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Friday, May 10, 2024
Akina lauds legislative gains, but Hamada has reservations
By Keli'i Akina PhD @ 4:35 AM :: 1318 Views :: Taxes

Akina lauds legislative gains, but Hamada has reservations

from Grassroot Institute of Hawaii, May 9, 2024

A “whopping” $1.3 billion. That’s how much Keli‘i Akina said Hawaii taxpayers will save in 2031, thanks to a bill passed by the state Legislature that is likely to be signed by Gov. Josh Green.

Appearing on KHVH News Radio 830 last Friday, the final day of the 2024 legislative session, the president of the Grassroot Institute of Hawaii told host Rick Hamada that he doesn’t always praise the Legislature, but “I’m gonna give some kudos for what they’re doing.”

Akina said “the tax cuts are gonna be huge in terms of keeping money in the pockets of people starting next year,” and he also appreciated the advances made in housing and healthcare reform. 

Hamada, however, was less enthusiastic.

“Keliʻi, that does nothing for the cost of bread,” Hamada countered. “To go to the grocery store and pay $200 for two bags of groceries, it doesn’t help people that have to make their rent every single month.

“I know, affordable housing,” he continued. “Who qualifies though? Not everybody. So you have a working class that is still confronting ridiculous amounts of cost and expense. The tax cuts — yes, I agree a thousand percent. I’ve been calling for that for three decades. But that’s not just it. There are the ancillary things that affect us every single day.The costs and expenditures [of living in Hawaii] don’t go down.”

Still, Hamada couldn’t dampen Akina’s exuberance. After telling Hamada he loved his  pushback, Akina agreed more needs to be done — “and we know that at the Grassroot Institute.”

However, he said, “each and every one of these advancements” in the areas of taxation, housing and healthcare “is a reverse of the direction that we have had in the state over the last decades, which is the increase of government regulation, making us the state in the nation that prevents economies for the people of Hawaii. And so now we’re going to be able to see some of the benefit of that. And we’re gonna keep pushing. At Grassroot Institute, that’s what we do.”

Hamada concluded: “The reduction of overall cost of living is the key to retention and growth. And I’m going to stand by and see what the impacts are of what’s transpired in this session. But future sessions, the patience has run out for a lot of us. And we’re going to turn to Grassroot and others to carry that banner.”

TRANSCRIPT

5-3-24 Keli‘i Akina with host Rick Hamada on KHVH News Radio 830

Rick Hamada: News Radio 830 KHVH. Dr. Keli‘i Akina joins us and he is in studio. Keli‘i, good morning to you.

Keli‘i Akina: Good morning Rick. What a wonderful day. The final day of the Legislature.

Hamada: I have some time remaining. I’m going to turn it over to you because it is the final day. Want to get your take through the eyes of Grassroot Institute. This session so far, final day, what do you expect?

Akina: This has been an exciting session for the consumer here in Hawaii. Everybody knows our cost of living is so high, but the Legislature has done some terrific things — both houses, Senate and the House of Representatives.

First, they have given the governor [Josh Green] a tax package which some are saying is historic — the biggest cuts in taxes in the history of Hawaii — and that’s really exciting. 

You know, a lot of people found that they actually were in a higher tax bracket because of inflation, but now House Bill 2404, which is called the Green Affordability Plan, is going to make it possible for taxes to come down, and that’s good news for everybody.

It’ll save taxpayers more than $220 million starting in 2025, and [in] 2031 it will save us a whopping $1.3 billion. That’s never happened before. People who found themselves in a high tax bracket have some relief now.

Currently the first bracket is $4,800. By 2028 that will be $38,400. So, Rick, kudos to the governor and to the legislators for the tax relief, which is just unheard of. It’s a great victory here in Hawaii.

Hamada: So the counter to that would be: How are they going to make up the revenue?

Akina: Well, you know, that is actually the key to revenue. There’s something called the Laffer Curve, and it’s really simple. It tells us that when people are taxed less, they have more money to spend.

Hamada: Um-hmm.

Akina: Businesses can invest more money, and as a result, the economy grows, income to the government goes up. So you get more tax revenues actually by cutting taxes, and we’re gonna see that happen. In fact, the governor has said he’s gonna have a report produced by UHERO [Economic Research Organization at the University of Hawaii] to show the benefits of these tax cuts.

But housing, Rick, that’s been a problem, hasn’t it, here in Hawaii? 

Hamada: Um-hmm.

Akina: And some good things have happened this legislative session in terms of housing.

Senate Bill 3202 passed, and that allows more ADUs. In general, people can have up to two ADUs, accessory dwelling units. That means grandma, grandpa, your children can live in that spare space on your lot. That’s an exciting advance.

Another advance was the adaptive-reuse bill. That means it’s going to be a lot easier to take some of the old dilapidated business buildings which are starting to get vacant and convert them to housing. So this is a real win for the needs of Hawaii’s people in terms of the cost of living.

Hamada: Talking with Dr. Keliʻi Akina. It is the final day of session. Given that it is the final day, are you anticipating any surprises? 

I was just talking about the HECO [Hawaii Electric Co.] bailout bill. Do you know exactly what the status is as of today? Is it still mostly dead or is it actually off the table?

Akina: Well, you know, Rick, you’ll never know until the final bell rings. 

Hamada: I know. But what do you hear from your sources?

Akina: I am hearing that this may be good for the people of Hawaii, but we’ll have to see until the final bell is rung.

Hamada: So in other words, the death of that — the HECO bill, bailout bill — would be in the best interest for the people of the state?

Akina: Rick, I’m not following that bill myself.

Hamada: OK. No. Understand, understand. But it was very top of mind in discussions because of the implications of the prevention of bankruptcy. But we’ve had that experience in California and nobody lost power. So it’s going back to the people of a 5% surcharge on their HECO bill to go directly to the defense fund. 

Akina: Yes.

Hamada: And, yes, our cost — and that’s a question I have for you and thank you for the updates initially — but one of the things, it’s our economy, itt’s the cost of living. I have not heard anybody in the big square building talk about cost of living directly. They’re alluding to it via affordable housing and some other areas, but in the very basic fundamentals of cost of living, have we seen anything emerge out of this session?

Akina: Well, I have to say this: The magnitude of the tax cut bill, when the governor signs it, will have a huge impact for the people of Hawaii. It’s the biggest tax cut they’ve had.

We’re talking about thousands of dollars starting next year, 2025, for the average taxpayer here in the state.

And the other bill that has passed, the accessory dwelling unit, along with the adaptive reuse of old business buildings, those are going to increase the supply of housing. That is the biggest cause for the cost of living.

Hamada: Keliʻi that does nothing for the cost of bread, to go to the grocery store and pay $200 for two bags of groceries. It doesn’t help people that have to make their rent every single month. I know affordable housing. Who qualifies though? Not everybody. So you have a working class that is still confronting ridiculous amounts of cost and expense.

The tax cuts — yes, I agree, a thousand percent. I’ve been calling for that for three decades. But that’s not just it. There are the ancillary things that affect us every single day. 

And the institution of those [tax] cuts on a graduated pace to 2031 at some point will have a significant … but the costs and expenditures don’t go down. And that’s what I’m curious about.

Regulation and the cost of housing that can be upwards of 38%. UHERO, things of that nature. Help me understand where the prioritization is in the big square building.

Akina: Well, I love your pushback, and I am looking at the optimistic side of it. I’m looking at what has been done in terms of housing and taxes. Those are huge. I’ll have to argue that, and the numbers that will look at that, will show it’s gonna be a big savings for Hawaii’s people. 

But you are right. Costs are still going up. Inflation is something we have no control over here. We’re gonna have to look to bolstering the efforts of our congressional delegation, because this is a national issue. And more than that we’re gonna have to build the economy.

But I think we’re off to a better start than we could have anticipated this legislative session with the housing and the taxes. And that will eventually result in a better economy that will allow us to have the revenues people need in order to afford being a resident of the state of Hawaii.

But I’ll say this: There’s a lot more work for all of us to do, and we know that at the Grassroot Institute.

We are regrouping, now that we’ve experienced some victories in these bills, and we’re looking forward to moving forward at the county level where things like property taxes need to be looked at. 

And we’re looking forward as well to diving into issues that have to do with everyday costs, including electricity. And we do that as the independent institute, the Grassroot Institute, for Hawaii’s people.

Hamada: We’re at the highest in the nation, kilowatt hours. We hover around 47 to 49 cents per kilowatt hour. Las Vegas, 14 cents. The disparity amongst the mainland vis-a-vis our home, and now I refer back to that HECO bill. You put another 5% onto that. You have people that have electric bills for a small … 

I have a condo. A condo. What do I do? $221 a month. I have friends that have homes where they have multiple generations, because that’s the way people have to live here. They have utility bills that upwards of a thousand dollars a month, and that proposal to try and increase it.

I’m celebratory, as with you. Take the wins, win the battle. What about the war though?

And I want no less than to have a concerted effort by us all to address, gosh, what affects families every single day. And I’m prayerful that that’s gonna manifest itself.

But I know, I went shopping last night, I got four bags of groceries at Walmart, $192. I don’t buy crazy all kinds of top shelf and wine and all this. I’ve stopped buying wine. I have to. It’s just, you have to just focus on every little dollar these days.

And I’m just prayerful that what you’re espousing is going to come true, but that we continue to reduce.

Akina: Well, I’m in complete agreement with you. As you know, we have a massive exodus from our state.

Hamada: Yes, we do.

Akina: We have one of the highest rates of people leaving. But as we have analyzed that, not only is it the case that the majority say it’s because of the cost of living, they say that the biggest factor to them in the cost of living is the cost of housing. And so I’m gonna give kudos out …

You know, I don’t always praise the Legislature. You know that. I’m gonna give some kudos for what they’re doing in terms of housing and opening up the possibilities that can be there when we cut back regulations that prevent that. And every morsel we get we can transform into a loaf of bread.

I think that the tax cuts are gonna be huge in terms of keeping money in the pockets of people starting next year, and so they can actually spend that money. And, Rick, actually I’m hoping they can spend it on wine too, and I’ll toast you there.

Hamada: Well, they better have an Uber account. But don’t drink and drive.

Akina: There you go. But I love your passion.

Hamada: It’s been billed … I mean, I’m just a guy. I’m blessed to have a microphone. But I’m just a guy out there. I got two kids in college. I make X amount of dollars. I wanna provide the very best that I can.

And I’m precluded to doing so when I see incredible amounts of waste, when I see expenditures in the hundreds of millions and millions of dollars, when I see the exclusion of those in the middle.

If you’re destitute and poor and you can’t … OK, God bless you, you’re doing the best you can, but there’s an outpouring of our revenues and our resources to a select class because we don’t reach a minimum income level.

If that level is $48,500 a year for a single person, if you make $48,501, then you’re excluded from all the assistance and help that collectively we pay. 

And I guess I’m just going for the regular guy and gal that has a family and that works their butts off every single day, and at the end of the month you do your balance sheet and you go, “Aww, man.” And that’s kind of where I’m at. So.

Akina: You know, Rick, costs come from everywhere, and we don’t have time today to look at every measure that the Legislature passed. But one which is very significant is the bill that removes the GET [general excise tax] surcharge on Medicare, Medicaid and TRICARE. And in our aging population here in Hawaii, medical costs are huge. That’s going to save a lot of money for people.

In addition to that, we have finally passed a bill that is going to allow nurses to have up to six months to come here from other states, without having to be licensed, so that they can get into the economy and they can help fill the gap we have with nurses. Last session, a law for doctors from other states to come here was also passed. 

Each and every one of these advancements is a reverse of the direction that we have had in the state over the last decades, which is the increase of government regulation making us the state in the nation that prevents economies for the people of Hawaii. 

And so now we’re going to be able to see some of the benefit of that. And we’re gonna keep pushing. At Grassroot Institute, that’s what we do. We go after these regulations and we go after them in a way that can pull them back so we can afford being in Hawaii.

Hamada: We’re ranked the last state in the Union for nurses. Why is that? Because of our living conditions. Too expensive to live, too expensive for transportation, too expensive, too expensive.

The reduction of overall cost of living is the key to retention and growth. And I’m going to stand by and see what the impacts are of what’s transpired in this session. But future sessions, the patience has run out for a lot of us. And we’re going to turn to Grassroot and others to carry that banner.

Dr. Keliʻi Akina, we always thank you for your time.

Akina: Thank you, Rick. Grassrootinstitute.org.

Hamada: Absolutely. Thank you so much.

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