Thursday, August 11, 2022
Hawai'i Free Press

Current Articles | Archives

Sunday, December 30, 2012
Helping Hawaii to Help Itself
By Lowell L Kalapa @ 5:24 AM :: 5046 Views :: Economy

Helping Hawaii to Help Itself

by Lowell L. Kalapa, Tax Foundation of Hawaii

Now that Hawaii no longer has seniority influence in Washington, political observers have been trying to assess the impact that the loss will have on not only on state and county fortunes but also on the stability of Hawaii’s economic future.

Without someone who can deliver the bacon for Hawaii, those observers believe that the federal largesse for Hawaii will diminish quickly over the next year. Gone will be all of those earmarks of federal funds for this or that program, large appropriations for defense expenditures, and hundreds of millions of dollars for research grants and native Hawaiian programs. With years of seniority, the Congressional delegation could direct funding to Hawaii without question as support was garnered from those who also wanted handouts of federal funding in exchange for their support.

But, obviously, that will not be the case for a very long time as our young Congressional delegation will take years to gain seniority. Thus, the bottom line is that Hawaii stands to lose millions, if not billions, of dollars it has come to expect flowing from the Potomac to Waikiki Beach. Without those federal dollars, one has to wonder what our state economy will look like in a few short years.

As a result of being the beneficiary of such generous bounty from the federal government, Hawaii really has not had to face head on the fact that it is a poor place to do business. Public policymakers didn’t have to worry about business failures as there were always federal dollars to shore up a stumbling economic malaise. Those federal dollars plugged the “pukas” or shortcomings created by bad public policy and a plethora of government regulations that has made it costly and complex to do business in Hawaii.

Even now as we watch hotel occupancies rise and room rates recover to their pre-recession levels, hoteliers decry the fact that they are still not making money as the cost of doing business in Hawaii has reduced whatever profit margin they can realize to a razor-thin layer of the revenues they receive. Mirroring this wave of gross revenues are the state’s general excise tax collections which are the tax on gross income received. But again, that is a tax on the gross receipts of all businesses in Hawaii and does not reflect the costs incurred in producing the goods or services sold. On the other hand, corporate income tax collections continue to muddle along reflecting the fact that businesses are still trying to recover from losses incurred in the past three years.

Meanwhile, personal income tax collections seem to be racing ahead with a pace of 11.3% growth over collections of the last fiscal year. However, come 2013, it is expected that personal income taxes will take a hit as taxpayers begin to claim the generous solar tax credits. Collections are expected to drop by three to four percentage points as the refundable credit is claimed.

So the state will face a double whammy with the loss of the seniority in Congress and a poor business climate that cannot be bailed out with further infusions of federal aid. So what are local policymakers to do? If nothing else, local elected officials need to go back to the problem that has plagued the state since its admission as a state, improving the business climate. That means getting government out of the way, reducing and/or eliminating unnecessary regulations, streamlining the permitting process, and reforming the workers’ compensation laws. While it might be wishful thinking that lawmakers reduce the taxes already imposed, they should pledge not to increase the burden of taxes by either increasing rates or finding new ways to raise money.

Of course, this means that they must bite the bullet and reduce the number of programs and services government provides, scaling back government to only the truly essential services needed to preserve the health and safety of the community. While there will be constituents who may complain that the government will no longer provide a program or service, elected officials need to do a better job of juxtaposing the cost of those services against the need to raise more revenues with an increase in taxes.

The hard reality is that Hawaii can no longer be expected to be bailed out with an infusion of federal funds and elected officials must now face the hard reality that Hawaii must become more business friendly as it is businesses - entrepreneurs - who will create the jobs we need in the future. If Hawaii continues to remain hostile toward private entrepreneurship, then we call can kiss Hawaii’s future good-bye.

- 30 -

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Life Alliance

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT