Isles rank low for
small biz survival
A survey cites
By Pete Pichaske
Hawaii's high taxes
Phillips News ServiceWASHINGTON -- For the second consecutive year, Hawaii ranked last among the states in a national survey of how friendly state governments are toward small businesses.
In its third annual "Small Business Survival Index," the Small Business Survival Foundation rated Hawaii 50th on a scale aimed at measuring government costs imposed on small businesses. Only the District of Columbia was ranked lower.
"The message to small businesses from the government in Hawaii is: 'We're not terribly warm towards entrepreneurs and small businesses,' " said economist Raymond J. Keating, the study's author. "The message is: 'This is not a very friendly public policy environment.' "
The index relied on 1997 figures and did not include the personal income tax cuts approved two months ago by Hawaii lawmakers. Those tax cuts begin Jan. 1, 1999 and will total $752 million over four years.
The 1998 survival rankings mirror 1997's results. In 1996, the first year of the survey, Hawaii ranked 48th, ahead of California and Rhode Island.
Keating said Hawaii has not necessarily gotten worse, but other states have improved their small business climate. California, for example, recently rolled back a personal income tax increase,
The ratings are based on a variety of state tax rates and workers' compensation costs, as well as crime rates.
The tax cuts approved by the legislature "will push Hawaii in the right direction," said Keating, and "clearly will show up on our index."
But he added: "The only problem is, Hawaii has such a long way to go."
Hawaii, he noted, is ranked relatively far behind the 49th state, Minnesota.
The top-ranked states were, in order, South Dakota, Wyoming and Nevada.
The Small Business Survival Foundation is the research arm of the Small Business Survival Committee, a 7-year-old advocacy organization with 40,000 members.
