Cruising Out of Hawaii.

ECONOMIC DOWNTURN: Hawaii may be facing an economic downturn as the small business community braces for higher taxes, more government mandates, and a slowdown in tourism as the Legislature debates new laws to regulate business and increase cost. Above: NCL's cruise ship Pride of Aloha will be leaving the Hawaii market in May impacting several small businesses on the neighbor islands. This is the 2nd NCL ship to leave Hawaii this year. Click here for more details

More Taxes May Be On Horizon: Legislature Half Over

The 24th State Legislative Session which began January 16 and runs until May 1 is at the halfway point this month. For business, there is nothing to cheer about.

The Session thus far has been sparked by planned tax increases, more employer mandates and burdensome business regulations.

Additionally, the session has revolved around more government intervention and specifically the buying or condemnation of private property. The takeover of the Turtle Bay Resort and adjunct lands, first proposed surprisingly in the state of the State message in late January buy the Republican Governor, Linda Lingle, was embraced by the Democrats. But they went further adding state purchase of Haiku Valley, the Coco Palms resort property on Kauai, Galbraith Estate lands in Wahiawa, and Ka Iwi mauka preservation property in Hawaii Kai.

Then there was the private agreement reached by the Governor and the Office of Hawaiian Affair (OHA) to “end” the ceded lands controversy by the state giving $187 million in lands at Kalaeloa and Kakaako (Oahu) and Banyan Drive in Hilo plus $13 million in cash ($200 million total) and $15.1 million in annual payments. Not everyone favors this settlement — individual Native Hawaiian lawsuits against the state and private landowners would be possible — and if the federal Akaka Bill passes, private property could be in chaos as Native claims could increase.

The supposedly benign U.S. Congress Apology Bill in 1993, now, according to Hawaii’s State Supreme Court in February of 2008, is the new law of the land. The United States overthrow of the Hawaiian monarchy and annexation in 1893 is now called into question legally.

The Sustainability 2050 plan, which cost taxpayers $1.7 million and took two years, has all fluff and no substance except to order people — and business —as to what they can and cannot do. The Legislature has proposed bans on pesticides, styrofoam lunch containers, incandescent light bulbs, plastic bags and a host of other items to make Hawaii more “sustainable.” After the rush to “bio fuels,” many scientific journals nationally question the true impact of bio fuels on greenhouse gases, the rain forests, food costs and productivity of energy. Undeterred, Hawaii presses on for more bio fuel mandates and tax credits.

Bioprospecting is yet another concept which has grabbed hold of the State Legislature. Its roots are from several sources including Native Hawaiian gathering rights, protection of taro and the opponents of Genetically Modified Organisms (GMOs). Early public hearings produced debate and strange political bedfellows. Taken to its extreme, bioprospecting could prevent a property owner from exercising any rights of land, water or air on the property — unless a claim is made by a Native Hawaiian.
Tax proposals thus far in the 2008 session are everywhere. A plan to raise the General Excise Tax from 4% to 5% (a 25% increase) for education needs by Sen. Norman Sakamoto was later withdrawn in favor of a study. Tax loans and forgiveness for teachers, nurses and other special groups are still afloat. Tax credits are abundant. Another 5¢ tax on bottled water (in addition to the current 6¢ per bottle beverage tax) was rebutted by SBH member Ken Simon of Menehunbe Water. The $3 or more per day rental car tax will not be sunsetted. The environmental response tax on fuel probably will increase, and the back door internet “streamlining tax” is back again.

How many of these bills will pass is questionable. Business spends a great deal of time testifying against them.

McDonalds' Veronica Kaneko is Sunrise Speaker

The monthly Small Business Hawaii Sunrise Networking Breakfast will be held 7 am, Thursday, March 27, in the Pineapple Room, Macy’s, Ala Moana Shopping Center.

Our featured speaker will be Veronica Kaneko President and Managing Director, Hawaii Region, McDonald’s Restaurants of Hawaii. She will discuss the “Partnering for Success” program and how McDonald’s maintains its compteitive edge.

This month’s sponsor is Summerlin Life & Health Insurance Co.

Last month’s speaker was UH professor and transportation expert Dr. Panos Prevedouros who spoke on Oahu Transit Alternatives.

The emphassis is on networking at SBH Sunrise and it is a good opportunity to meet new people and do more business. A free exhibit area is provided and all participants are introduced to briefly market their business.

A full breakfast is served and parking is free on the top floor of Ala Moana Center.

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