How low will it go?
County economy continues to lag
HILO -- Statistics show the economy continues to bottom out in Hawaii County.Last fall, administration officials were optimistic the Big Island's economic decline had fallen as low as it could go and that it could only start to get better.
Statistics compiled by Information Resource Specialist Colette Rapoza-Yamamoto with the
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Mayor Billy Kenoi -- whose administration estimates the county's budget will operate with a $31.9 million deficit in the 2009-10 fiscal year -- said Friday the situation will continue to get worse and that the end is nowhere in sight.
"We've been talking to economists and there's still a lot of uncertainty as to where the bottom is," he said.
In comparing statistics of the past two years, the number of domestic visitors to the island dropped 21 percent, the total value of building permits authorized dropped 16.7 percent, cruise ship arrivals dipped by 47.6 percent and the ranks of the unemployed increased by a staggering 69.2 percent.
In 2007, the value of building permits authorized was $964 million, but in 2008, the total was $803 million, according to the statistics.
Domestic visitor arrivals to the island in 2007 totaled 1.3 million but in 2008 the number dropped to 1.02 million.
The number of cruise ship visitors in 2007 was 488,515, according to the statistics, but in 2008 there were only 255,908 cruise ship arrivals.
The number of unemployed residents in 2007 was 2,892, but in 2008 the number climbed to 4,892, according to the statistics.
Breaking it down by employment types, the hardest hit job market was the natural resources, mining and construction category, which experienced a 7 percent drop, according to the statistics.
In 2007, there were 5,767 jobs on the island in that category, but in 2008 that number dropped to 5,363, according to the statistics.
The government job category, meanwhile, has kept its head above water better than any of the other categories on the list. In 2007, there were 12,192 government jobs, but in 2008 there were 12,733, which constitutes a 4.4 percent increase.
Ryan Markham, spokesman for the state Department of Labor, said Friday the amount of unemployment benefits paid out to Hawaii residents more than doubled in 2008.
In 2007, the state paid out $93.5 million in unemployment benefits, but in 2008 paid out $212.3 million, he said.
Markham said the department does not have the ability to break down what was paid out specifically on the Big Island the past two years. He said it would require a new computer program and added department officials would be "uncomfortable" in trying to estimate it.
Employers pay unemployment taxes to both the state and federal government, and employers who have a propensity to lay off more employees are taxed more than those who have minimal layoffs, Markham said.
The money collected by the state goes into a trust fund, and money from the fund covers the first 26 weeks of a laid-off employee's benefits, he said. The money collected by the federal government also goes into a trust, and money from that pays for 20 additional weeks of unemployment benefits for laid-off employees who are still out of work after 26 weeks, Markham said.
The economic stimulus bill signed into law last Tuesday by President Barack Obama will give those eligible for unemployment benefits an additional $25 per week, but all of that money will come from the federal trust, Markham said.
The amount of unemployment taxes the state collects from Hawaii employers annually, however, has been less than what it has been paying out, he said.
In 2008, for instance, the state collected about $60 million in unemployment taxes, but paid out $212.3 million, Markham said.
The state was able to handle the excess payouts because it had built a hefty fund balance over the years when economic times were good, he said.
In January 2008, the fund had a $552 million balance, but by the end of the year it decreased to $430 million, Markham said.
He added the amount of unemployment benefits paid out in 2009 is expected to top what was paid in 2008, and that it could be as much as $300 million.
As for the decline in tourism, Daniel Nahoopii, tourism research branch chief with the state Department of Business, Economic Development and Tourism, said the loss of two of the three cruise ships that visited the Big Island has helped to eliminate many tourist dollars.
He said cruise ship tourists on average spend $65.90 per day. In doing the math based on Rapoza-Yamamoto's figures, that means the island lost more than $15 million in 2008 because of the decline in cruise ship visitors.
While most cruise ship visitors only spend one day on the island, the tourists who vacation here spend much more per day -- about $158 per person, Nahoopii said.
In 2007, tourists overall brought in $1.69 billion, he said, but in 2008 brought in $1.44 billion.
Whether the island's tourism industry will improve in 2009, Nahoopii said he did not know.
"A lot of it is based on the economy of our major markets like California and the West Coast," he said.
DBEDT and the Hawaii Tourism Authority are now looking at ways to bring in more tourists from Asian markets like China and Korea now that it has become easier for people there to obtain passports.
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ukulele wrote on Mar 1, 2009 9:01 AM:
Unless Hawaii adopts a greener policy of beach development it will only follow in California's footsteps. "