Ige introduces digital economy initiative during State of the State address

  • FILE - In this Oct. 15, 2020, file photo, Hawaii Gov. David Ige speaks at a news conference at the Daniel K. Inouye International Airport in Honolulu. On Monday, Jan. 25, 2021, Ige asked residents to be ready for more tough times ahead as the state grapples with a large budget shortfall caused by a coronavirus pandemic that’s pummeled the tourism industry, but said improved tax revenue forecasts mean he’s not currently seeking broad-based tax increases. (AP Photo/Marco Garcia, File)

Gov. David Ige’s State of the State address Monday promised big changes for the state, but was light on detail.

Throughout the course of a half-hour speech, Ige discussed at length the impacts the COVID-19 pandemic has had on the state and promised a series of new initiatives in order to mitigate them. However, how those initiatives will work was unclear Monday.

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Ige said the pandemic, now approaching its one-year anniversary in Hawaii, has left the state budget with a $1.8 billion shortfall, left hundreds of thousands without jobs and exposed the state’s unsustainable reliance on tourism as a primary economic driver. Thanks to the pandemic, Ige said, the state’s revenues are not projected to return to pre-COVID levels until 2024.

As a long-term solution to the effects of the pandemic and to diversify the state’s dependence on tourism, Ige announced he is calling for an investment in the state’s “digital economy.”

“(A digital economy) will help us to better weather future disruptions, no matter the makeup of our economic engine,” Ige said. “In a digital economy, it doesn’t matter where your workstation is located. In a digital economy, Hawaii’s workforce can compete globally, contributing to higher wages and a higher quality of life. More importantly, we can keep our kama‘aina here to reverse the brain drain. Because, in a digital economy, our children won’t have to move to the mainland to secure good jobs.”

The digital economy initiative — which Ige also referred to as “Hawaii 2.0” — will seek the input of state business communities and former governors, who will make recommendations that can influence the 2022 legislative session. What, specifically, they will be trying to accomplish was ambiguous.

As part of Hawaii 2.0, Ige said the state must invest in widening its broadband coverage, noting that the pandemic has highlighted and exacerbated the poor internet availability in rural areas of the state. About this Ige was more specific, saying the state Department of Transportation will accelerate a pilot program to connect rural communities — including Puna, Ka‘u, Hana, Nanakuli, Waianae, Waimanalo, Kalihi and Kapa‘a — to broadband service, and that he will introduce a bill this year to create a Broadband and Digital Equity Office to oversee the expansion of online services.

Ige also mentioned a new goal to build 3,000 new affordable housing units by the end of 2022, after the state achieves a previous goal of building 10,000 new homes by the end of 2020.

The speech did not include many short-term plans, however. Ige said the state will pay $165 million in interest payments on a $700 million loan that the state Department of Labor and Industrial Relations secured to provide unemployment insurance to workers last year.

Ige also reiterated that a recent report from the state’s Council on Revenues projected that Hawaii will generate nearly $6.3 billion in tax revenues this fiscal year, which will somewhat mitigate the impact to the state’s budget. Unfortunately, he added, while layoffs of government workers might be reduced as a result, they won’t be eliminated entirely.

Ige’s address also did not mention his plans for tax increases, which he clarified after the speech. He said he remains opposed to a broad tax increase, but is open to specific taxes such as a sugar tax. More details on potential tax hikes were absent.

Members of the state House of Representatives were critical of Ige’s speech, saying it was painfully short on specifics.

House Majority Leader Della Au Belatti said part of Ige’s speech could have been a conversation about what’s happening with the state’s tourism economy.

The Legislature already had conversations about how tourism will have to be rethought, Belatti said, “so some more guidance on those areas would have been helpful.”

House Speaker Scott Saiki — who Ige said will be working on the Hawaii 2.0 plan — said after the speech that creating a new office to expand broadband coverage will be difficult as budget cuts shrink the size of state government.

“The governor needs to, and I have asked him publicly, to stop governing by consensus,” Saiki said. “There’s a point in time now we just need to make decisions, where we need to make hard decisions and we need to make quick decisions. We will never gain consensus on major issues that face our state.”

Saiki said he hopes the governor’s administrative package, which will be introduced in the coming days, provides more details on specific plans and initiatives.

Ige said, responding to Saiki’s criticism, that his legislative package will include nearly 200 bills enumerating his specific plans and added that providing all the details of those bills would have led to a day-long speech.

Lt. Gov. Josh Green was diplomatic in his assessment of Ige’s address, saying during a livestreamed interview that the governor gave “a pretty thorough accounting of the state right now.”

“I think there do remain a lot of important questions to ask still, and I think the aspirational state of Hawaii does still hang over us,” Green said. “I think the time is coming where we’re going to have to have a vision for where Hawaii goes after the COVID crisis has left us, and that is coming. … Right now, (Ige) has had to dig in very deep to this crisis, and I think he did a good job on spelling out what we’ve been through and what the immediate concerns are going to be.”

Outside of policy, Ige also said Monday that the state is monitoring incoming visitors for signs of new COVID strains that are proliferating around the world. One such strain — designated L452R — was detected Monday by the state Department of Health and, while there is no evidence yet that the variant is deadlier or more contagious, Ige said residents should continue to maintain coronavirus-mitigation practices such as social distancing and wearing masks in public.

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Ige said there are no plans to remove the 14-day quarantine requirement for incoming travelers who have been fully vaccinated against COVID-19. Any such plans will be contingent on guidance from the U.S. Centers for Disease Control and Prevention.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.