honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser

Posted on: Friday, June 7, 2002

Island Voices
Forbes doesn't get it about us

Seiji F. Naya is the director of the state Department of Business,
Economic Development & Tourism.

Forbes magazine's recent article on doing business in Hawai'i was of little practical use to any reader.

It shouldn't surprise anyone that Honolulu is one of the most expensive cities, just behind places such as New York and San Francisco.

Yes, ours is a heavily unionized state. We are indeed the only state that requires employers to provide medical insurance to employees who exceed 20 work-hours per week.

And our isolated geographic location and cost of shipping goods to the Islands seem as obvious as the sunsets over the water we enjoy every night.

Developers sometimes do view our permitting processes as onerous. Let's face it: We have much more at stake in protecting our spectacular environment, and we've a limited amount of land. Some real-estate developers, like the McCormacks, have ventured out to other markets. It's not likely, however, that onerous permitting was the real impetus behind their move.

Hawai'i's post-statehood boom, which saw double-digit growth for many years, subsided to more normal growth in the late 1990s. The Japanese investment bubble also burst after this period of tremendous growth, and more developers than development opportunities brought an inevitable shakeout.

For political reasons, Forbes will never acknowledge what its conservative brethren have been saying these past few years. The highly conservative Cato Institute says of Gov. Ben Cayetano: "We rate him very highly. He's been one of the biggest tax-cutting governors in the country, and clearly cut taxes more than any Democratic governor."      

The American Legislative Exchange Council, an organization started nearly 50 years ago by conservative policy analysts, recently released a comprehensive study that found that in the past decade, Hawai'i posted the third lowest rate of government growth in the entire nation.

Forbes failed to mention the historic $2 billion tax break Hawai'i enacted in 1998, or the de-pyramiding of the general excise tax. Neither did it raise the fact that visitors pay a sizable portion of Hawai'i's tax base through the GET, which at 4 percent ranks as the second lowest sales tax rate in the nation, and the lowest when county rates are included, since Hawai'i does not impose county sales taxes.

As to top marginal tax rates, Hawai'i's 8.25 percent for the personal income tax is lower than California's 9.3 percent, Iowa's 8.98 percent or Oregon's 9.0 percent. It is important to note that our top 6.4 percent corporate income tax rate is lower than 32 other states.

Forbes also incorrectly represented Honolulu's unemployment rate at 5.4 percent. Honolulu's unemployment rate is just 4.0 percent, compared with a national rate of 6.1 percent.

Many entrepreneurs see our state's potential, and they grab opportunities to increase their stake in Hawai'i when possible. Just ask Conrad Hilton, who recently invested another $100 million at the Hilton Hawaiian Village. Or talk to General Growth Properties Inc., which runs 142 regional malls in 39 states, including the Ala Moana Shopping Center. With Ala Moana its most profitable shopping center, General Properties has now purchased the neighboring Victoria Ward properties.

This is not to say we don't have challenges. To be sure, there are things we could be doing much better. The point here is that Forbes does not get it where Hawai'i is concerned, and it never will get it.

A sweatshop, bottom-line mentality that makes no priority of quality-of-life issues such as caring for the less fortunate, or for workers, or for the environment, will never understand why people choose to live, raise families and do business in the Islands.