HONOLULU — The coronavirus pandemic has plunged the state’s economy into a recession that’s unprecedented for people alive in Hawaii today, a University of Hawaii economist told lawmakers Monday.
“We know Hawaii is already in a deep recession. That recession will surpass anything we’ve seen in our lifetimes,” Carl Bonham told members of a House committee on the economic and financial effects of the virus.
“There’s really not any comparison that you can make to an economy where you basically shut down hospitality and tourism — and will remain shut down for several months — shut down much of the local economy,” Bonham said.
He and the other committee members spoke to each other over a video conference as they practiced social distancing. The state Capitol building was closed earlier this month when a senator tested positive for COVID-19. Olelo Community Media broadcast the video conference online and on television.
Bonham said it’s difficult to predict what’s in store for the economy because it’s not known how long the health crisis will last and how long the recovery will take.
“We haven’t identified the bottom yet,” Bonham said.
But he said he’s currently forecasting that the state’s unemployment rate will likely peak at 25% in the April-June quarter.
Income will not drop as much because of new federal legislation providing extra unemployment benefits and direct payments to people.
State general fund tax revenues, meanwhile, are likely to drop between 10% to 25%, Bonham said.
For the full year, which includes strong performances in January and February and a predicted recovery later in the year, Bonham said the number of travelers to Hawaii will likely be 41% lower than 2019.
U.S. Sen. Brian Schatz told the meeting the federal legislation includes at least $4 billion for Hawaii. Of that, $1.42 billion will go toward unemployment insurance claims and $1.24 billion will go to direct payments to individuals. The funds also include $1.25 billion for state and county governments.