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Thursday, February 1, 2024
Three Ways to Lower Hawaii's Cost of Living
By Keli'i Akina PhD @ 4:18 PM :: 1647 Views :: Development, Jones Act, Taxes, Cost of Living

Akina outlines on Perry program how to cut prices in Hawaii

from Grassroot Institute

How can lawmakers stop pricing Hawaii residents out of paradise? 

For starters, reduce housing regulations, support reform of the federal Jones Act and cut taxes.

That was the advice of Grassroot Institute of Hawaii President Keli‘i Akina, who spoke last Thursday with KSSK-FM radio host Michael W. Perry on the “Perry & The Posse” program.

About housing, Akina said “for the longest time, we’ve been blaming the wrong reason” for the state’s housing shortage, “so we’ve been chasing the wrong solutions.”

He said land scarcity is not the problem, nor are outsider buyers. Instead, Hawaii has the nation’s most burdensome housing regulations, and that should be our focus.

Akina said the good news is that “a whole bunch of legislators have figured out that it’s the regulations that have to be dealt with, and there are at least 15 measures that are moving now in the House and the Senate that will help pull back some of those regulations.”

About the federal Jones Act — which restricts shipping competition to Hawaii and costs local families at least $1,800 a year — Akina said the good news there is that other states, such as New Hampshire and Wisconsin, are starting to realize how damaging the law can be.

“Now that other states are starting to speak up, … what we need is the Hawaii congressional delegation, as well as Hawaii state legislators, to speak up and tell the federal government we need change,” he said.

About taxes, Akina said Grassroot will “be on the front lines opposing” all new tax-hike proposals in the 2024 Legislature. But he also gave a nod to Gov. Josh Green, who has proposed $87 million in tax relief through indexing the state’s income tax to inflation and increasing the tax credit for childcare.


1-25-24 Keli‘i Akina with KSSK radio host Michael W. Perry

Michael W. Perry: It’s time for us to find out from the guy who knows more. This is one of the smartest people I know, you’re about to meet. His name is Keliʻi Akina — Dr. Akina. 

He runs the Grassroot Institute, which is a think tank. Maybe, maybe the only think tank — maybe the only thinking going on in the state of Hawaii about where we need to go and what we need to do.

Keliʻi, good to have you on the program again. I wonder if I can …

Keli‘i Akina: Good morning, Michael, always good to be with you.

Perry: I know. Well, we love it because you can straighten out a whole lot of things for us. We’ve been talking on this program for quite a while about job [No.] one for the Legislature, which has just started the session.

Job one this year — I know they have to take care of Maui and all that, obviously — but job one: Stop pricing us all out of paradise. 

And we’ve talked about the three components of that — basically housing; Jones Act — that requires a little help of our congressional folks; and cutting taxes. 

Can you briefly tell our legislators — who are listening but never admit it — why those changes would work, how to do it, and add anything of your own?

First of all, am I right about this?

Akina: Absolutely. In fact, Mike, can I start off with housing? 

Perry: Yeah, please. 

Akina: Yeah. Yeah, for the longest time, we’ve been blaming the wrong reason for housing, and so we’ve been chasing the wrong solutions. 

Our housing crisis is not caused because of a shortage of land — we build on only 5% of the land in Hawaii — and it’s not caused by foreigners and mainlanders coming here and buying up all the houses.

It’s caused by regulations that the government imposes upon us when we’re trying to build or when we’re trying to alter our structures or whatever it may be. In fact, studies have shown that Hawaii is the most regulated state in terms of housing in the entire nation. 

And so, there’s good news this legislative session. A whole bunch of legislators have figured out that it’s the regulations that have to be dealt with, and there are at least 15 measures that are moving now in the House and the Senate that will help pull back some of those regulations. 

That could make a huge difference — in fact, that would make the biggest difference of all.

Perry: Now, are the radical environmental groups going to oppose those?

Akina: Of course. We all do our job. And we contribute to the diversity of ideas in the marketplace of competitive ideas. 

But I think that good thinking is going to prevail because we’ve got to study that shows the research results, and a lot of legislators are actually out there trying to fix this problem. 

By the way, it’s election season, so we’re gonna try to help them look good by giving them good solutions to promote.

Perry: [laughter] Uh, good idea. That’s self interest for sure. OK, what about Jones Act, which raises the price of everything that gets here?

Akina: You’re right, Mike, you’ve talked about this a long time — probably since the 1920s. [laughter] 

The cost of the Jones Act in Hawaii is over $1,800 [per year] — last time it was checked — for every single family here, and that’s huge because today we see exactly what you’re talking about: We’re being priced out of paradise. 

And we would not only benefit from reduction of costs if we modified or got rid of the Jones Act; we would actually be able to do our shipping more efficiently. 

Some good news is this: There are states other than Hawaii that are now speaking out about changing the Jones Act. And that’s so important because this is a federal law. 

We saw the New Hampshire legislature debating a resolution calling on Congress to repeal the Jones Act since it raises the cost of energy for the folks in the Northeast, and those costs have gone through the roof with the kind of weather they’ve had lately.

And we saw an excellent analysis produced by a group of Wisconsin people about the cost of the Act for consumers in Wisconsin. 

And so the point is: Now that other states are starting to speak up, it’s not just Hawaii and Puerto Rico. What we need is the Hawaii congressional delegation, as well as Hawaii state legislators, to speak up and tell the federal government we need change.

Perry: Quick. And quick. Third thing: cutting taxes.

Akina: Well, first of all, a bunch of tax increases have been proposed, as usual, for this legislative session. 

Like a new carbon tax — I know you’ll like that one, Mike; and a higher conveyance tax for homes worth more than $4 million or so — and I’m sure you’re in that category too. [laughter]

But as usual, we’ll be on the front lines opposing these and other tax increases. And we actually, we have an ally. 

Whenever the governor does something good, I want to shout it from the rooftops. Gov. Green has introduced a bill that would save taxpayers about $87 million. Part of the measure would be to increase the tax credit for childcare, which would help lower income families. We can use that. 

And the governor’s bill would also index Hawaii’s income tax to inflation, so Hawaii taxpayers won’t get pushed into the higher tax brackets just because they get a raise to keep up with our ever increasing cost of living. 

Now, we can’t do everything that needs to be done about inflation; that’s a federal issue. But we certainly can call upon our congressional delegation to do the right thing and not to measure their success by how much money they bring to Hawaii.

Perry: Boy, we don’t hear enough from them about the important stuff. And the important thing is: Stop pricing us out of paradise. Everybody can do their share here. 

Dr. Keliʻi Akina, Did I get that right?

Akina: Absolutely,


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