Group Child and 1 School-Age Child
Year 0-4 5-17 25+ One Parent Two Parents
2002 $36 $33 $161 $231 $392
2003 $39 $37 $182 $258 $441
2004 $34 $37 $182 $252 $434
2005a $35 $38 $188 $262 $450
Note: a 2005 age-specific figures were obtained by inflating the 2004 figures with change in HCPI-W (1.037).
Source: Medical Expenditure Panel Survey, 2002-2004

Table E-3. Estimated Monthly Health Care Cost by Family Type, State of Hawai‘i, 2002-2005

1 Parent + 1 Pre-School Child + 2 Parents + 1 Pre-School Child +

Year 1 School-Age Child 1 School-Age Child
2002 $191 $205
2003 $204 $220
2004 $233 $248
2005 $243 $259
Note: Estimation based on Tables E-1 and E-2.

Technical Notes for Economic Well-Being in Hawai‘i 31

APPENDIX F
Tax Credits, 2002-2005

Table F-1. References Used in Tax Credits Estimation

Level Tax Credit Reference

Federal Child and dependent care expenses 1040 Instruction and Pub. 503
Child tax credit 1040 Instruction and Pub. 972
Earned income credit 1040 Instruction
Additional child tax credit Form 8812
State Low-income refundable tax credit Schedule X
Credit for low-income household renters Schedule X
Child and dependent care expenses Schedule X

Table F-2. Selected Parameters Relating to Federal Tax Credit for Child and Dependent
Care Expenses,a 2002-2005

2002 2003 2004 2005

Maximum Qualifying expense
1 child $2,400 $3,000
2 or more children $4,800 $6,000
Decimal amount For AGIb over-but not over For AGIb over-but not over
0.35 $0-$15,000
0.34 $15,000-$17,000
0.33 $17,000-$19,000
0.32 $19,000-$21,000
0.31 $21,000-23,000
0.30 $0-$10,000 $23,000-$25,000
0.29 $10,000-$12,000 $25,000-$27,000
0.28 $12,000-$14,000 $27,000-$29,000
0.27 $14,000-$16,000 $29,000-$31,000
0.26 $16,000-$18,000 $31,000-$33,000
0.25 $18,000-$20,000 $33,000-$35,000
0.24 $20,000-$22,000 $35,000-$37,000
0.23 $22,000-$24,000 $37,000-$39,000
0.22 $24,000-$26,000 $39,000-$41,000
0.21 $26,000-$28,000 $41,000-$43,000
0.20 $28,000-$No limit $43,000-No limit
Notes: a The tax credit for child and dependent care expenses equals the smaller of (a) maximum qualifying
expenses multiplied by decimal amount, or (b) federal income tax owed. b AGI stands for adjusted gross
income.

32 Aloha United Way

Table F-3. Selected Parameters Relating to Child Tax Credit,a 2002-2005

2002 2003 2004 2005

b
AGI Test
Married filing jointly $110,000 $110,000 $110,000 $110,000
Head of household $75,000 $75,000 $75,000 $75,000
Credit per Child $600 $1,000 $1,000 $1,000
a
Notes: Child tax credit equals the smaller of (a) federal income tax owed minus credits for federal child and
dependent care expenses or (b) if AGI is not more than AGI test, maximum credit equals the amount of credit
per child times number of children; otherwise, maximum credit equals the amount of credit per child times
number of children, minus 5% of the difference between AGI and AGI test, given that the final value is not
negative. b AGI stands for adjusted gross income.

Table F-4. Income Criteria for Earned Income Credit for a Family With Two Qualifying Children, 2002-2005

2002 2003 2004 2005

a
AGI Test
Married, filing jointly $34,178 $34,692 $35,458 $37,263
Head of household $33,178 $33,692 $34,458 $35,263
a
Notes: A family with two qualifying children may be eligible for earned income credit if AGI is less than AGI
test. AGI stands for adjusted gross income.

Table F-5. Selected Parameters Relating to Additional Child Tax Credit,a 2002-2005

2002 2003 2004 2005

b
TEI Test $10,350 $10,500 $10,750 $11,000
Factor 0.10 0.10 0.15 0.15
Notes: a Additional child tax credit is the smaller of (a) the maximum federal child tax credit minus claimed
child tax credit or (b) TEI minus TEI test multiplied by 0.10 for 2002 and 2003 and by 0.15 for 2004 and 2005.
b
TEI stands for taxable earned income.

Table F-6. Income Criteria for Selected Tax Credits in State of Hawai‘i, 2002-2005
AGI does
not
exceed
Low-Income Refundable Tax Credit $20,000
Credit for Low-Income Household Renters $30,000

Technical Notes for Economic Well-Being in Hawai‘i 33

Table F-7. Selected Parameters Relating to State Tax Credit for Child and Dependent Care Expenses,
State of Hawai‘i, 2002-2005

2002-2005
Maximum qualifying expense
1 child $2,400
2 or more children $4,800
Decimal amount For AGIb over-but not over
0.25 $0-$22,000
0.24 $22,000-$24,000
0.23 $24,000-$26,000
0.22 $26,000-$28,000
0.21 $28,000-$30,000
0.20 $30,000-$32,000
0.19 $32,000-$34,000
0.18 $34,000-$36,000
0.17 $36,000-$38,000
0.16 $38,000-$40,000
0.15 $40,000-$no limit
Notes: a Hawai‘i’s tax credit for child and dependent care expenses equals qualifying expenses multiplied by
decimal amount. b AGI stands for adjusted gross income.

34 Aloha United Way

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Hawai‘i State Department of Business, Economic Development and Tourism (DBEDT). State of Hawaii
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Hawai‘i State Department of Education. After-school plus program monthly fee, 2005.

Hawai‘i State Department of Taxation. N-11 forms and instructions, 2002-2005.

Hawai‘i State Employer-Union Health Benefits Trust Fund (EUTF). Monthly Insurance premium rates,
July 1, 2003-2005.

Nord, M., Andrews, M., & Carlson, S. (2005). Household food security in the United States, 2004.
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Nord, M., Andrews, M., & Carlson, S. (2006). Household food security in the United States, 2005.
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PATCH. Provider statistics, as of November 2005.

Pearce, D., & Brooks, J. (2003, April). The self-sufficiency standard for Hawai‘i. Prepared for the
Hawai‘i State Commission on the Status of Women.

Prudential Locations LLC. (2006, November). Rental and sales data for 2-bedroom apartments
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U.S. Bureau of Labor Statistics. Consumer expenditures reports. Consumer expenditures in 2004.

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U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality.
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36 Aloha United Way