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Hawaii is America's Worst State for Business in 2024, with off-the-charts costs and climate risks rising

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Hawaii is America's Worst State for Business in 2024, with off-the-charts costs and climate risks rising


An aerial image taken Aug. 10, 2023, shows destroyed homes and buildings burned to the ground in Lahaina in the aftermath of wildfires in western Maui, Hawaii.

Patrick T. Fallon | Afp | Getty Images

First came the Covid-19 pandemic, striking at the very heart of Hawaii’s economy.

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Then, just as the state was beginning to recover, came last summer’s deadly Maui wildfires, which killed more than 100 people, destroyed upward of 2,000 structures, did $5.5 billion in damage and paralyzed the state’s tourism industry yet again.

Finishing last in CNBC’s 2024 competitiveness ranking, America’s Top States for Business, seems pretty minor in comparison to all of that. But Hawaii’s economic issues go even deeper than the high-profile tragedies that have befallen the state.

Consider the Honoapiilani Highway.

Hawaii Route 30 hugs the western shore of Maui. Well before the fires, state transportation officials warned in a 2021 report about climate risks that the highway was at risk from rockfalls, landslides, flooding from high waves, storm surges, coastal erosion and even tsunamis. Already, portions of the road frequently close due to flooding.

“Given our understanding of what is changing, we need to make some tough decisions to ensure the long-term viability of the State,” the report said.

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A sign is posted warning of earthquake damage to the road from seismic activity at the Kilauea volcano on Hawaii’s Big Island, in Hawaii Volcanoes National Park on May 17, 2018.

Mario Tama | Getty Images

Hawaii was never going to do well in a competitive ranking that emphasizes infrastructure, as this year’s does. The state is remote — 2,400 miles from the mainland — and as an island chain, basic infrastructure features that are important elsewhere, such as freight rail, are irrelevant. But now, even the infrastructure the state does have is under threat, such as the Honoapiilani Highway.

“That’s the only link to the rest of the island from the area where the wildfires were,” said U.S. Secretary of Transportation Pete Buttigieg, who visited Hawaii in February.

The state is set to receive $2.8 billion under the Bipartisan Infrastructure Law, and nearly half of it will go toward rebuilding bridges and roads. Some $160 million of that will go toward relocating portions of the Honoapiilani Highway.

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“We’re funding them to raise that highway to higher ground,” Buttigieg told CNBC. “We’re not going to make somebody build a road the exact same way if it’s getting washed out year after year by what used to be a once-in-100-years event.”

In an aerial view, cars back up for miles on the Honoapiilani Highway as residents are allowed back into areas affected by the wildfire, in Wailuku, Hawaii, on Aug. 11, 2023.

Justin Sullivan | Getty Images

It will be at least 2027 before the improvements are complete, transportation planners say. Add the many other roads and bridges needing help, and it begins to explain why Hawaii’s infrastructure ranks No. 47 in this year’s Top States study.

The high cost of paradise

Hawaii is also America’s most expensive state to do business in, with the third-highest cost of living. Residents and businesses pay the nation’s highest utility costs, and corporate and individual taxes are high.

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With so many inherent disadvantages, why doesn’t Hawaii finish at the bottom of the rankings every year? The answer, in part, is because it’s Hawaii, with a legendary quality of life. But now, even that is under siege.

Hawaii ranks No. 7 for Quality of Life in 2024, its lowest ranking in the important category since our Top States study began in 2007.

More coverage of the 2024 America’s Top States for Business

It is not that Hawaii isn’t still a paradise. But even in a paradise, working families need child care.

While licensed child-care facilities are readily available in Hawaii, they are prohibitively expensive. According to Child Care Aware of America, child care in Hawaii costs 18% of the median income for a married couple. That is the most expensive in the country, and nearly twice the national average.

Multiple studies have linked quality child care and preschool to economic competitiveness.

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In 2022, the Hawaii legislature approved $200 million in spending for new prekindergarten classrooms, part of a broader goal championed by Lt. Gov. Sylvia Luke to offer universal pre-K for three- and four-year-olds in the state by 2032.

A family walks on the beach together during sunset in Kauai, Hawaii.

Fly View Productions | E+ | Getty Images

“Access to preschool is a social justice issue for Hawaii,” Luke said in a statement at the time. “Children who have attended high-quality preschool or child-care programs are much better prepared for success in kindergarten, but not every family has access to early learning programs.”

The plan was to build 80 new classrooms by this August, with ambitious annual goals after that. But according to a website for the program run by Luke’s office, the program is already falling short of its goals. Two years after the bill was passed, only about half the money has been spent. Just 13 classrooms have been built, with another 50 under construction. The physical facilities are just part of the battle. Hawaii also faces a serious shortage of child-care workers.

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An economy struggling to rebound

Put it all together, and it leads to America’s second-worst economy, according to the Top States study, after Mississippi. It is little surprise that no major companies are headquartered there. Economic growth was modest last year as the state struggled to recover from the wildfires, and job growth was meager at best.

In their most recent quarterly economic outlook, published in June, forecasters with the state’s Department of Business, Economic Development and Tourism predicted that tourism will end the year flat following a 4% drop in the first four months of the year, largely due to the wildfires.

They do expect visitor traffic to bounce back next year, and to continue growing — albeit at more modest levels — through 2026.

But in America’s Bottom State for Business, they have learned the hard way that Mother Nature can have other ideas.



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Episode 43: Volcano Warning issued for Kilauea due to falling ash and tephra

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Episode 43: Volcano Warning issued for Kilauea due to falling ash and tephra


HAWAII VOLCANOES NATIONAL PARK (HawaiiNewsNow) – The U.S. Geological Survey has upgraded the Kilauea alert level to a Volcano Warning due to fallout of the latest high-fountaining at Halemaumau crater.

The National Weather Service also issued an ashfall warning until 5 p.m. Tuesday for Hawaii Volcanoes National Park and communities to the northeast, including Volcano, Glenwood and Mountain View.

Episode 43 began Tuesday at 9:17 a.m. HST with more than a quarter-inch of accumulated tephra, including ash and other volcanic particles, reported within the first 90 minutes.

The USGS said fallout up to the size of footballs was reported at lookouts within Hawaii Volcanoes National Park, creating hazardous ground conditions.

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The National Weather Service said the plume from this episode rose to 25,000 feet. Surface level winds are reported coming from a southerly direction, which means that volcanic gas emissions and fallout may be distributed to areas northeast of the summit.

Communities adjacent and downwind of the eruption need to take necessary precautions for elevated tephra fallout and volcanic gases.

Closures in effect, shelter open

Highway 11 is closed on either side of Hawaiʻi Volcanoes National Park (HVNP) at mile markers 24 and 40. HVNP is also closed.

The County of Hawaiʻi has opened a shelter at Kaʻū District Gym, 96-1219 Kamani St., Pāhala, for residents and visitors impacted by the road closure or falling tephra.

Safety information

Volcanic tephra, including ash, can irritate eyes, skin, and the respiratory system. Take necessary precautions to limit exposure.

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  • If you have a respiratory condition, avoid contact with ash. Stay indoors until it is safe to go outside.
  • Close doors and windows, where possible.
  • Wear masks, gloves and eye protection when in contact with ash.
  • Do not drive in heavy ashfall.

Tephra also can clog and cause other problems with water catchment collection systems.

  • Temporarily disconnect the gutters feeding into the tank. Do not reconnect the system until the volcanic hazards (i.e. ash, laze, Pele’s hair in the air) have passed and the ash and debris are washed off the roof, out of the gutters and the tank.

Use caution when clearing rooftops of ash.

Road closures may occur without warning.

Click here for updates on Kilauea.

Episode 43: Volcano Watch issued for Kilauea(USGS)



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Hawaii pilot program aims to curb evictions | Honolulu Star-Advertiser

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Hawaii pilot program aims to curb evictions | Honolulu Star-Advertiser


A new statewide pre-eviction mediation law that went into effect last month has already had success in keeping Hawaii tenants in their homes.

The two-year pilot program requires landlords to participate in mediation talks before filing residential eviction notices for nonpayment of rent. It’s intended to prevent unnecessary evictions and help ease court congestion by resolving landlord-tenant disputes before they escalate.

The legal basis for the program comes from Hawaii State Legislature Act 278 passed last year and was signed into law on July 2.

This builds on the success of earlier mediation initiatives in Hawaii like Act 57, which was passed by the state House of Representatives in 2021 during the height of the COVID-19 pandemic to curtail a surge in eviction cases. That law required landlords to engage in mandatory, pre-eviction mediation with their tenants and attempt to find mutually agreeable solutions to settle rent disputes before going to court.

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Act 57 ran out of funding and subsequently expired in August 2022. But while it was on the books it boasted an impressive success rate: Out of 1,379 rent mediations conducted by the Mediation Centers of Hawaii (MCH) — an Oahu-based umbrella organization directing cases to local mediation centers — 87% of parties reached an agreement. It is credited with diverting more than 1,200 eviction cases away from the court system.

State lawmakers have praised the new pilot program as an offshoot of the most effective parts of the now-defunct COVID-era bill.

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“We are taking the lessons learned during COVID and testing a professionalized, pre-eviction framework through this pilot program,” state Sen. Troy Hashimoto of Maui said in a news release. “Instead of relying on limited resources in the courts, this data-driven approach encourages early dialogue and allows us to measure how effectively professional mediation can reduce court backlog and resolve disputes.”

Under the new program rules, landlords must give tenants a 10 calendar-day window to seek mediation services before starting eviction proceedings, and must upload eviction notices to MCH’s website. The organization will then direct cases to one of five local mediation centers in Honolulu, Kailua-Kona, Hilo, Lihue (Kauai) or Wailuku (Maui).

If the tenant opts to schedule mediation within that 10-day period, an additional 10 days is afforded for talks to take place before the case can be brought to court. Mediation services are free for both parties, funded with state money appropriated in Act 278 and directed to organizations like MCH.

However, attorney costs accrued by landlords or tenants will not be funded by the state, and if a tenant cancels or fails to attend a scheduled mediation, landlords are allowed to request tenants pay for their attorney fees.

The mediation center contracted to provide services to East Hawaii Island landlords and tenants is Ku‘ikahi Mediation Center, where Executive Director Julie Mitchell has seen the efficacy of the new program firsthand.

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Data is slim because the law has only been in effect for one month, but even early on Mitchell has seen four out of four cases assigned to the center thus far be successfully resolved, with three tenants able to stay in their rentals and one moving out without eviction. The West Hawaii Mediation Center serving Kona-side has successfully mediated five tenants to stay, and one amicable move-out.

Part of this success, Mitchell believes, is commencing talks between parties before back rent builds up and animosity and hopelessness start to grow.

“The idea behind this program is having early conversation and early communication,” she said. “It’s trying to prevent eviction as a preventative measure, to preserve housing, to prevent homelessness. It’s much easier to have a conversation when you’re one month behind on rent than when you’re 10 months behind on rent.”

Although these types of initiatives are often assumed to be more beneficial to tenants, Mitchell contends that landlords have also expressed appreciation at having access to mediation.

“I think it’s a sense of relief,” she said. “For landlords, they usually are a business and want to make sure they can get the money they need to live, oftentimes to pay a mortgage. Eviction is obviously not good for the tenant … but it’s also not good for landlords. It’s very costly to take people to court and to have to renovate and get the property ready for the next person.”

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Ideally, she said, negotiations that the center facilitates will be a win-win for everyone, including the courts.

“When I’m reading the agreements, it seems like it’s advantageous to both parties,” she said. “If the landlords are trying to recoup back rent, they can do that. We want to find solutions that are going to be best for everybody … and the courts are swamped, the judges have a lot of cases on the docket, so this is a way to alleviate those impacts on the courts as well.”

The pilot program will track its success through annual reports to the Hawaii State Judiciary, supplying data that will influence other statewide eviction prevention measures in the future.



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Hawaii to see ‘potentially life-threatening weather’ with massive rain, flooding

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Hawaii to see ‘potentially life-threatening weather’ with massive rain, flooding


The National Weather Service warns of a “high-impact and potentially life-threatening weather pattern” in Hawaii this week, with torrential rainfall, flash flooding, strong winds, severe thunderstorms and mountain snow.

Through Saturday, “we could easily see over 20 inches in the harder-hit areas, but that’s just a ballpark estimate,” said Laura Farris, a meteorologist at the weather service office in Hawaii.

Greater totals are possible atop the state’s volcanoes, which can measure feet of rain from the biggest storms.

The cause is a strong low-pressure system that will bring two rounds of stormy weather to the state Tuesday through Saturday. These systems are locally referred to as ‘Kona lows,’ and are responsible for Hawaii’s most extreme weather during winter months.

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“The high-end potential of this Kona storm is significantly outside the realm of ‘normal’ wet season weather,” the weather service said.

Heavy rain will begin over Kauai on Tuesday morning before reaching Oahu on Tuesday night, prompting the weather service to issue a flood watch for those islands, which is in effect through Saturday afternoon.

A lull in storminess Thursday won’t last long, as “an even stronger disturbance is expected Friday into Saturday with major flooding and damaging winds,” the weather service said. That storm is likely to prompt additional flood watches and warnings for Maui and other Hawaiian islands. About 10 inches of rain is predicted in Honolulu, with 30-plus inches of rain possible atop the state’s volcanoes, through Saturday.

Severe thunderstorms could generate hail and damaging winds, with isolated tornadoes even possible Friday and Saturday. Thunderstorm chances are highest for Kauai and Oahu initially, but the second disturbance over the weekend will raise odds for hail, wind and tornadoes across all islands. Significant snow accumulations are forecast for the summits of the Big Islands.

Hawaii is no stranger to heavy rain, as Mount Waialeale, on Kauai, is one of the wettest spots on Earth and averages nearly 40 feet of rain each year, according to NASA. But rainfall rates are expected to approach 2 to 3 inches per hour within the heaviest bands, too much for even tropical islands to handle without flooding.

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This Kona low will have an abundance of moisture to work with. The low’s counterclockwise motion, in tandem with an anomalous clockwise-spinning high-pressure system to the east, will work to draw abundant moisture toward Hawaii from the south. It’s the same area of high pressure responsible for the spring heat wave that’s forecast to grip the Western U.S.

The moisture transport won’t stop upon reaching the island state. It will continue northeastward toward the Pacific Northwest, where a strong Pineapple Express may raise flood danger early next week.



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