The Governor's Economic Summit
Needs to Speak For the Little Guy and the Aina

"Viewpoint"

Honolulu Star-Bulletin

7/16/97

"Bravo" to Governor Cayetano. After three years of month-to-month reacting to reduced tax revenues, and piecemeal legislative proposals, he finally decided to convene an "economic summit." Its purpose: to develop an "economic development package" to improve Hawaii's struggling economy.

Who's in? Who's left out? Unfortunately the Governor is considering a narrow range of "solutions" and tax changes. He wants to invite only the same old "insiders" — tax experts, administrators, legislators, and some business people — to the parlay. Sadly, he also prefers that discussions take place behind closed doors. Notice whose voices will not be represented: average working people, home renters and business lessors (not just land owners), locally-owned small businesspeople, the poor, small farmers, eco-tourism promoters, environmentalists, and advocates for community-based economic enterprises.

Pushing hyper-growth. It's good that Governor Cayetano and other Democratic leaders have finally discovered that quick-fixes and patchwork reforms won't work anymore in an economy that has changed fundamentally. Unfortunately they, and the Republicans, single-mindedly believe that the solution to Hawaii's current economic difficulties is "more growth, any kind of growth," no matter how much money "leaks" away to out-of-state investors. So they continue pushing more Waikiki and shopping mall development, more tourism projects on the Neighbor Islands, more business links to Asian economies. They'd like Hawaii to become a mid-Pacific Hong Kong.

Many Islanders recognize that such continued hyper-growth will destroy what is left of Hawaii's fragile natural beauty and social fabric. Already our environment has been degraded by resorts and development sprawl and crowded roads. Green spaces and access to beaches and trails have been lost, water and fish are scarce, pollution is common. Already our tourism-based economy creates mostly low-wage jobs, forcing young Islanders to move away in order to find decent careers and affordable homes. Already the Islands' once unique mixture of Polynesian and Asian cultures is being engulfed by the values of competition, individualism, and consumerism.

The Governor's summit is an opportunity to consider fundamental issues, not just slap together a "package of bills." Tax policies discourage some activities (such as smoking or pollution) and promote others (such as hiring more workers, or energy conservation). Taxes can also redistribute wealth. While the Governor is contemplating a State sales tax and eliminating excise and personal income taxes, he must know that sales taxes place a heavier burden on lower- and middle-income workers, while income taxes can be progressively scaled.

Why we need a fair and sustainable economy. The drive for more mass tourism will make us even more dependent on the ups and downs of international markets. Out-of-state investors come here to make profits, not to pay high wages or to protect our natural environment and local culture. Although tourism brings billions of dollars into the state, some economists estimate that no more than 50% of it reaches Hawaii's internal economy. The rest "leaks away" for imported foods, supplies, services, and profits. Hawaii's taxpayers also pay for the development of roads, airports, water and sewer systems — that's one reason our taxes are so high.

People who attend the summit should think seriously about creating a truly diversified economy that meets Hawaii's needs directly. Hawaii could grow and process more of its own food, instead of importing 75% of it. That could keep over $1 billion inside the state, supplying jobs to local farmers, food processors, and marketers. Islanders could conserve energy and use locally available renewable energy sources rather than pay for expensive imported petroleum. That would save another $1 billion. We could grow trees (including bamboo) on ex-sugar lands to supply furniture and building materials. Supporting local manufacturers, artisans and services would keep more money in-state.

A strongly supported eco- and cultural tourism system would attract a large audience of visitors who want to experience authentic Hawaiian culture and the islands' extraordinary beauty. Plantation museums, cultural parks, bed-and-breakfasts, rural inns, all pour money directly into Islander's pockets. An economy with a local-first emphasis means island employees and products are used as much as possible. Culturally, native ways are strengthened, not distorted or debased for commercial purposes. And the land and oceans and reefs would be protected because they are the source of our livelihood and quality of life.

A "locals-first" economy is the key to breaking Hawaii's dependence on the offshore ownership of its major resources. This is done by: (1) Plugging the unnecessary money leaks from our Isles by buying as much as possible from local sources. (2) Strengthening existing small business via business assistance programs and exporting more local products. (3) Encouraging new local enterprises by helping them start up and survive the first critical year. And (4) Enhancing citizen participation by assisting local citizens in creating community-owned economic enterprises.

Imagine if we had diverted one-tenth of the $1 billion now being spent on construction, to creating this new fairer and more sustainable economy. Imagine that Hawaii was investing millions into solar power, energy efficiency, recycling and remanufacturing, eco-tourism, value-added forestry, small farming, aquaculture, and community-based businesses. Wouldn't that create new jobs and markets!

In sum, isn't the point of an economic summit to get some really creative thinking going, and then figure out how to implement the best ideas? Let's not see the Governor limit this summit to a small circle espousing conventional ideas. Come on Ben, let's open it up to everyone who is affected by the State's economic development policies. It's far better to work out the common grounds in a roundtable setting, than wage war during legislative hearings.

A true summit cannot reach quickie decisions. Committees must gather information and debate options before arriving at consensual bills. Good policies take time to formulate. Finally, a strategy to implement the Summit's proposals must be devised so that bills come out of the legislature and agencies follow through on suggested changes.

Will Hawaii take this opportunity to do some fresh thinking about our future economy, or will we continue to repeat out-of-date policies that produce more income inequality, dependency on outside markets, and environmental destruction?