One year after Hawaii faced a shutdown due to COVID-19, local media outlets are taking the opportunity to report on where we stand as a state, and how we have responded to a pandemic that has crippled our country. The leaderships of our organizations have also reflected on the past year’s events, and offer perspective on what we believe has worked and what has not.
From the outset, the COVID shutdown here negatively impacted all industries — but especially the tourism, hospitality and food service industries, as visitor arrivals dropped by more that 95%, and all of us sequestered due to stay-at-home orders.
This economic implosion decimated the state’s tax revenue collections, particularly the general excise tax (GET), and wreaked havoc on the state budget. Businesses in the hospitality and food service industry immediately faced closures and employee reductions via layoffs or furloughs. Other small businesses were soon forced to follow, unless they managed to secure Paycheck Protection Program (PPP) loans or other grants to support operations. But even with this financial support, many of our local businesses still struggled.
This abrupt economic downturn led to discussions about a dramatic slashing of our state budget, citing an unprecedented revenue shortfall projected by the current administration. The most draconian options were considered, developed and even publicly announced as necessary to get Hawaii out of the situation we faced.
Against this backdrop, our country was going through a transition in the administration and Congress. During this time, several local leaders and economists urged patience in dealing with our state budget crisis. These calm voices provided a much-needed perspective that helped foster an open dialogue about the best path forward.
Today, Hawaii and the rest of our 50 states are seeing the benefit of unprecedented federal support to rebuild our country’s economy. We in Hawaii stand to see between $6-7 billion in direct and indirect aid from the federal government.
Throughout this crisis, our state Legislature stood fast and displayed the patience called for by economists and other local business leaders. The Legislature chose not to act in knee-jerk fashion and slash our state government. They resisted the call to make changes that would cripple local nonprofits and small business. They waited until we could pivot to a new place with tremendous federal support.
Today, the Legislature has an insurmountable task, unlike any other sessions, to balance the budget. Against this backdrop, our Legislature is showing true leadership in looking to use some of the monies coming from the president’s recovery plan to restore funding to essential government services, nonprofits and pay off the loan the state took out for unemployment insurance (UI). This ensures our local businesses will not be stiffed with an unaffordable increase in UI premiums as required by law.
Legislative leaders are looking to pay off the debts Hawaii incurred during the pandemic and get our state on a faster path to resiliency and recovery.
Whether it was the leadership they showed in forcing more contact tracing early in the pandemic, developing a volunteer pool for intaking UI claims, or showing the foresight to move deliberately before making drastic cuts — legislative leaders kept Hawaii afloat through their efforts and partnering with key business leaders in our state.
A year removed from the start of the COVID-19 pandemic, Hawaii has emerged as a leader in the United States in its response to this virus. We are also beginning to see signs of economic recovery.
What we hope will not be lost is the diligent work by our legislative leaders who showed restraint and patience during one of the most difficult times in our state’s history. At this point, there is no imagining where Hawaii would be had our elected officials followed the doom and gloom forecasts and made drastic cuts. We certainly would not be as ready to resume normalcy as we are today.