Akaka Bill Impact Revealed

The Grassroot Institute of Hawaii, January 7, 2009

The Grassroot Institute of Hawaii (GRIH) has released a new study from the Beacon Hill Institute at Suffolk University. “The Economic Impact of the Akaka Bill: Unintended Consequences for Hawaii” estimates that the Akaka bill could cost the state up to $690 million per year in lost revenue. The Native Hawaiian Government Reorganization Act of 2007 (S.310 and H.R.505) in the 110th Congress, also known as the Akaka Bill after sponsor Senator Daniel Akaka, proposes to create a sovereign Native Hawaiian Governing Entity (NHGE) within the state of Hawaii. While the terms of the bill are vague, the most likely effect would be to vest this new Native Hawaiian government with the rights to land now owned by the state, to the detriment of non-Native Hawaiian taxpayers and, correspondingly, the state economy. This is the first study on the economic impacts of the proposed bill, which is expected to be re-introduced in the new session of Congress.

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Among the study’s findings are:

* The bill could exempt Native Hawaiians living or shopping on land ceded from the state from paying state income and sales taxes.

* There may be a transfer of state-owned lands to persons designated as Native Hawaiians to the detriment of non-Native Hawaiian taxpayers and, correspondingly, to the state economy.

* The resulting tax increases would have large, negative impacts on the state’s economy leading to a possible reduction of 20,793 private sector jobs, a loss of $417.2 million in investment and a loss of $1,461 in real per-capita disposable personal income annually.

“We’ve looked at the bill, as introduced in the last session of Congress, from many different angles and have provided an objective in-depth analysis of what the economic impacts might be on Hawaii and its citizens,” said Dr. David Tuerck, Executive Director of the Beacon Hill Institute and co-author of the study. “In ‘The Economic Impact of the Akaka Bill: Unintended Consequences for Hawaii’ we’ve identified the most likely effects of the Akaka Bill on the Hawaiian economy. By almost any plausible interpretation of the bill, those effects are uniformly negative,” adds Paul Bachman, Director of Research at Beacon Hill.

[Editor’s Note: “The Economic Impact of the Akaka Bill: Unintended Consequences for Hawaii” can be read or downloaded as a PDF file here.]

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