Maui Business

Hawai‘i Ranked 2nd Least Economically Free State in U.S.

August 24, 2018, 6:07 PM HST
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In a national study conducted by the Cato Institute, Hawai‘i ranked 49th among all 50 U.S. states in terms of personal and economic freedom, making it one of the least “free” states in the U.S.

The report considered a wide variety of factors including regulatory policy, taxation, limits on alcohol, tobacco and marijuana and more. Only New York scored lower in the survey than Hawai‘i. Florida was rated the most free, followed by New Hampshire, Indiana, Colorado and Nevada.

The Cato report cited Hawai‘i’s negative migration rate over the past decade as evidence that the lack of freedom is inducing residents to leave for greener pastures. Among other policy changes, it recommends more efficient government, cutting government spending and taxes and relaxing Hawai‘i’s land-use regulations.

“Hawai‘i’s high taxation and oppressive regulations have consistently put the state among the least economically free locales in the U.S.,” said Keli’i Akina, president of the Grassroot Institute of Hawai‘i. “If you consider other factors, such as the barriers to the expansion of health care facilities or the proliferation of occupational licensing laws, it is clear that the red tape that governs life in the Aloha State is hurting more than just our economy.”

Akina agreed that greater government efficiency is needed, as well as a reexamination of land use regulations, but added that it’s possible for Hawai‘i policymakers to start with small changes that might be more politically palatable.


“Loosening up occupational regulations that make it difficult for people to find employment would be a good first step to increasing personal freedom while helping the disadvantaged,” Akina suggested. “Likewise, revising Hawai‘i’s certificate-of-need laws would help expand health care access on the outer islands and allow our underserved populations to get much-needed care.”


Akina also suggested that Hawaii legislators reconsider popular proposals that contribute to the state’s high cost of living or hurt local businesses.

“The Legislature should roll back the recent increase in the top marginal income tax rate,” he said. “And it’s time to let go of the idea that a dramatic increase in the minimum wage would be an effective way to help working families.”

“While some policymakers might be tempted to dismiss Hawaii’s low freedom ranking, it’s impossible to dismiss the real world effects. Locals are leaving this state because it is too expensive and too unfriendly to entrepreneurs, businesses, and young families,” Akina concluded. “If we want to reverse this trend and keep our loved ones here in Hawai‘i, we must look at ways to increase opportunity in the islands. And that means working together for greater economic freedom.”

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