Could this be a good year at the Hawaii Legislature?

by Keli'i Akina, Ph.D., Grassroot Institute, January 21, 2023

The 2023 Hawaii Legislature is now in session, and for organizations like the Grassroot Institute of Hawaii, this is one of the busiest times of the year.

In past sessions, my Institute colleagues and I have often spent more time trying to stop bad ideas than see good ones make it to the finish line. This year, however, we have high hopes for a few ideas that could make a real difference for our state.

In particular, we have been advancing specific reforms to help lower the cost of living, increase the supply of housing and improve healthcare access for the people of Hawaii — and it appears likely that some, if not all, of these proposed reforms will be warmly received.

Regarding more housing, the key is to scale back Hawaii’s land-use and zoning regulations, which studies show are significantly related to housing shortages and higher prices.

In terms of land use, the Legislature could reform the state Land Use Commission’s permit-approval process, which adds to the time and costs of homebuilding. One fix would be to lighten the LUC’s permitting docket by increasing the number of acres that counties are allowed to rule on. Currently the limit is 15 acres. Anything larger at the moment is up to the LUC.

Zoning codes, meanwhile, are a county function, but the state can help frame how they are applied. For example, the Legislature could require that the counties allow more multi-unit homes such as duplexes, triplexes and fourplexes. It also could place restrictions on so-called inclusionary zoning regulations, which historically have held back smaller, mid-range housing developments.

Finally, the Legislature could help nonprofits such as schools and hospitals with their recruitment and housing issues by making it easier for institutions to build housing on their own lands.

In the realm of healthcare, one of the biggest problems at the moment is Hawaii’s perpetual shortage of doctors, nurses and other healthcare workers.

Lawmakers could address this by allowing out-of-state license holders to practice in Hawaii — similar to what we experienced under Gov. David Ige’s emergency orders during the coronavirus crisis. This could be achieved unilaterally or by joining the interstate compacts for physicians, nurses and other medical professionals, in which each member state recognizes the licenses of all the other member states.

Licensing, however, is only part of the problem. We also need to make Hawaii a friendlier state for private practice doctors. That means taking a hard look at the state’s general excise tax, which makes it difficult for private practices to survive, especially if they take Medicare, Medicaid or TRICARE patients.

For the past few months, the Grassroot Institute has been running a campaign to exempt medical services from the general excise tax, and now is the perfect time for the Legislature to act. Not only would such an exemption help attract more doctors to our state, it also would lower healthcare costs for Hawaii residents.

Speaking of taxes and medicine, we have a prescription for the Legislature when it comes to taxes and the budget, and it’s taken directly from the Hippocratic Oath: First, do no harm.

In other words, this is not the time to consider tax hikes of any kind. The state is swimming in excess revenues and has no need for more. With so many Hawaii residents struggling to make ends meet, lawmakers instead should be looking at ways to cut taxes.

In addition, we’d like to see a balanced budget that includes no revenue-draining boondoggles, no new borrowing and no profligate spending. Maybe even give a little bit of the state’s expected $3 billion surplus back to the people, perhaps after bolstering the state’s rainy day fund and addressing its unfunded liabilities.

My sense is that these are all practical and politically palatable ideas that would bring down housing costs, strengthen healthcare access and, in general, lower our ridiculously high cost of living. No longer would we have to worry about our family, friends and neighbors leaving the islands for greater opportunities elsewhere.

If the Legislature embraces these ideas, we will be well on our way to making Hawaii a place in which we can all live and thrive.