Hawaii receives low marks for economic, personal freedom

by Merrilee Gasser, The Center Square, Nov 24, 2023

Hawaii remains among the worst states in the country for personal and economic freedoms, according to a report.

The Aloha State ranked second-to-last for the 12th consecutive year in the libertarian research organization Cato Institute’s Freedom in the 50 States Index. Since the organization began tracking state and local public policies tied to personal and economic freedoms, Hawaii has never been out of the bottom five.

Over the years, Hawaii has repeatedly received low marks for its fiscal and regulatory policies but performed higher regarding personal freedoms. The report shows that the state's score nosedived between 2010 and 2015, rose some but remains low.

The state has seen a net outflow of residents to the rest of the country for the past decade, according to the report.

State-level taxes increased from 8.3% of personal income in 2009 to an estimated 12.2% in 2022, which is more than double the national average, the report found. It also faulted Hawaii for its high local taxes and government debt, which is “much higher” than the national average.

Hawaii’s performance for its regulatory policies is also low.

“Hawaii does poorly in almost every area of regulatory policy, but its two worst categories are land-use and labor-market freedoms,” the report said.

“It has among the strictest restrictions on residential building in the country. And in 2022, the state worsened the problem by enacting a statewide urban growth boundary that limits land development.”

The report went on to say Hawaii’s eminent domain law is abused and virtually unchecked by law.

Some nods in Hawaii’s favor went toward its slightly above-average occupational freedom and an improvement in the state’s civil liability system. It also has incarceration and drug enforcement rates below the national average, with an improvement in other victimless crime rates, the report found.

Hawaii is faulted in the report for its strict insurance regulations and its “unfair sales” law, which prohibits businesses from selling at prices that are deemed “too low,” the report said. It also has a worse-than-average civil asset forfeiture law and low tobacco freedom with high cigarette taxes, according to the report.

Gambling is primarily outlawed in Hawaii, and gun rights are almost non-existent.

“All Class 3 weapons are banned, there is comprehensive registration and purchase permitting of firearms, dealers are licensed, ‘assault weapons’ are banned, large-capacity firearm magazines are banned, and so on,” the report said.

The only state performing worse than Hawaii was New York. California, New Jersey and Oregon rounded out the bottom five. The top performers were New Hampshire, Florida, South Dakota, Nevada and Arizona.

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CATO: Freedom in the 50 States 2023: Hawaii Overall Freedom | Cato Institute