Grassroot Institute details how to rescue Hawaii’s economy

This is a news release that was issued by the Grassroot Institute of Hawai on May 22, 2020.

The institute urges best practices for a successful recovery

HONOLULU, May 22, 2020 >> The Grassroot Institute of Hawaii today published a new policy brief, “Road map to prosperity,” that offers almost two dozen proposals regarding how Hawaii can recover and even excel after the state’s economically devastating coronavirus lockdown.

As the document states, Gov. David Ige and the state’s four county mayors were able to shut down Hawaii’s economy quickly in early March, “but restarting it is a different matter. It is not as simple as flipping on a switch. Even with the best of intentions, our state and county governments do not have the resources or ability to bail out every business or family in the state. Nor is it possible to manage away all health and safety risks.”

Urging Hawaii policymakers to “focus on the fundamentals,” the brief lists almost two dozen policy options that could help get people back to work in Hawaii, covering economic opportunity, healthcare, transportation and the state budget.

It challenges the many calls for greater government spending, borrowing and taxing, reminding that all such practices ultimately fall on taxpayers, whether now or in the future.

Acknowledging the calls for greater economic diversification, the policy brief states: “The reality is that tourism will always be an essential part of Hawaii’s economy. Thus, the regrowth of the industry must occur with the input of both the large and small businesses that rely on tourist dollars.

“Along the way, the governor, Legislature, mayors and county councils should roll back the many laws and regulations that stifle the industry, from high taxes and excessive regulations aimed at the industry generally to the draconian rules and fines aimed specifically at short-term vacation rentals.

“The biggest hurdles for the tourism industry right now are the 14-day quarantine and widespread fear of tourists being possible carriers of the coronavirus. But at some point, Hawaii residents will need to accept the risks of welcoming visitors back to the islands, and whenever that happens, lawmakers should get out of the way and allow the vacation industry to pursue its own strategies to attract customers.”

Other policy recommendations include:

>> Cut nonemergency state spending and department budgets by at least 10%.

>> Defer discretionary public construction projects.

>> Lower barriers to the use of private contractors for the delivery of public services and nonunion contractors on public works projects.

>> Reform the state’s public pension system.

>> Create a state spending cap protected by a vote of the people.

>> Reject any new taxes or fees, including tax or fee increases, for at least two years, at both the state and county levels.

>> Permanently exempt food and medicine from the state general excise tax.

>> Exempt healthcare providers and services from the state general excise tax.

>> Make permanent the emergency measures that expanded telehealth and allowed out-of-state doctors to practice in Hawaii. Consider expanding them to include other medical professionals.

>> Encourage more housing development by expanding urban boundaries, reforming zoning laws on existing urban land and streamlining the permitting process.

>> Enact tort reform to protect businesses during the reopening period.

>> Create a semi-independent airport corporation to manage the state’s airports system.

>> Urge Congress to reform the Jones Act by modifying the U.S.-build requirement.

>> Pause construction of the Honolulu rail for a thorough cost-benefit evaluation.

In the short run, these and other policy recommendations presented by the institute would help revitalize Hawaii’s economy quickly, while in the long run they would help it excel.

As the policy brief states:

“The coronavirus pandemic and accompanying shutdowns have created a difficult challenge for Hawaii policymakers. But there is a clear road map, based on historical precedent and best practices, that can put Hawaii back on the road to a strong, healthy and vibrant recovery. All that is needed is for policymakers to embrace the principles of economic freedom.”

To learn more about the report, or arrange an interview with Keli’i Akina, institute president, contact 808-591-9193 or info@grassrootinstitute.org.

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