Exodus of Hawai‘i residents since 2020 results in $185M in lost tax revenue to the state

The continuing exodus of Hawai‘i residents has many detrimental impacts to the state, including the loss of young people, the erosion of the host culture, and the separation of family and friends, according to Pacific Resource Partnership a nonprofit organization that represents the Hawai‘i Regional Council of Carpenters, the largest construction union in the state with approximately 6,000 members,

Working in conjunction with the Hawai‘i Department of Taxation, Pacific Resource Partnership obtained approximate data on how much the outmigration of local residents has cost the state.

According to Seth Colby, Department of Taxation research and planning officer, outmigration since 2020 has resulted in the loss of $185 million in general excise taxes and state income taxes, or approximately $61.8 million per year. To place that amount into context, one percentage point of the Council on Revenues forecast, which determines how much can be spent on the state budget, represents approximately $100 million.         

“We know one of the main drivers leading people to leave Hawai‘i is the high cost of housing,” said PRP Interim Executive Director Josh Magno in a news release. “That is why Pacific Resource Partnership continues to advocate for policies and legislation that will lead to the construction of more affordable and workforce housing, which includes the utilization of general excise tax exemptions that assist developers in the creation of viable projects that actually ‘pencil out.’”    

It’s estimated that since 2020, a total of 36,789 Hawai‘i residents left the state.

According to data reported by the state Department of Business, Economic Development and Tourism, between 2020 and 2021, Hawai‘i experienced an estimated net loss of 9,932 individuals when contrasting the influx of residents from the US continent with the exodus of Hawai‘i residents. This trend intensified during the peak of the COVID-19 pandemic, with a net departure of 15,664 people from 2021 to 2022. Subsequently, between 2022 and 2023, the state saw a further decrease, with 11,193 individuals departing Hawai‘i.

Pacific Resource Partnership hopes that by highlighting the detrimental impacts that outmigration has on the state’s tax base, policymakers will be more willing to consider legislation that provides general excise tax exemptions for developers as a possible solution to the construction of new housing.

PRP Government Relations Manager Chris Delaunay said, “By keeping our residents in Hawai‘i, we not only preserve our culture and our families, we also keep our tax base strong to fund all of the programs our residents depend on.”