Economic growth needed to ease shock of Lahaina devastation

article top

By Keli‘i Akina

A lot of ideas are floating around right now concerning the future of Lahaina, but few of them consider the enormity of the economic challenge ahead of us.


More problematic, most of the suggestions involve a bit too much “top-down” direction and not enough listening to the people most affected by the fires.

With that said, I do have one suggestion for policymakers:

After looking at the costs that Hawaii taxpayers will likely bear as a result of lawsuits, budgetary stress and the financial impact of the disaster, it should be obvious that we cannot afford to further burden our economy with our usual high-tax and high-spending habits.

Keli’i Akina

Now more than ever is the time to embrace policies that can lower our cost of living, increase opportunities and boost our economy.

Growing Hawaii’s economy would not only help replenish state coffers, but also help Maui residents and businesses recover more quickly— especially in Lahaina.

The best way to help Lahaina is not through schemes, plans and new government agencies, but through policies that will let the people of West Maui choose their own future, such as lower taxes, fewer regulations and a greater respect for private property.

Meanwhile, a legal and financial reckoning is coming that is going to end up costing us all.

Hawaiian Electric Co. is already facing multiple lawsuits because of the Maui wildfires, and the state and Maui County might be facing legal troubles as well. There is a real possibility that all three will have to pay out millions of dollars in judgments.

I hope justice prevails and that any judgments will help those who are seeking restitution for their losses due to the fires.

However, the most likely result of these lawsuits is that Hawaii taxpayers ultimately will be the ones to pay. HECO, the state and Maui County will all inevitably pass the cost of any judgments onto the public, whether through higher rates or higher taxes.

Additionally, Hawaii’s economy in general is going to take a big hit because of the tragedy, since “businesses in Lahaina generated more than $70 million per month in revenue in accommodation, food services, retail sales and other categories, and they employed about 8,500 individuals,” according to a new report from the University of Hawai‘i Economic Research Organization.

UHERO estimated that Maui businesses are losing about $13 million a day because of the sharp drop in tourism to the island. It said that for the state, that means a loss in August of about $30 million in transient accommodations and general excise tax revenues — “and these revenue losses will continue each month that visitors are missing.”

UHERO said that “for the County, we estimate TAT revenues [will go] down by about $5 million per month and property tax revenue … by at least $10.5 million” for fiscal 2024.

Obviously, this is all having a ripple effect on businesses and individuals throughout the state — and bodes poorly as well for the state’s unemployment insurance fund, since unemployment on Maui is expected to jump to 10% in the coming months.

Because the UI fund is financed by taxes on employers, this could be another factor that will make it more difficult in the coming years for Hawaii businesses to cope — or even survive.

These difficult economic realities drive home my original point: We need to grow our economy to make it easier for Lahaina residents and businesses to recover — and ease the broader economic difficulties that appear to be coming our way.

Keli‘i Akina is president and CEO of the Grassroot Institute of Hawaii.



Previous articleTax Deadlines on Maui
Next articleWarning: Vaccines Can Inactivate Your Medications
Grassroot Institute of Hawaii is a nonprofit, nonpartisan research institute dedicated to the principles of individual liberty, the free market and accountable government. Through research papers, policy briefings, commentaries and conferences, the Institute seeks to educate and inform Hawaii's policy makers, news media and general public. Committed to its independence, the Grassroot Institute of Hawaii neither seeks nor accepts government funding. The institute is a 501(c)(3) organization supported by all those who share a concern for Hawaii's future and an appreciation of the role of sound ideas and more informed choices.

Leave a Reply