[ OUR OPINION ]
Hawaii’s antibusiness
ranking cannot be ignoredYET another missile has been fired at Hawaii for being hostile to small business, and Governor Cayetano has dismissed it as a politically conservative, antiunion broadside. It is true that most small-business owners dislike high taxes, excessive regulation and labor unions. However, that does not vindicate Hawaii of its ranking of dead last among states analyzed by the 70,000-member Small Business Survival Committee, a nonprofit advocacy group.
THE ISSUE A small-business advocacy group ranks Hawaii worst among states in government-related costs of doing business.
Cayetano shrugged off the ranking as coming from an organization that he understands to be "very, very conservative. They see unionism, for example, as a negative for business. If you go to some of these right-to-work states, that's a point of view that we have not accepted here in Hawaii."
Indeed, Hawaii was among 28 states and the District of Columbia that were dinged a point for allowing union shops, one of 20 categories used by the group in rating states. However, Hawaii, which claims to be high-tech friendly, also was penalized a point for being one of only eight states that impose a sales tax for Internet access. Those were only two points included in its total score of 54.7, second highest (worst) only to Washington, D.C.
Most of Hawaii's terrible score came from categories that have earned the state its longtime reputation as tax hell. It has the nation's seventh-highest top personal income tax, the 10th-highest top capital gains tax, the fourth-highest unemployment tax on wages and the third-highest workers' compensation costs, according to the ratings. Hawaii is second highest in sales, gross receipts and excise tax rates only to Washington, which has no state income tax. The state's relatively low property assessments fail to compensate for the tax gouging in those areas.
Adding to the cost of doing business in Hawaii are the highest electricity rates in the country, according to the analysis. Some residents may be surprised that Hawaii's health-care costs are average and that the number of county and state employees per capita also is mid-range.
"If you simply listen to the rhetoric of politicians, the importance of small business is an accepted bipartisan truth in the political and policy worlds," economist Raymond J. Keating said in the preface to the report. "Too often, elected officials at the federal, state and local levels impose burdensome costs on the entrepreneurial sector of our economy. That translates into less innovation, slower economic growth and fewer jobs being created."
The numbers tallied by Keating's group make painfully clear that in no state is the burden greater and entrepreneurship discouraged more than in Hawaii.
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