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About Politics: With the signs of life returning to the economy, Hawaii really needs to know what is sustaining the revenue

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Fears that Hawaii’s tourism-dependent economy will not emerge from its disastrous downturn may have been exaggerated, but don’t think that Hawaii is a money-making powerhouse.

A year ago the economy collapsed when tourists were closed, hotels closed, planes stopped flying, and restaurants restricted eating while seated.

Today there are signs of life.

Leaving the heart-lung machine doesn’t mean Hawaii’s economy is out of rehab and ready to take the Ironman triathlon, even if new numbers show she can get up and walk at a brisk pace.

A number of reports in the Honolulu Star Advertiser show movement last week.

There is some debate about why bankruptcy filings have decreased; the reports suggest that the Hawaiian economy has not been marked by bankruptcy.

“The 87 cases in August were the seventh of eight months that year in which filings were down from the year-ago period and represented the fewest cases for any month since 87 were filed in December 2006,” the report said by star advertising reporter Dave Segal. “It was also the lowest in August since 2006.”

The good news is set to continue, according to Eugene Tian, ​​chief economist at the state ministry for the economy, economic development and tourism. However, others say the bankruptcy rate has been low because federal and state regulations prevented tenants from being evicted.

Now that evictions are allowed again, the whole situation could get worse.

“One reason (among several) why you saw bankruptcies so low in August was because of this moratorium, which now no longer exists,” said Ed Magauran, a Honolulu bankruptcy attorney.

Now that evictions are allowed, things are getting a lot more worrying for Hawaii’s renters.

A lot can be done with economic theory and forecasting, but no money is always money, and that is why bankruptcies occur.

“If you receive rent subsidy and it is paid out to the landlord in good time, you can breathe a sigh of relief. If not, they and their families could get into trouble, ”said lawyer Magauran, who says more help is needed from the government.

The good news is that Hawaii’s Council on Revenues predicted that the state would collect more money in taxes because more money changes hands, and this shows up in general fund tax revenue.

Estimates assume that sales in the current financial year will increase by 6.3% instead of the 3% forecast earlier. The newspaper reported that the council’s predictions show visitor numbers will surpass last year and expectations that COVID-19 hospital admissions will decrease as more people are vaccinated.

“Councilors said their previous forecast for the fiscal year ending June was too conservative,” the report said.

Yes, it’s obvious that Hawaii’s economy would be stronger if it weren’t just based on tourism, and it’s also obvious that Hawaii is not turning into a US version of free Hong Kong – blowing away regulations and taxes, to attract investors.

There are only so many cars, fridges, and slippers we can buy to help boost the local economy. Hawaii must decide whether it is willing to make more money by hosting more tourists and more development, or recognizing that the local economy is being driven by outside factors that we cannot control.

Richard Borreca writes about politics on Sundays. Reach him at [email protected]

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