Clearly, the top priority for the 2010 legislative session is the economy. If we want to attempt quickening an anticipated slow economic recovery, politicians will have to be willing to risk by going against the grain and challenging the status
Clearly, the top priority for the 2010 legislative session is the economy. If we want to attempt quickening an anticipated slow economic recovery, politicians will have to be willing to risk by going against the grain and challenging the status quo. As a local girl, born and raised in Hawai‘i, it can be very challenging as our culture does not usually embrace conflict. Often times we see rigorous debate as disrespect which in turn makes the political environment comfortable with more of the same.
The economy is expected to take awhile to recover. Although it is extremely hard to reduce the size of government, I believe we do not have much of a choice. Hawai‘i’s state government has to spend within our means. When state tax collections are down that means the private sector is making less money. I believe raising taxes will slow Hawai‘i’s economic recovery. We have to find ways to ease the burdens on the private sector so that businesses begin to expand and hire employees again.
That will eventually reduce our unemployment numbers, increase state tax revenue without raising tax rates, mitigate the looming problems with our unemployment insurance fund, get more people back their health care benefits through employment, and provide funding for priority services offered by government. This one issue — investment and stimulating hiring growth in the private sector — will require law changes in many areas of state government.
How do you ease the burden on the private sector to increase employment? Typically, you create a business-friendly climate conducive to growth and profitability. Although this Administration made great strides in this area, Hawai‘i is still perceived worldwide and struggles with the label of an unfriendly place to do business. According to various comparative business indices, like the Small Business Survival Index 2009, Hawai‘i has many obstacles to overcome to be business-friendly. Some of the challenges we face are:
∫ The highest top personal income tax rate in the nation, which influences businesses because more than 90 percent of them file taxes as individuals;
∫ The highest percentage of state and local excise taxes as a share of personal income, which is a drag on economic growth because it increases the cost of goods and services;
∫ The highest cost of electricity in the nation per kilowatt hour, which is important because it is hard to think of a business that does not use electricity;
∫ One of the highest gas taxes in the nation, which is another fixed cost of most businesses along with electricity;
∫ One of the most costly, and least efficient, highway systems in the nation, requiring more tax dollars to expand and maintain.
So if we take up these issues, and correct them, we have a better environment for economic growth and recovery. The saddest part of all of this is that measures to remedy these situations have been coming before the Legislature year after year, and the majority of legislators do not have the political will or desire to effect changes in these areas.
We, the legislature, must take this opportunity that we are given to make the 2010 legislative session a session of action from improving Unemployment Insurance costs to loosening the choke hold of taxes on businesses. A vibrant business community is crucial to our economic recovery. Let us not focus so much on getting re-elected that we waste this opportunity to do what is best for Hawai‘i’s people and our economy.
• Rep. Lynn Finnegan, a Republican, represents the 32nd District on O‘ahu in the state Legislature.
