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Tuesday, March 26, 2024
Exodus to Mainland: State Loses $185M Tax Revenue
By News Release @ 6:39 PM :: 1395 Views :: Hawaii Statistics, Taxes, Cost of Living

EXODUS OF HAWAI‘I RESIDENTS RESULTS IN $185 MILLION IN LOST TAX REVENUE TO THE STATE 

News Release from PRP, March 26, 2024

HONOLULU, HI – The continuing exodus of Hawai‘i residents has many detrimental impacts to the state, including the loss of our young people, the erosion of our host culture, and the separation of family and friends. However, the financial implications of outmigration on Hawai‘i’s tax base has been largely unknown, that is until now.

Working in conjunction with the Hawai‘i Department of Taxation, Pacific Resource Partnership obtained approximate data on how much the outmigration of local residents has cost the state, and the numbers are startling.

According to Seth Colby, Department of Taxation research and planning officer, outmigration since 2020 has resulted in the loss of $185 million in general excise taxes and state income taxes, or approximately $61.8 million per year. To place that amount into context, one percentage point of the Council on Revenues forecast, which determines how much can be spent on the state budget, represents approximately $100 million.         

“We know one of the main drivers leading people to leave Hawai‘i is the high cost of housing,” said PRP Interim Executive Director Josh Magno. “That is why Pacific Resource Partnership continues to advocate for policies and legislation that will lead to the construction of more affordable and workforce housing, which includes the utilization of general excise tax exemptions that assist developers in the creation of viable projects that actually ‘pencil out.’”   

According to data reported by the state Department of Business, Economic Development and Tourism, between 2020 and 2021, Hawai‘i experienced an estimated net loss of 9,932 individuals when contrasting the influx of residents from the U.S. continent with the exodus of Hawai‘i residents. This trend intensified during the peak of the COVID-19 pandemic, with a net departure of 15,664 people from 2021 to 2022. Subsequently, between 2022 and 2023, the state saw a further decrease, with 11,193 individuals departing Hawai‘i.

Pacific Resource Partnership hopes that by highlighting the detrimental impacts that outmigration has on the state’s tax base, policymakers will be more willing to consider legislation that provides general excise tax exemptions for developers as a possible solution to the construction of new housing, rather than seeing it as a drain on state coffers.

“Developers will not build new housing for Hawai‘i’s people if their efforts are not supported by state government, which includes financial backing in the form of GET tax exemptions,” said PRP Government Relations Manager Chris Delaunay. “By keeping our residents in Hawai‘i, we not only preserve our culture and our families, we also keep our tax base strong to fund all of the programs our residents depend on.”

Quick Facts

  • Since 2020, the exodus of Hawai‘i residents has cost the state $185 million in lost GET and personal income taxes, according to data provided by the Hawai‘i Department of Taxation.
  • It’s estimated that since 2020, a total of 36,789 Hawai‘i residents left the state.
  • The high cost of housing is one of the leading factors why local residents chose to leave Hawai‘i for the U.S. continent.

# # # 

KITV: Exodus of Hawaii residents cost the state $185 million in tax revenue

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