This commentary was published originally in The Maui News on June 23, 2020.
Maui is slowly getting back to business after the COVID-19 lockdown, but for residents who are surveying the economic damage, there is a serious question to be addressed.
Can the economy be “restarted” effectively? After all, an economy doesn’t come with an “on” and “off”switch.
Some are saying that Hawaii’s economy will never be the same again — an obvious comment that isn’t particularly helpful to those charged with helping Maui recover.
Of course things won’t be the same after the pandemic and shutdowns. Look what has happened to our economy. Tourism is nearly nonexistent. Unemployment is at a record high. Beloved local businesses have shut their doors, possibly forever. The Brookings Institution ranked the Kahului-Wailuku-Lahaina area second in a national list of metro areas most vulnerable to recession, with 40 percent of its workforce in industries suffering most from the pandemic.
Recovering from the pandemic and lockdown will take time. Things won’t be the same.
But what if we could make things better?
As Hawaii struggles to restart the economy after the shutdown, many groups are embracing recovery plans that rely on increased government spending and debt. Only one group, the Grassroot Institute of Hawaii, has looked at the global correlation between economic freedom and prosperity and put forth a plan that would boost business, entrepreneurship and innovation in the state.
While others are depending on the government to solve our economic problem, Grassroot’s “Road map to prosperity” demonstrates that the government can help most by getting out of the way. That means reducing taxes, reducing regulation and following policies that will help lower the cost of living.
Because the “Road map to prosperity” looks to eliminate government barriers to economic growth, it is as applicable to the Maui County Council as it is to the state Legislature. The report recommends delaying or suspending tax and fee collections for local businesses, temporarily reducing the general excise tax and removing restrictions on home-based businesses. All of these are strategies that Maui County can pursue at the local level.
The county should also consider a temporary cessation of the excise tax surcharge and a reduction in county fees and taxes. Zoning restrictions and ordinances that restrict home-based businesses should be removed, so long as those businesses don’t disrupt the community. The harsh fines and penalties targeting transient vacation rentals should be rolled back. And the County Council should pledge that there will be no new taxes or fees for a minimum of two years.
What’s more, the County Council should listen to the businesses and entrepreneurs who will be rebuilding the local economy. Ask for input on reforms that might help them reach new customers or save their businesses. You might be surprised at how something as small as the interpretation of county liquor laws can make life harder for restaurateurs.
No, things will not be the same after the pandemic and shutdown. Our economy is not a lightbulb that can be flipped “on” and “off” with ease. But that doesn’t mean that county officials are powerless to help Maui businesses. In fact, if they follow the “Road map to prosperity,” they could help make Maui more prosperous than before.