Testimony in Support HB 2169 AND HB 2207 With Amendments Incorporating HB 2201

January 26, 2010

Testimony in Support HB 2169 AND HB 2207 With Amendments Incorporating HB 2201 – 1/26/10 LAB 9:00 a.m. Room 309

Ladies and Gentlemen of the Committee of Labor and Public Employment:
We respectfully support the intent of HB 2169 and HB 2207 With Amendments Incorporating HB 2201.   I appreciate the efforts made by the chair and the committee in addressing the unemployment insurance tax increase.  Although HB 2169 provides a mitigated tax increase, I strongly support the language of HB 2201 as this will provide a more incremental tax assistance for my business.  In a recent survey of our members, more than 75% said they would need to take drastic measures if they are suddenly forced to contend with more than a 1,000 percent jump in unemployment insurance tax rates.
These drastic measures include limiting hiring, reduction in work opportunity for employees, layoffs of employees, or outright business closure.  Ultimately, more workers will file for unemployment, which would further deplete the state’s unemployment fund exacerbating the current problem.  Ironically, the very effort to rebuild the state’s unemployment fund would lead to the exhaustion of the fund.

We implore the state to consider other sources of funding before implementing this steep increase in the unemployment tax rate.  If increases are necessary, any increases in the unemployment tax should be done incrementally over the course of a few years so businesses can adjust and adapt by budgeting accordingly.
An industry with over 3,500 locations directly employing over 82,000 dedicated people, Hawaii’s restaurants are a cornerstone of Hawaii’s economy.  Many of those employed in the industry include new immigrants and those who are starting in the workforce.  Yet these are the individuals that would be most affected by layoffs or reduction in hours that a 1,000 percent spike in the unemployment tax rate.
In closing, the Hawaii Restaurant Association reiterates its support for the incorporation of language from HB 2201.
Very truly yours,
The Hawaii Restaurant Association

By:  Bryan P. Andaya