Putting a price tag on the Akaka Bill

Passage of the Akaka Bill could cost the state of Hawaii as much as $689.7 million annually in lost revenues, according to a study being released Thursday by the Grassroot Institute, which opposes the measure.

The Native Hawaiian Government Reorganization Act of 2007 (S.310 and H.R.505) in the 110th Congress, also known as the Akaka Bill after sponsor Sen. Daniel Akaka, D-Hawaii, proposes to create a sovereign Native Hawaiian Governing Entity within the state of Hawaii. The bill stands its greatest chance yet of passage thanks to a Democratic majority in Congress and President-elect Barack Obama’s support.

A Grassroots Institute spokesman said this is the first study on the economic impacts of the proposed bill, which is expected to be re-introduced in the new session of Congress. It was co-authored by the Beacon Hill Institute.

"The Economic Impact of the Akaka Bill: Unintended Consequences for Hawaii is a straightforward look at how passage of the bill would hurt Hawaii business while pitting neighbor against neighbor," said Grassroot Institute President Jamie Story in a statement. "Regardless of one’s feelings about the Akaka Bill and its benefits or shortcomings, it is vital to examine the economic impact of the bill on Hawaii’s people. This study demonstrates the irreversible economic damage the Akaka Bill would do to Hawaii, and we hope Washington DC officials will take this into consideration.”

The group plans a news conference at 10:30 a.m. Thursday in front of the Queen Liliuokalani statue near the Capitol.

Lost revenues could come from the transfer of land to a Native Hawaiian governing group, taking land out of the state’s tax base, as well as the loss of excise and income taxes and land lease revenues, according to the study

Questions about the fiscal impact of the Akaka Bill surfaced Tuesday in a joint meeting of the state House Finance Committee and Senate Ways and Means Committee. The money committees were being briefed on the proposed $40 million operating budget of the Office of Hawaiian Affairs when Rep. Gene Ward, R-Hawaii Kai, asked about the fiscal impact if the bill passes.

OHA Administrator Clyde Namuo said a cost can’t be affixed to the bill, because the bill allows for many different scenarios.

The highest cost would come about if Native Hawaiians decided to set up reservations as a method of self-governance, where they would have their own government, including criminal and civil laws and the infrastructure to deal with it.

“It’s permitted in the bill, but if you ask me, do I think the Hawaiian people would want that, that is not my sense,” Namuo told the committees. “A system similar to Native Indian reservations is possible … I don’t think people would want that … but the bill allows that discussion to occur.”