By Lowell L. Kalapa
When lawmakers convene this week, the economy will be on everyone’s agenda as Hawaii heads into the eighth year of bad times. Some have criticized this emphasis on the economy, noting that the social issues will be lost in the shuffle and the poor will be forgotten as lawmakers concentrate on improving the business climate. Unfortunately, that criticism fails to recognize that many of the “social” problems our community faces take their root in the financial and economic stresses brought about by a poor economy.
As lawmakers have learned all too slowly – in hopes that economic recovery was just around the corner – a poor economy does not produce the tax revenues that they – lawmakers – like to spend. As a result, there is no money for education, there is no money for general assistance, there is no money for health care. On the business side, when the economy is not doing well, then businesses don’t do well and they don’t have the money to make those contributions to the spouse abuse shelters or the soup kitchens.
When the economy is not doing well, people lose their jobs or hours are cut back so there is less in that pay check to pay the rent and put food on the table. For those who lose their jobs or can’t find one, the frustration mounts and sometimes explodes, resulting in bruised and battered spouses or children. For others, if they can’t earn it, then they resort to taking it from others and the burglary and other crime statistics rise.
This is not to say that those who would want to improve the economy and business climate are without blame. As in past sessions, there will no doubt be those who are eager to take care of themselves at the expense of others.
There will be those who will want tax breaks for their particular business believing that the tax break will be the magic pill that cures the ailing patient called the economy. But as we have seen in the past, many of those specific tax breaks do little for the overall economy. And those tax breaks come at a cost to everyone in the form of reduced revenues making it less likely that an overall tax reduction can be accomplished.
And the evidence is there to be had. Recall the tax credits for hotel renovation and construction, or the tax credits for movie and television film makers or the exemption for aircraft maintenance facilities. While these tax incentives may have generated some added activity, these specific taxpayers had to continue to do business in a community where the tax burden on all other businesses and individuals continues to be amongst the highest in the nation.
Certainly the visions of tax credits or exemptions for high tech business will continue to dance in the heads of lawmakers and some taxpayers, but unless the overall cost of doing business in Hawaii is lowered, the flashiest tax incentive will not improve the overall economy. Lawmakers must realize that in a small state like Hawaii, businesses are inter-dependent on one another. Unless everyone is able to stay in business and provide goods and products at the most efficient cost level, then the economy as a whole will suffer.
Perhaps it is a bit much to ask of a legislature that is more preoccupied with their individual agendas than it is with a vision for the state as a whole. But the time has come to ask what our leaders see as the vision for Hawaii and to bite the bullet to make the difficult choices necessary to get to that vision.
So will the social issues be allowed to slip between the cracks in order to improve the economy? For the naysayers, it is time to see the issues as inter-related, that without a good economy, the social issues will continue to fester, without a good economy, the resources needed to address the social issues will not be available.
As lawmakers gather in Honolulu, we, the taxpayers, need to remind our elected officials that they are elected to work for the good of Hawaii as whole.