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The Honolulu Advertiser
Posted on: Tuesday, May 25, 2010

Study: Civil unions' effect mild

BY Greg Wiles
Advertiser Staff Writer

A study released by two University of Hawai'i economists as Gov. Linda Lingle contemplates a civil-unions bill says such legislation would have a small effect on Hawai'i's economy and government.

The 12-page paper by Sumner La Croix and Kimberly Burnett looked at how the measure passed by the Hawai'i Legislature might affect tourism, tax revenues and insurance.

"We conclude that the legalization of civil unions in Hawai'i will have only a very minimal impact on any aspect of Hawai'i's economy and state government operations," wrote La Croix and Burnett.

The paper comes as the debate over civil unions between same-sex couples focuses on Lingle and whether she will sign a measure passed by the Legislature into law. Lingle yesterday began two days of meetings with advocates against and for the bill.

While La Croix and Burnett largely found the measure to have no to slightly positive effects on the economy, their work has drawn criticism from the Hawaii Family Forum, a group opposed to the civil unions law.

"The conclusions are unsupported by any other state's experience," wrote Honolulu attorney James Hochberg, speaking for the group yesterday.

"Mr. La Croix fails to adequately evaluate whether the adoption of civil unions in Hawai'i will cause tourists to view Hawai'i as a less attractive destination than before, thereby decreasing the actual net tourism flow."

La Croix and Burnett looked at experiences in other states where laws have been passed allowing either same-sex marriage, domestic partnerships or civil unions.

Using Vermont's experience and drawing on U.S. Census data on same-sex couples in Hawai'i, the authors estimated the law would result in 1,962 Hawai'i residents entering into civil unions over a six-year period.

The authors also concluded:

• Based on the experience of other states that have implemented civil-union laws, the state's adjustment to such legislation would be smooth and cost little. It cited reports from Vermont and New Jersey, saying their laws resulted in minimal impact on state operations or costs.

• An increase in visitors and spending by same-sex couples from other states can be expected as they travel here to enter into civil unions or to honeymoon. That would result in direct spending of $3.6 million a year from their daily expenditures as well as money spent on ceremonies.

If a multiplier is used to arrive at direct and indirect spending generated by the civil unions, the total impact would be $6.9 million a year, the report said.

• Enactment of the law is unlikely to lead to substantial increases in people covered by public and private health insurance. There also would not be substantial increases in health insurance expenditures by either public or private employers, the study said.

• There is likely to be a small gain in state revenues because of civil-union registration fees, excise taxes and state income taxes. This includes as much as $597,720 in license fees over a six-year period and $300,000 per year in general excise tax revenue.

The authors said the effects on income taxes were too difficult to estimate with precision, though they may be slightly positive for the state.

• Hawai'i's labor force may attract a wider variety of talented individuals if the state is seen as a more tolerant, cosmopolitan society.

Hochberg criticized the report, saying some of it presents conflicting information or lacks evidence to make assertions.

For example, he noted that while the authors said there has been no decline in tourism growth rates in cities and states where there has been passage of civil-rights legislation for gays and lesbians, the study did not cite any positive effects on tourism.

Hochberg also said the report cited unfounded estimates on potential civil union license revenue. Tourism general excise tax revenue estimates by La Croix and Burnett were speculative given Vermont's experience, Hochberg said.

"If more than two-thirds of the population do not support same-sex marriage or civil unions, logic would indicated that the likelihood of a negative effect occurring is higher than the likelihood of the small positive effect," Hochberg argued.

La Croix and Burnett noted the views expressed in their paper were their own and not the official view of the university or other organizations.