July 5, 2023
Hawaii businesses are ready to cut through the red tape they say has been stymying growth.
In an effort to buoy business in the islands, the Chamber of Commerce Hawaii has launched a new web portal where local businesses can submit regulatory issues they have been having.
“We hear that regulatory barriers are a challenge, but what does that really mean,” said Chamber of Commerce Hawaii President Sherry Menor-McNamara.
The portal is part of a larger organizational shift to move from a “Band-Aid approach” to long-term solutions to “make it less challenging to do business in Hawaii,” said Menor-McNamara.
The shift comes has Hawaii has historically ranked near the bottom of places to do business in the U.S. Hawaii’s business environment ranked 49th in the 2023 U.S. News and World Report rankings. The Aloha State also ranked 49th in GDP growth as a percent over the last five years, according to IBIS World.
This past year, the Chamber of Commerce focused its energy on several unsuccessful tax credit bills for internship credits and child care credits. The chamber did score a win in its push for a technical bill to lower the tax burden on certain businesses.
But the web portal, which was launched last month, is aimed at allowing the chamber to respond more directly to member concerns. Initial submissions highlight a common problem in Hawaii: permitting and licensing delays.
Adrian Hong, president of Island Plastic Bags, has dealt with both permitting and licensing woes while running his business, which manufactures trash liners for use across Hawaii.
In 2017, Hong had to do work in his factory to expand production that required roofing permits and electrical permits, and the whole process took over a year.
Hong said the permitting regulations are “a huge impediment to entrepreneurial growth for small businesses.”
More recently Hong, who holds a CPA license, applied to update his permit to practice in late 2020, something any practicing accountant in Hawaii needs to renew every two years. He didn’t receive a new permit until February 2022.
“It shouldn’t take a full year,” Hong said.
The issue of permitting and licensing is not a new one. A 2020 audit of the the Honolulu Department of Permitting and Planning revealed that it can taken anywhere from 157 days to 432 days to receive commercial permits.
The City Council put forward a bill this year that would allow for third-party review of building plans, outsourcing some of the work from city staff in an effort to speed up the permitting process.
Wayne Tanaka, executive director of the Sierra Club, said it’s important to keep in mind the role that regulations do play. Permit review, for example, can ensure that “we’re not designing something that’s going to be unsafe that could result in runoff or flooding threats,” Tanaka said.
Tanaka’s concerns have some historical precedent. In 2021, the former head of Department of Planning and Permitting Dean Uchida said that an audit of a third-party permit review process found 100% of electrical permits were not up to code.
Menor-McNamara said the intent is not to reduce effectiveness of health and safety protections. Instead, “it’s how can we fix it? So it’s not as challenging to do business here in Hawaii,” said Menor-McNamara.
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