The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Senate Committee on Government Operations on Jan. 28, 2025.
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Jan. 28, 2025, 3 p.m.
Hawaii State Capitol
Conference Room 225 and Videoconference
To: Senate Committee on Government Operations
Sen. Angus McKelvey, Chair
Sen. Mike Gabbard, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
TESTIMONY IN SUPPORT OF SB418 — RELATING TO REGULATORY SUNSET REVIEW IN HAWAII
Aloha Chair McKelvey, Vice-Chair Gabbard and other members of the Committee,
The Grassroot Institute of Hawaii would like to offer support for SB418, which would introduce a regulatory review program for the purpose of identifying which administrative rules should be retained, modified or repealed.
Administrative rules have a significant impact on life in Hawaii, governing everything from starting a business to seeing the doctor. According to the Mercatus Center, the Hawaii Code of Rules contained 108,741 restrictions and more than 6.4 million words as of 2023.
Despite its small size, Hawaii is the 28th most regulated state in the country. As regulations mount, they can become a burden to Hawaii residents and a drag on the state’s economy.
Heavy regulation is associated with higher prices and increased poverty. A study in Public Choice found that a 10% increase in federal regulation in a state is associated with a 2.5% increase in the poverty rate. Moreover, a separate analysis of the impact of regulation on consumer prices found not only that regulations promote higher consumer prices, but also that those price increases have a disproportionately negative effect on low-income households.
Mercatus Center researchers estimate in Hawaii alone, the growth in federal regulations between 1997 and 2015 has resulted in 17,028 additional people living in poverty, prices that are 7.35% higher, and 491 jobs being lost every year.
To put it simply, high regulation is especially damaging to the most vulnerable.
Currently, there is no mechanism to help reduce the amount of regulation in Hawaii, making it difficult to identify unnecessary, outdated, ineffective or burdensome rules. The sunset-review program outlined in this bill, SB418, would remedy that problem, allowing for a reasonable time to evaluate new and existing rules.
SB418 represents the kind of forward-thinking approach we need to boost the state’s economy and help reduce the cost of living for Hawaii families.
We urge the committee to pass SB418.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
