Fears that Hawaii’s tourist-dependent economy cannot pull out of its catastrophic tailspin may have been overstated, but don’t think Hawaii is a money-generating powerhouse.
A year ago, we had an economy crashing as the tourists were shut out, the hotels were closing, the planes not flying and the restaurants curtailing sit-down dining.
Today there are signs of life.
Getting off the heart-and-lung machine does not mean Hawaii’s economy is out of rehab and ready to run the Ironman Triathlon, even if new numbers show that it can get up and go at a brisk pace.
A series of reports in last week’s Honolulu Star-Advertiser show movement.
There is some discussion about why bankruptcy filings are down; the reports indicate that Hawaii’s economy is not wracked with insolvency.
“The 87 cases in August marked the seventh month out of eight this year that filings were down from the year-earlier period, and represented the fewest cases for any month since there were 87 filed in December 2006,” according to the report by Star-Advertiser reporter Dave Segal. “It also was the fewest for any August since 2006.”
The good news is expected to continue, according to Eugene Tian, chief economist with the state Department of Business, Economic Development and Tourism. Others, however, say the number of bankruptcies has been low because federal and state rules have halted renters from being evicted.
Now that evictions are again permitted, the entire situation could change for the worse.
“One reason (among several) why you saw the bankruptcies in August so low was this moratorium that is now defunct,” said Ed Magauran, a Honolulu bankruptcy attorney.
With evictions now allowed to go forward, things for Hawaii’s renters become a lot more worrisome.
There’s a lot you can do with economic theory and prediction, but no money still equals no money, and that’s why there are bankruptcies.
“If they can get rental assistance and get it timely paid to the landlord, then they can breathe a sigh of relief. If not, they and their families could be in trouble,” said attorney Magauran, who says more help from the government is needed.
The good news is that Hawaii’s Council on Revenues predicted the state would be collecting more money in taxes because more money is changing hands and that shows up as general fund tax revenues.
The estimate is revenues increasing by 6.3% during the current fiscal year instead of the earlier predicted 3%. The newspaper reported that Council predictions show visitor numbers will outpace last year and expectations that COVID-19 hospitalizations will fall as more people get vaccinated.
“Council members said their earlier forecast for the fiscal year ending in June was overly conservative,” according to the report.
Yes, it is obvious that Hawaii’s economy would be stronger if it was not based on just tourism, and it is also obvious that Hawaii is not about to turn itself into a U.S. version of free-market Hong Kong — blowing away regulations and taxes to attract investors.
There are only so many cars, refrigerators and slippers we can buy to prod the local economy. Hawaii has to decide if it is willing to generate more money by accepting more tourists and more development, or acknowledge that the local economy will be guided by outside factors we cannot control.
Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.
