Total personal income for Hawaii residents will decline by 7% this calendar year and will remain flat in 2021 because of more anticipated fallout from the coronavirus pandemic and the tourism shutdown, according to a panel of experts that projects overall income data and tax collections for the state.
Members of the state Council on Revenues agreed Thursday that there will be more business closures in the weeks ahead — especially if the reopening of the state tourism industry is delayed again.
Council member Kristi Maynard described a decline in income on the order of 7% as “shocking,” but probably accurate.
Carl Bonham, a council member and executive director of the University of Hawaii Economic Research Organization, said the collective decline in income would be even worse if not for the extra unemployment benefits and stimulus payments from the federal government that have been helping to offset some of the losses in workers’ earnings.
Congress and President Trump are expected to approve another round of stimulus payments and other assistance in early August, but that support will likely run out in 2021, Bonham said.
While the tourism industry is expected to reopen to some degree in the months ahead, Bonham said the state must get Hawaii’s current surge in COVID-19 cases under control before the economy can even begin to bounce back.
“I’m reasonably optimistic that we’ll see tourism reopen in September (or) October,” perhaps by establishing a tourism “bubble” with Japan or some other area, he said.
Looking ahead to the possibility of a broader reopening of tourism as early as Sept. 1, Bonham said that “the fact that we still don’t have an announced plan that tells the public and the tourism industry what all the details are is disturbing, to say the least.
“Even if we’re not going to move forward with it, if you don’t have the plan, the longer that goes, the less likely we open on Sept. 1,” he said.
Bonham added that “obviously, the bottom line is, if we don’t get our own outbreak under control, no one is going to want a travel bubble with us, and if we don’t get our outbreak under control, the community won’t be willing to open to tourism.”
The state set a new record with 124 new coronavirus cases Thursday. Honolulu Mayor Kirk Caldwell announced Thursday he is closing Oahu bars for three weeks effective Friday to try to control the spread of the disease.
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