In the early 2000s, Hawaii subsidies caused significant financial harm to the state coffers. Following that debacle, the state eliminated or cut ineffective and costly programs, such as the High-Technology Tax Credit. Nevertheless, Hawaii keeps using other tax breaks to attract film production and research companies, and those programs have little transparency.
The Department of Business, Economic Development and Tourism (DBEDT) and the Department of Taxation (DoTax) manage subsidies. The DBEDT certifies company claims and DOT processes them. The counties manage Enterprise Zones activities, along with DBEDT.
Hawaii has very poor open records laws when it comes to subsidies. Only company names are available for two subsidy programs: the Enterprise Zones and the Tax Credit for Research Activities. No subsidy amounts, jobs, and wage data are available. Big blockbusters movies and TV shows – Hawaiʻi Five-0, Lost, or The Descendants to name a few – have been made in the state but the residents have no information on how much those productions got in film tax breaks.
Tax-based subsidy costs are included in the annual “Tax Credits Claimed by Hawaii Taxpayers” reports published by DoTax. Lost revenue disclosure under the GASB 77 rule is minimal in Hawaii – the state does not include any programs, and only a handful of localities report under the rule (public education is managed by the state and therefore there is no reporting of school lost revenue under GASB 77).
- See our analysis of GASB 77 data from 2017-2021 on our Hawaii State Fact Sheet.
- See who is responsible for the implementation of GASB 77 on our Hawaii State Road Map.
The Office of the Auditor is charged with evaluating subsidies on a 5- or 10-year cycle, depending on the program. A 2021 evaluation concluded that another agency with expertise and resources should perform additional cost-benefit analyses of tax credits.