HONOLULU, HAWAII --- The Grassroot Institute of Hawaii has released new findings on the economic costs of the City and County of Honolulu's recent General Excise Tax (GET) increase, which it levied to help pay for the proposed steel-on-steel rail system. Using a Hawaii-specific economic model developed by The Beacon Hill Institute at Suffolk University, the Grassroot Institute has estimated the GET increase impact on key economic indicators including unemployment, personal income, and investment.
The estimated effects of the 0.5% GET increase in 2008 alone include:
· 5,692 private sector jobs lost
· A decrease in investment of $125.4 million
· A decrease in statewide personal income of $303 million
· A cut in disposable income by $646 million
In subsequent years, the effects are magnified.
“Hawaii and the United States are in the midst of unprecedented economic challenges. In Hawaii, unemployment is at its highest rate in six years and hotel occupancy is down to 74% compared to a year ago,” explained Jamie Story, President of the Grassroot Institute. “This is not the time to burden taxpayers and businesses with an increase in the highly regressive GET. Two weeks ago, the United States Congress voted to spend $700 billion in an economic bailout, or $2,300 per American resident. Yet the proposed Oahu rail system will cost each Oahu resident a minimum of $4,110 in construction costs alone—nearly 80% more per person than the bailout!”
According to Wendy Fujimoto, the Institute’s Director of Operations and author of the new paper on the topic, the claim by Honolulu officials that the rail system will employ more than 11,000 people is not fully accurate because almost all of these positions are temporary jobs during the project's eight-year construction phase.
Detailed information on the economic impact findings may be found in the Institute’s new policy brief, "The Real Cost of the Rail GET Increase", available at http://www.grassrootinstitute.org
The mission of the Grassroot Institute of Hawaii is to promote free markets, individual liberty, and limited, more accountable government. Through research papers, policy briefings, commentaries and conferences, the Institute seeks to educate and inform Hawaii's citizens and policymakers on issues vital to Hawaii's future. For more information please visit http://www.grassrootinstitute.org
Tom McAuliffe is the Communications Director for the Grassroot Institute of Hawaii. Reach him at mailto:tom@grassrootinstitute.org
