HAWAII: Overview of Year Ahead

by Peter Cooper, California Labor Federation, AFL-CIO

Overall Hawaii's economy and state budget is doing very well compared to that of other Western states. The film industry is booming compared to the previous year, even without the passage of last year's film tax credit measure, but still is in need of support to help it compete on the world market. Digital media, television, and film production expenditures in 2004 are estimated at $146 million, which is better than 2003, which saw $84 million spent on film, but only on par with 2002 ($147 million). The increase resulted from just three Hawaii-based network television series that were produced in Hawaii.

This year we will see a number of bills aimed at making it more profitable for businesses to operate in Hawaii by decreasing insurance costs and providing tax subsidies. Recent studies have indicated that Hawaii still does not have the best business climate, due to the high cost of living and the cost of shipping goods to and from the island.

Cutting Employer Costs at the expense of the Social System: Employers are arguing that Medical insurance costs are rising monthly and the added expense is passed along to businesses in Hawaii. This year we can expect attacks on the Prepaid Healthcare Act of 1974, which requires employers to pick up at least half of the cost of health insurance for their workers. Although changes would be unpopular and difficult, some state Republicans are attacking the prepaid health plan. Sen. Sam Slom, (R, Diamond Head, Hawaii Kai), says small business is hurting because of the ever-increasing benefits mandated by the Legislature. A plethora of bills have been introduced that seek to change the workers' compensation system in Hawaii as well.

Supporting Film Production: At least ten bills have been introduced that hold the same language of the film tax credit measure that failed in the final days of the last legislative session Last year's bill was expected to be signed but then, at the last moment, the Governor found out that the state faced increased costs from a union contract for state workers that was unexpected and vetoed the bill on fiscal grounds. So the chances seem good that something will pass this year, if the budget remains strong.

It is too early to tell if this will be the language that will emerge from the final bill sent to the Governor or if this is simply a placeholder. The language increases the existing 4% tax credit on Hawaii production expenditures up to 15% for productions on Oahu and 20% for productions on the Neighbor Islands.

Additionally, a bill has been introduced to exempt extended hotel stays by film crews from sales tax (HB 5492) and a bill to be used in the budget process to get more funding for film promotion (HB 1590).

Bills to support labor rights are moving this year as well. SB 1561 will raise and index the minimum wage, SB 55 will ensure meal breaks, SB 533 and SB 535 strengthen sick leave rights, and SB 536 and SB 537 strengthen the right to picket.

[return to top]