Progress Report: Neighbor Islands Need More State Support On The Job Front

view original post

A slow pace of life, lack of development and special tolerance for businesses that abruptly close when the surf is good are all part of the charm of the neighbor island lifestyle. They also contribute to rural Hawaiʻi’s difficulties with growing and retaining skilled workers and good-paying jobs.

Grocery stores, banks, schools and police departments struggle to hire and hold onto employees. So do construction companies, some of which shell out top dollar for luxury vacation rentals to house workers who commute by plane from Oʻahu.

Persistent staff shortages at Wilcox Medical Center, Kauaʻi’s largest hospital, recently led the facility’s cafeteria to replace cashiers with automated checkout technology powered by artificial intelligence.

The Legislature is well aware of this longstanding issue but it wasn’t able to move the needle much this past session, which wrapped up last week. Lawmakers passed up opportunities to revitalize the state’s imperiled dairy industry and attract more Hollywood money. But they did invest in the economic redevelopment of Hilo’s blighted Banyan Drive and job training programs for students.

Attracting and retaining a skilled workforce is key to a strong economy, but diversifying it is another challenge altogether. Whereas Oʻahu boasts a greater spread of jobs in different sectors, the neighbor island economies have essentially been tethered to a single industry since the dawn of the plantation era. When pineapples and sugarcane went bust, tourism took over as the primary economic engine. Few other industries have found a footing.

This makes the neighbor islands particularly vulnerable to periodic slumps in visitor numbers and spending. Whereas the state’s 9.7 million visitors last year represent a slight 0.3% boost from last year and a 6.7% decrease from 2019, the downturn is particularly dramatic on Maui, which is still recovering from the Aug. 8, 2023 wildfires that razed most of the historic town of Lahaina and left thousands homeless. There were 2.3 million visitors to the Valley Isle last year, marking a 6% decrease from the previous year and a staggering 23% drop from 2019.

Could Hollywood Be An Economic Driver?

Senate President Ron Kouchi said the state should seek new ways to support new or underperforming industries. Luring Hollywood to Hawaiʻi is one of those strategies.

Lawmakers missed a chance to bolster the local film industry, however. A proposal died that would have raised the $50 million cap on the amount of money the state spends annually on tax credits — something Kouchi said could have been a win for economic diversification and workforce development.

Hawaiʻi has been the backdrop for scores of Hollywood productions over the last century, with the neighbor islands hosting some of the most iconic film sets, including “South Pacific,” “Blue Hawaiʻi,” “Jurassic Park” and “Pirates of the Caribbean.” 

But the industry has been in decline since the Covid-19 pandemic and advocates say it needs a boost. This week’s cancelation of “Rescue: HI-Surf” after a single season of filming on the North Shore of Oʻahu marks an industry low: There’s no active major film or television production currently underway in the islands for the first time in years.

“There’s global competition to get this business and now playing into that is President Trump announcing a 100% tariff on foreign films,” Kouchi said Thursday. “I think that our economists have not done an accurate job of fully recognizing the full economic impact of having that industry here.”

Hawaiʻi-made films also inspire an untold number of people around the world to plan a Hawaiʻi vacation, something Kouchi said isn’t currently reflected in industry data. But some of his colleagues in the Legislature were not convinced there was enough return on investment to give Hollywood productions more generous tax credits to film in the islands.

Leadership From Neighbor Islands

With Kouchi and House Speaker Nadine Nakamura, both from Kaua‘i, leading their respective chambers, they were able to bring issues concerning the neighbor islands to the forefront but still had to convince the other 74 members of a historically Honolulu-centric Legislature to support their ideas. They did make headway on some initiatives this session.

For the first time since 2017, lawmakers fulfilled Hawaiʻi Health Systems Corporation‘s full funding request, providing $167 million to preserve rural health care access at medical centers statewide, including five on the Big Island and two on Kauaʻi. The allocation includes an increase in funds for mental health services at Samuel Mahelona Memorial Hospital on Kauaʻi.

The Big Island’s Hilo side got an economic development boost that could help local companies stay in business, preserve jobs and build on East Hawaiʻi’s small but growing tourism business. Lawmakers set aside $1.5 million to plan for the demolition of the former Country Club Condominiums complex as part of a longstanding effort to redevelop Hilo’s blighted Banyan Drive.

Sen. Lorraine Inouye, a champion of the Banyan Drive redevelopment project, said the Country Club demolition has an estimated price tag of $14 million, which she said she’ll seek funds for next session.

The area, she said, could become an economic engine for East Hawaiʻi, which has a growing resident population and rising visitor numbers, especially during major events like the Merrie Monarch Festival. In addition to demolition and sprucing up, she said the area needs more hotel rooms.

Lawmakers also passed bills that allocate funding for other long-awaited Big Island projects, including a $26 million overhaul of the Hilo International Airport terminal and a $2.5 million study on where to locate an alternate road into the Big Island’s Puna district, where emergency response times lag and resident commute times are long. 

“If you look at the entire budget, the neighbor islands have not always gotten their fair share of funds but that is changing,” Inouye said.

A bright spot for rural workforce development at the Legislature this session is the expansion of the state Department of Labor and Industrial Relations’ paid summer internship program for high school students and recent graduates, especially in fields with workforce shortages, such as health care, education and construction. 

Lawmakers allocated $1.8 million a year for the next two years to fund six-week, $20-an-hour internships at statewide public and private institutions, including hospitals and schools. The legislation was inspired by a push to create paid internships for Kauaʻi high school students at Samuel Mahelona Memorial Hospital, Nakamura said. The state-run medical facility is next to Kapaʻa High School.

Aloun Farms, a prolific Hawaiʻi vegetable grower, had lobbied the Legislature for taxpayer bonds to fund a Kauaʻi dairy’s design, construction and maintenance, arguing that reviving commercial milk production is in the public interest. The effort failed this session, however. The special purpose revenue bonds that the family farm company sought have instead been prioritized by lawmakers for affordable housing and health care, according to Kouchi. 

Aloun Farms President and General Manager Alec Sou had described the bonds as critical to his vision to not only establish a dairy on Kauaʻi but revitalize the endangered dairy industry statewide.