Hawaii is finally starting to open again. Now what?
That was the question posed to me yesterday morning by Michael W. Perry, host of the hugely popular “Perry & The Posse” radio show on KSSK AM and FM.
Fortunately, I had exactly the right prescription. Or, more specifically, the right road map.
I had been invited onto Perry’s show to discuss the newest report from the Grassroot Institute of Hawaii, “Road map to prosperity: How Hawaii can recover and even excel after the coronavirus lockdown.”
We aren’t the only organization to put forth a recovery plan for the state. What makes us unique, however, is our approach. Our road map isn’t based on government programs and more spending, taxes or regulations. Instead, we want the government to remove existing barriers to entrepreneurship and prosperity.
As I explained to Perry: “Lawmakers need to create an environment to let Hawaii’s businesses thrive and let the businesses drive the recovery, not the government.”
This is a situation where our leaders in the Hawaii Capitol building can help best by getting out of the way. In our road map, we list dozens of ways that our state and county leaders can help Hawaii’s economy get back on its feet. For example:
>> Permanently exempt food and medicine from the state general excise tax.
>> Delay or suspend tax and fee collections for local businesses.
>> Consider a temporary reduction in the general excise tax, the transient accommodations tax and other taxes that burden the retail, restaurant and tourism sectors.
>> Defer occupational licensing renewal requirements across the board, not just in medicine but in any licensed occupation, including continuing-education requirements, for at least six months, unless those requirements can be satisfied online.
>> Remove county zoning and licensing restrictions on home-based businesses, and state restrictions on cottage foods.
>> Roll back the strict regulations and harsh fines that shut down most of the transient vacation rentals in the state.
>> Solicit input from local businesses, both large and small, about regulatory reforms that would help them reach new customers and save their businesses, such as lifting restrictions on direct-to-customer sales for distillers.
>> Encourage more housing development by expanding urban boundaries, reforming zoning laws on existing urban land and streamlining the permitting process.
State and county leaders do need to make tough decisions when it comes to budgets and spending. Hawaii is facing a severe budget shortfall, and previous levels of spending will be unsustainable. Some leaders are hoping the federal government will bail us out; others would like us to borrow to shore up the state’s finances.
But that’s not the responsible way to deal with a looming budget crisis. That’s why the Grassroot Institute’s road map also includes suggestions for addressing state and county budget issues. Not only should we look at cutting department budgets by 10%, we should consider reforming the state pension system and creating a state spending cap with teeth.
As I explained to Perry, “When we don’t have the money, we have to budget and spend within our means. The worst thing we can do is go into debt that will be a greater burden upon our children and great-grandchildren.”
The institute’s “Road map to prosperity” might seem complex in a few places, but overall it’s based on a very simple idea: The more economically free Hawaii is, the more prosperous it will be.
Let’s work together to make Hawaii first in economic freedom, thereby lowering the cost of living and starting a new era of prosperity in our state.