EDITORIAL
It's time to deal with Hawai'i's economy

Despite modest gains, the 2005 Legislature once again failed to lay the groundwork for sensible and comprehensive long-term economic planning that could benefit Hawai'i in the years and decades to come.

It's understandable that our current economic prosperity might lull lawmakers into putting these matters on the back burner.

But this is precisely the time to deal with long-term issues involving the economic health of the state.

The Legislature showed that sort of foresight following the jolting events of 9/11 when they and other policy leaders held emergency sessions to find ways to jump-start our economy. The policies that emerged are indeed part of the reason for the economic prosperity we enjoy today.

But those policies, and others that followed out of the Legislature and elsewhere, were created in what can only be described as a crisis atmosphere.

Time of opportunity

What we have today is no crisis but rather a time of opportunity to build on today's prosperity in ways that will create a sustainable, effective and diverse economy.

Some of the measures adopted this year offer modest gains. They include: approval of funding for facilities for an interisland ferry system; approval of a county-option tax to support mass transit; a decision to shift authority over key harbor facilities from the Kaka'ako Development Authority to the Transportation Department; and a new procurement policy that will shift or set aside a portion of government work for struggling small businesses.

But we can do more.

Workforce policy

One example: $10 million was set aside for the counties to come up with workforce development strategies. That's welcome news. But what's needed is a far more comprehensive workforce policy that identifies the kinds of jobs we need and want in the Islands over the next few decades and then ensures that there are the right incentives, training opportunities and educational options necessary to prepare that workforce.

Hawai'i has the potential for many good-paying career jobs. But if we don't have an indigenous workforce in place ready and able to take those jobs, they will either go to outsiders or the businesses will simply relocate elsewhere.

Another example: Although it had a rocky start, the state's efforts to stimulate and encourage high-tech and biotech companies through tax incentives (known commonly as Act 221) had a big payoff. It put Hawai'i on the map as a place for entrepreneurs to start their business.

Yet a bill designed to build on that momentum failed to clear the Legislature this session. The idea, based on an Oklahoma model, would create a state fund to back venture capitalists interested in investing in these enterprises. Stimulating that flow of venture capital would have allowed startups to move to the next stage in their business.

Too many rules

A third area that strikes directly on long-term sustainable economic growth deals with state regulatory functions. Hawai'i's lawbooks are full today of rules, regulations and laws designed to deal with what threatened to be a runaway economy in the 1960s and '70s.

Clearly, many of those rules remain needed today, particularly those dealing with environmental protection and worker rights.

Others, however, have outlived their usefulness and should be repealed or set aside.

And even when rules and regulations are maintained, there is a crying need for greater consistency and more stability in their application.

Consistency needed

Most businesses can, and indeed want to, comply with health, safety and environmental regulations. What they also want, and often don't get today, is consistency and certainty. How long will it take to get a permit? What are the requirements? If a permit is granted, can a business proceed with confidence?

Time is money. There are people ready and willing to invest in Hawai'i's long-term economic future. But they won't do so unless they believe the rules of the game are fair and consistent.

The 2005 Legislature had an opportunity to deal with these and other issues but chose not to do so.

It is crucial they do so next year.

Our long-term economic stability is at stake.