Akina hails vigilance as key to protecting historic state tax cut

from Grassroot Institute

Hawaii’s most popular radio host, Michael W. Perry of KSSK 92.3 FM, this week again hosted Grassroot President Keli‘i Akina on his morning radio program, and together they covered a lot of ground concerning where Hawaii stands in relation to taxes, government spending, tax flight, the Jones Act and other important issues.

Perry began by expressing surprise that residents could actually praise the Legislature for its actions last year, which included a significant reduction in the state’s personal income tax. Perry expressed worry, however, that Hawaii lawmakers might undermine some of the benefits of the tax cut by raising taxes elsewhere, “just kind of surreptitiously.”

“Absolutely,” responded Akina. “That could undercut all of this if we allow our legislators to tax us in other ways. For example, implementing a “green” fee or a transient accommodation tax, or more burdens on anything that we pay for. And so we’ve got to be vigilant this term; that’s gonna be one of the watchwords for the Grassroots Institute. Be vigilant.

TRANSCRIPT

1-16-25 Keli‘i Akina with radio host Michael W. Perry of KSSK 92.3 FM

Michael W. Perry: I mentioned we had a guest and he’s one of my favorites because he is one of the smartest guys I know. Dr. Keli`i Akina is the honcho, he’s the Shogun over there at Grassroots Institute. Happy New Year, Dr. Akina. How are you?

Keli‘i Akina: Well, happy New Year to you, Mike, and aloha to all your listeners.

Perry: We did something this year recently that I can’t recall doing in my long career, and that was to actually praise the governor and the Legislature for a whole bunch of stuff they did that will affect people of the state of Hawaii.

Akina: Absolutely. And that’s because they actually did some things that will make a great difference for all of us who live in Hawaii.

Perry: Like what?

Akina: Well, they lowered taxes. Historically, there’s never been a tax cut like the one that was passed by the Legislature and the governor in the last Legislature. 

By 2029, they will save taxpayers more than a billion dollars. And that means the typical family of four who makes about $100,000 is going to see their tax savings grow from $348 at the start to $3,500 a year by 2029. That’s good pocket change that’s gonna help us live in this inflationary state.

Perry: No kidding. And one dark thought that entered my mind about this is that traditionally, even if they do hold their line on taxes, they have traditionally undermined some of the benefits of the tax cut by raising taxes elsewhere, just kind of surreptitiously.

Akina: Absolutely. That could undercut all of this if we allow our legislators to tax us in other ways. For example, implementing a “green” fee or a transient accommodation tax, or more burdens on anything that we pay for. And so we’ve got to be vigilant this term; that’s gonna be one of the watchwords for the Grassroots Institute. Be vigilant.

Perry: Sounds good. Also, I think this is a New Year’s resolution — I’ll get to your Santa Claus list, you had a list for Santa Claus, in just a second — but you want everybody in the Legislature to think about reducing spending and actually start budgeting smartly.

Akina: That’s so important. We do that in our own homes. We take a look at how much money we have and is coming in. We look at all the costs we have to pay, and we make tough decisions. That’s exactly what our state needs to do. And if we do that, the good news is that there’s enough money to fund everything that we need in Hawaii.

Perry: I made a point this week about how we talk about the California fire a lot because the leadership of California is unfortunately not very good. And we have a habit in the state of Hawaii of copying the things that California does, and we don’t want to. There’s a whole bunch of things, and I think a whole bunch of proof about that right now. 

You wrote around Christmas time, and I printed it out at the time, Dr. Akina’s wishlist, “Dear Santa Claus” [laughter], and you had a whole bunch of things on there that you and the Grassroots Institute were hoping for coming up this year. Can we go over them briefly?

Akina: Well, one of the most important is the one you mentioned: Let’s not tax people in other ways, you know, and erode the tax cuts that the government has allowed. I think that’s still important, just watching our legislators a lot more. 

Another thing that we wanna see is: Legislators, trim the fat. 

I’m not talking about Santa Claus per se, but that’s a good metaphor at this time. We’re spending a lot of money in ways that we don’t need to be spending.

For example, there are lots of state government positions that are not filled, and there are departments of the state [that] continue to receive funds for those positions because they’re afraid to lose them. 

But in the end, we’re not getting those services and we’re just giving that money to the state departments. Their coffers are becoming full. Those are the kinds of things in terms of efficiency that we’d like to see fixed in 2025.

Perry: Sounds good. I told the Legislature this year, my own personal opinion was, “Hey, stop. You got one job, one job. Stop pricing us out of paradise.” And that, you know, we have a tremendous out-migration. Everybody is going to Vegas or whatever. A couple of things that would help that: Permitting, give me about a sentence or two on permitting.

Akina: We have one of the most inefficient systems in the world. We need to reverse that. There are several things that can be done. We’ve got a report that we’d love people to read. It’s on our website, grassrootinstitute.org, grassrootinstitute.org. Seven things we can do to improve our permitting right away. 

And one of them, for example, is wherever possible, let the private sector take over and help our government to be able to do things a little more efficiently.

Lots of things can be done and they’re being done now, and we commend some of the departments that are moving forward on that.

Perry: That’s great. And that will help the high cost of housing, too, in the long run. 

There’s one other thing that could save the average Hawaii resident, and I don’t know that everybody doesn’t know this, about $1,800 every year. That would be the Jones Act.

Akina: Oh, you know, the Jones Act is something that drives our prices up higher than they are naturally. But we’ve got some news — that’s not great news for everybody — but it will help us to make the case that the Jones Act needs to be fixed. 

And that is, it not only affects Hawaii and Puerto Rico and Alaska, but it actually affects other states, even inland states, because most inland states receive most of their goods from ships that come to America, and then they have to transport them over land. 

Watch Grassroot Institute, especially grassrootsinstitute.org, we’re gonna be releasing some information about that in the years to come.

Perry: Sounds good. And see? There’s people thinking about this stuff, thinking about you and your wallet, and the fact that you shouldn’t be priced out of paradise. grassrootinstitute.org, if you want to be a part of this and keep up with all of this, they do a lot of great research. 

Happy New Year, Dr. Akina. Thanks for talking with us.

Akina: Hau`oli Makahiki Hou! (Happy New Year!)