Editor’s note: Civil Beat reporters and editors met Tuesday with Sumner La Croix, professor emeritus of economics at the University of Hawai‘i Mānoa, and Steven Bond-Smith, an assistant professor at the University of Hawaiʻi Economic Research Organization. La Croix is also part of UHERO.

The interview was edited for length and clarity and with an eye toward future reporting. La Croix began by discussing President Donald Trump’s confusing trade policies.

La Croix: I think we’re in uncertain, dangerous times. The uncertainty level is really high, and I think that that’s really unfortunate. It’s making it hard for people to plan, or even to think about what’s going to be happening over the next few months. Maybe the tariffs that we’re seeing will disappear quickly. They might — that’s certainly possible — or maybe it’s going to be around for years to come.

I think the lack of certainty in the Trump administration’s policies and policy rhetoric is really troubling, just because I think it’s leaving a lot of people paralyzed, whether we’re talking about consumers or firms or people trying to figure out the effects of economic policy. Internationally, we’re in dangerous times because we seem to be antagonizing a lot of our friends. We’re basically threatening them with economic policy measures. In the past, we’ve had more discussions and negotiations about economic policy, and these threats about economic policy are making people wonder, is the U.S. still our friend?

Certainly we’re seeing that with Canada, but I see that in conversations with other people around the world who are from U.S. allies, whether I’m talking to friends in Portugal or Australia or Great Britain. I mean, people are just wondering, what exactly is the attitude toward this long-time ally of the United States, or longtime friend, and I think that that’s the most problematic thing. That’s not only a security issue, it’s also an economic issue. In order to have good economic relations, you need trust.

Bond-Smith: I can also add to the discussion about uncertainty and risk and tariff policy and cutting government spending or government employment. But I also want to add this Hawaiʻi perspective. I work a lot on regional economics, and particularly thinking about regions that are relatively smaller and relatively isolated. This is what I’ve built my research on, looking at both Australia and New Zealand and now Hawaiʻi. And you know, these economies that are really small, they naturally do specialize in something, and that can be really beneficial for a while, but then you’ve got all the eggs in one basket at that point, and it becomes quite difficult to diversify.

I see this same pattern in New Zealand and Western Australia and Hawaiʻi — really specialized in their main industry, which was really lucrative for a while, but then follows by the period of stagnation, when it’s really difficult to diversify. And Hawaiʻi has been in this well before the current administration, this long-run, relatively slow growth trend, that kind of tourism hit its peak, and it’s steady as she goes and not providing much growth. And because of that, Hawaiʻi is falling behind the rest of the U.S. And so everyone in Hawaiʻi talks about the cost of living in Hawaiʻi.

I’ve been doing some work on price differences, regional cost of living differences, and Hawaiʻi has always been a really expensive place to live. It’s not that Hawaiʻi suddenly became more expensive relative to the mainland. It’s always been much more expensive relative to the mainland.

“The lack of certainty in the Trump administration’s policies and policy rhetoric is really troubling.”

Sumner La Croix, professor emeritus of economics at the University of Hawai‘i Mānoa

The big difference right now is that our productivity growth has been lagging behind for so long that incomes in Hawaiʻi haven’t kept up with incomes on the mainland, and so that’s when those incomes don’t go as far with our high cost of living. That’s what sort of generates that pressure for kamaʻāina to move to the mainland. But largely it’s a productivity problem. If you can address cost of living, that’s great, and that’s helpful. But the real issue, I think, is about a lack of productivity growth, which is quite characteristic of these small, isolated economies that are really specialized in their main industry.

Let’s stay with the federal level for a bit. I have heard that word “uncertainty” over and over again. I haven’t heard the words “danger or dangerous” as much, and I wondered if you might explain that a little bit more.

La Croix: I mean, in some ways at the international level, we’re also talking about us trying to get closer relationships with Russia. I think that’s a dangerous policy for the United States. The talk about having enhanced economic relationships with Russia is far too premature. Russia is an authoritarian place that we have very little in common with, and we should be very careful about what we’re doing. Instead, we’re rushing in whole hog. That may not have much to do with the Hawaiʻi economy, per se. But it does have a general focus on the international atmosphere. It’s really not clear to me where that’s all going to lead.

Clearly, we’re antagonizing some of our European allies. It’s not clear we stick with the NATO umbrella, all that kind of thing. I think it’s a dangerous time because we’re making a policy break in foreign relations with what we’ve had before, and foreign relations are not just how we deal with countries on a military basis, on our particular policies toward them. It’s also economics.

And I just think our allies around the world are concerned that we’re breaking away from them, in some cases, needlessly — Canada being the big example. It’s just very hard to see what the Trump administration thinks it can get out of this economic war with Canada. And I think that’s the only way to talk about what’s going on with Canada. It’s an economic war that’s being declared for no reason, that at least I can see, whatsoever. For example, in automobiles — there’s a strong, integrated North American market in automobiles that actually works really well.

The Canada-U.S. relationship has always had trade problems. It’s always been problems with dairy goods. You have all these farmers in Wisconsin and Minnesota producing milk and cheese, and then there’s all these farmers just north of the border, producing milk and cheese. So both economies run into these problems. They try to dump surpluses on both sides of the border. These are normal, everyday economic problems that will be around for a long time. Same thing with lumber, OK?

But this widespread attack with the use of very high tariffs, it’s unclear to what purpose it’s there, plus the annexation threat. The annexation threat, I think, is important for Hawaiʻi. It makes me wonder, will Canadians want to come to the U.S.? And in particular, since we’re talking about Hawaiʻi, would they want to come to Hawaiʻi? It’s really unknown.

Bond-Smith: On your point about the integration with the Canadian economy, if we think of the regions of Canada like regions of this great North American economy, there’s so many goods flowing back and forth continuously, and our economy has become structured about that — that little components, little processes can happen in the places where they’re more efficient to do those things. So when you go and put in these tariffs, what happens is people have to try and prevent those transactions crossing borders, and then some of those activities are going to happen in places that are less productive, right? So that causes downward pressure on wages that makes it harder.

“Hawaiʻi has always been much more expensive relative to the mainland. The big difference now is productivity growth has been lagging behind. Incomes haven’t kept up.”

Steven Bond-Smith, assistant professor at the University of Hawaiʻi Economic Research Organization

Those places aren’t as productive as they were before, and they can’t pay as good a wage as they could before. So even if it does attract some activity back to the U.S., that activity is less productive than when it occurred in Canada, and those people in the U.S. were doing something different, right? So it’s not really clear what the goal is from all of this, because it’s shifting stuff between buckets but also shrinking those buckets, and that makes GDP go down. It doesn’t generate growth, even if it does generate the share of consumption that happens to be produced locally.

I think there’s also an interesting parallel to draw on the tariffs thing with Hawaiʻi — Sumner knows a lot more about this than I do — using tariffs to create pressure on the Hawaiʻi economy that then created tension and unsettlement that ultimately led to the overthrow.

La Croix: The second half of the 19th century, Hawaiʻi’s sugar market really wasn’t going very far. If you’re looking at the 1860s there’s a big boom in Hawaiʻi’s sugar market due to the U.S. Civil War. And then after the Civil War ended, traditional sources of supply from the U.S. South started up to places like California. Hawaiʻi’s sugar industry kind of stagnated. The U.S. at the time had a very high sugar tariff. It ranged anywhere from 35% to 60% depending upon the particular time that we’re talking about. But if Hawaiʻi-U.S. (trade) could get an exemption from that tariff, then other foreign producers have to pay the tariff and Hawaiʻi could come in — the term is called “under the tariff umbrella.” It’d be exempt from the tariffs, and so it would make some big bucks. That was the Hawaiʻi-U.S. reciprocity treaty of 1876.

What happens later is the U.S. basically decides, “Oh, maybe we’re not going to exempt you from the treaty.” So after Hawaiʻi has made all these investments in sugar plantations, now they say, “Well, maybe you’re going to have to pay the tariff unless, of course, you give us access to Pearl Harbor, give us the rights to Pearl Harbor.” And then that led to the Bayonet Revolution, the partial overthrow of King Kalākaua when Queen Liliʻuokalani comes back in.

What does the U.S. do? They end the tariff on sugar. And so all of a sudden all these sugar plantations in Hawaiʻi are very unprofitable. That’s one of the major reasons leading to the overthrow of the queen in 1893 — the fact that the sugar tariff had been eliminated. It’s not a pleasant type of experience when a small country makes investments based on trade and given access to a large country’s market.

Bond-Smith: Canada’s restructured its economy around trade with the U.S., and that’s why it has 25% of its trade with the U.S. Its economy has tilted toward the U.S., much like Hawaiʻi’s economy had tilted towards the U.S. in the pre-annexation period.

La Croix: Whereas from the U.S. side, Canada’s a small part of our imports and exports. It’s not trivial at all in dollar terms. It’s large because the U.S. is a large economy. But from the Canadian side, it’s much, much larger. It’s much, much more important. That’s one of the problems with trade. There’s always asymmetries between large countries and small countries. Small countries, when they enter into these trade agreements, they rely really on the goodwill of the large country and saying, “We’re serious about this agreement. We’re reasonable partners. You can trust us that we’re not going to take actions that will disrupt the agreement.”

Now you can go through trade history and find all sorts of instances, not just with the U.S., but where countries have entered into these kind of agreements, other countries have become dependent on them, and then the rug has been pulled out from a smaller country.

Bond-Smith: So the two countries mutually benefit from the trade integration, but one country then holds a little bit more power in that relationship.

I want to clarify a couple things on the dairy issue — for instance, there’s been a lot of talk about Canada having 200% tariffs, which isn’t actually quite true. It’s really that Canada has a quota where they only allow a certain amount of imports, only if they go over that quota, you end up with this 200%. And what it is they’re trying to protect is a certain amount of local capacity, right? And this is for food security-type purposes, as opposed to tariff and trade war-type purposes that it’s sort of made out to be.

We had hotel executives in here the other day, and Canada is, I believe, the fourth-largest market, after the U.S. West, U.S. East, Japan, although maybe Japan now is fourth, I don’t know.

Bond-Smith: Japan and Canada are about the same size.

I do want to ask you about Japan as well, but how much of an impact is Hawaiʻi going to feel because of this tariff war with Canada in particular?

Bond-Smith: Japan has more visitors than Canada, but the Canadians stay longer, and in total their spending per day is about similar. So Japanese used to spend a lot more, but the yen is much weaker than it used to be, so there’s a lot less advantage for things like retail trade that the Japanese used to spend a lot of money on. So in terms of its value to the Hawaiʻi economy, Canada and Japan are now about on par, but we have swung much more toward the U.S. than we were in the past. The U.S. is the critical part. And if the U.S. economy goes into recession, that will really hurt Hawaiʻi visitors, more so than the effects on other international markets.

But in saying that, I read Canadians are doing 25% less road trips to the U.S. at the moment. I don’t know what their travel is, but the effect on plane travel could be even more. If people are tightening their belts and they’re cautious, then they’re not going to spend on luxuries like a vacation in Hawaiʻi.

On the Japanese market, hotelier Jerry Gibson the other day said, “We’re never going to see the Japan market return like it was to pre-Covid levels.”

La Croix: That’s really hard to say. I mean, if I had to just say yes or no to that, I say yes, but I think it has to be a very temporary answer here. The Japanese economy is having lots of problems of its own. In some sense, it’s revived in recent years, but it has this big demography problem. And the big demography problem is that most of the population is becoming increasingly composed of senior citizens, of people over the age of, say, 55. And basically seniors don’t travel as much in Japan. The Japanese market has always been a young market, and so the bottom line here is just there’s fewer young people.

And this is worrisome to the industry. A lot of the seniors that used to come are people who came here in their youth and liked Hawaiʻi really a lot. Then they came back two or three times. Today, we’re just getting less of that. So that’s the long-term concern.

“The thing to remember with tariffs is tariffs are a tax, and taxes sort of serve two purposes. They either raise revenue, or they change behavior, or some combination of those things.”

Sumner La Croix

The exchange rates, too, are really depressed for Japan, and they’ve been depressed since about 2021. There’s been some fluctuation since, but the dollar has been extremely strong since then. It’s not clear that that will persist. There’s lots of forces that might lead to the dollar weakening. I’ve done travel recently to Japan in December, and in Tokyo I constantly found prices that were way out of whack, where international purchasing power parity just didn’t apply. And that’s the kind of thing you’d expect, some exchange rate adjustments, at least gradually down the road, maybe not all at once.

I would expect the yen would appreciate a little bit. But this also depends on their economic policy. They’re struggling to basically figure out where do they want to go with their economy, what types of policies they need until they get a better fix on their own economy. I still expect to see sluggish growth in Japan.

Right now, we’re in that neighborhood of about 50% of the travelers that were here in 2019 are back. We could well look up four years from now and see 80%, but I don’t think we’re gonna be back to where we were before. And that’s unfortunate for the Hawaiʻi economy, because we have lots of specialized workers who are specialized in the Japan market. They had the language skills, they had the cultural skills. They knew what Japanese wanted on their tours. Many of those people have moved off to much less productive jobs.

Bond-Smith: There’s been a big jump in inflation. The cost of hotels and the cost of vacation went up higher, went up faster than the regular rate of inflation. And then, in addition to that, the weak yen adds 30% to the cost of their Hawaiʻi vacation. So it becomes significantly more expensive for Japanese to come back to Hawaiʻi than it was pre-Covid. So that’s a big headwind for them, for that market recovering.

The other thing I want to note is the market recovered relatively gradually, but then it kind of leveled off at about 50% and it’s been leveled off now for around a year at that 50% level. That’s sort of suggesting that further growth is going to obviously be really hard to come by.

What should we non-economists be worried about on a real-world basis? What can regular people expect to see coming up, given all the turmoil and everything that you are all talking about?

La Croix: I think on the on the national economy, the Trump policies could be put into three bins. One’s basically tax policy, the second bin is immigration policy, and then the third bin is trade policy, with tariffs. Trump occasionally says we’re going to make tons of money from tariffs. If that’s the case, the tariffs have to be somewhat permanent. If they’re just short-run negotiating tools, we’re not going to make a lot of money. He kind of wants to have it both ways. Are we going to have these permanent 25% or 20% tariffs, or is it just something where we’re trying to threaten Canada and get something out of Canada, and then we’re going to move back to a much lower level of tariffs?

So now you have no idea what’s going to be happening with trade flows. Do you want to invest in a company, an international company, that exports a lot or not? Hard to know. So let’s instead buy U.S. Treasury bonds. Let’s invest in the safe asset. And so that appreciates the dollar. On that one box, that’s a big deal for Hawaiʻi tourism, because for foreign tourism we could well find that the higher dollar makes it even more expensive for Canadians, Australians, New Zealanders and Koreans.

Here in Hawaiʻi, will we see our rents go up? Will we see the price of cars go up? Will it be more expensive to buy, I don’t know, milk? What do you see as the real bottom line that we might see?

Bond-Smith: The effect of tariffs themselves add to the cost because you have to pay the tariff. But the uncertainty, what that means is that companies and businesses can’t make the sort of investment plans that they can. So this is also going to add (to) a long-run pressure on reduced productivity. That will certainly add to costs, but it means that we won’t benefit from the productivity growth that could have occurred in the absence of that uncertainty.

And I would actually treat the uncertainty as sort of a fourth bucket, because the source of that uncertainty is not just the tariffs, but also the job cuts, right? Because this has gone through executive orders, and then it’s held up in court, and the courts are all one way, and then they have to go reinstate the temporary workers, probationary workers. When it’s uncertain, you hold back. You might not go out and spend as much because you don’t know what the economy is going to be like six months from now or a year from now, and that itself can be then self-fulfilling, that it restricts people’s investment decisions, or willingness to take a new job, or willingness to start a new business — they know they don’t necessarily want to take those kinds of risks.

La Croix: I think you might see some higher prices from the tariffs. I mean, I think this is one of the pernicious things of President Trump right now, is he’s out there saying, “Oh, tariffs might lower prices.” They don’t. They just don’t. You can come up with specific situations that aren’t really very applicable to us, but in general, these tariffs are going to increase prices.

You guys had a good article the other day noting that construction firms, looking at these higher prices of steel are wondering, “OK, are they really going to be higher, or are the tariffs going to be taken off?” But if they are higher, that’s going to increase costs in the construction industry. That means a few less construction jobs. And then going back to the average person, there’ll be a few less construction workers with jobs.

I think the thing to remember with tariffs is tariffs are a tax, and taxes sort of serve two purposes. They either raise revenue, or they change behavior, or some combination of those things. If they’re changing behavior, they’re not really raising a whole lot of revenue. So if they’re changing behavior and making it that people buy more local U.S. products, those products are probably more expensive. That’s the reason they were buying imported products in the past, is because those were cheaper.

So it’s not going to raise a whole lot of revenue, but you’re still going to be paying more for those products, right? The additional costs are far more than the amount of revenue that gets raised.

You touched on recession and talking about the impact on travelers to Hawaiʻi. What might a recession mean, and what is manageable?

Bond-Smith: To be clear, we’re not heading for a recession yet. Recession implies that growth is negative, and growth forecasts have simply come down. They were relatively higher and then gradually edging down. And if it continues, it’s probably going to edge down further, and that puts the risk of recession up.

“Construction’s got all these federal contracts right now. There’s all these buildings going up in Kakaʻako, and with tariffs and with deportations, that could be pushing the costs of construction up that then creates headwinds on growth.”

Steven Bond-Smith

If there is a recession, Hawaiʻi’s visitor market is 80% to 85% U.S. visitors, right? And when there’s a recession, people are going to cut back on luxury spending. They’re not going to take an expensive vacation to Hawaiʻi. They’re going to holiday locally. So that’s really what hurts Hawaiʻi. And if you look at the visitor industry in Hawaiʻi, look at visitor spending, or visitor numbers, there’s these big puncture marks.

And the biggest puncture is obviously Covid. But there were big punctures as well when we had the 2001 recession, the 1991 recession — each one of these was a decrease in visitor spending and visitor numbers. And that results in job losses in Hawaiʻi. And when people lose their jobs in Hawaiʻi, it’s expensive to stay here, and they also tend to leave as well. And you get these periods of out-migration.

What locally would you recommend the governor and the mayors do to deal with these uncertainties?

Bond-Smith: There’s two things I would point to. One is just not to add to that uncertainty. Be very clear with what local policy is going to be and do not make that any more uncertain than necessary. And the other thing is, when there are cuts to Medicaid, that’s really going to hurt a certain segment of the Hawaiʻi population that will really have to be compensated by the state; they could mitigate some of those costs to that group of people.

La Croix: I think the big worry at the state level is the Medicaid program, just that the budget resolution in Congress seems to have in it some indicators that the only way you can actually meet the budget, which they basically have to do, given the way that the funding process is set up. Looks like there’s an $800 billion cut coming up in Medicaid over the next few years. That’s something that’s really important for Hawaiʻi, because we’re one of the states that did extend Medicaid. The expanded access to Medicaid is 90% paid by the feds, so if that’s cut back, the state is going to have some tough choices to make.

Do we cut back on services? Do we have fewer people be eligible? Let the number of people uninsured rise, or do we step in with more funding? It just depends on the size of the cuts. If they’re really small cuts, we might just step in with extra funding, but they’re likely, if they turn out to be large cuts, then some combination of all three. That’s the kind of thing the governor and his administration were pre-planning — from all that I see, I think they are.

Bond-Smith: And it’s not just the people that access Medicaid services. There’s a lot of healthcare employment in Hawaiʻi and the shortages of nurses and so on. And if there isn’t enough funding for these jobs, then those sorts of shortages are going to get worse.

Maui recovery and rebuilding — where are we now?

La Croix: In many ways I don’t think we’re doing too badly when I compare it with other major fires and the recovery from those fires. I think we’re actually doing all right. I’m a little disappointed just that building permits have not been expedited on Maui. I think we actually did a much better job of that way back in 1992 after Hurricane ʻIniki. I wish there had been a joint program by the state and the County of Maui to really expedite this forward. I’m not that actively involved in this particular issue, but that’s the number one comment I hear — delays.

On the other hand, the state has been heavily involved in the Maui recovery. It’s not like they’ve been absent. They’ve tried to do all sorts of stuff, including trying to get the damages resolved quickly. If you take Maui tourism out of the state totals, the state totals look pretty good. We’re back to where we were in 2019.

Bond-Smith: The thing is, on Maui, tourism is a much bigger share of their economy than it is for the state as a whole. So for Maui, once you include the indirect effects, it’s about 40% of their economy, whereas for the state as a whole, it’s around 20%.

Just wanted to briefly return to immigration policy and how it might impact on the dynamics of labor in Hawaiʻi.

La Croix: I think the big thing — this is an area where there’s uncertainty — is Trump actually deporting 8 million people, as he has suggested, or we’re going to find 1 or 2 million people deported? It makes a big difference just in the size of the labor market effects. If 8 million people are deported, that’s a serious shrinkage of the U.S. labor market. And even though Hawaiʻi, by the estimates I’ve seen, doesn’t have that many unauthorized migrants here — I’ve seen numbers around the 50,000 mark — I think if there’s deportations here, it’s not going to have a huge effect on the labor force. But in California, it might, and it could have a large effect. And where do unauthorized migrants work? In the construction industry, in agriculture and — flash red here — tourism.

What might happen is, if there’s large numbers of people deported in the broad region of the U.S. West, not just the coastal states, there’s going be labor shortages there, and that may suck workers out of Hawaiʻi into the Western labor markets, raising costs here. Now again, if your construction worker stays here, you might be paid a higher wage. If you’re someone working in agriculture who stays here, you’re going to be paid higher wages. But we’re going to have some problems. We could well have problems with reconstruction in Lahaina just because construction workers start to leave for the mainland.

Bond-Smith: The construction sector is kind of a bright spot in Hawaiʻi’s economy right now. Tourism is relatively flat, down because of Maui, but construction’s got all these federal contracts right now. There’s all these buildings going up in Kakaʻako, and with tariffs and with deportations, that could be pushing the costs of construction up that then creates headwinds on growth. The plans that are currently in place, they probably continue. It’s the plans that come after that are now on hold because of the uncertainty and price cost pressures. People don’t want to sign up to contractor plans for development when they don’t know what the costs are going to be in two, three years’ time.

And immigration compounds that. Of illegal immigration, even if they only deport a relatively small number, just the rhetoric around it prevents those people from being able to go to work or school, and all of that also adds to the supply of workers and adds to those cost pressures. The other thing is, they’re likely to tighten up, I think, on legal immigration, right? So there’s going to be reform for H-1B visas and various other forms of legal immigration, that then also creates labor market tightness and similarly generates more cost pressures, which likely needs to be inflationary and limit the ability for the economy to grow.

Steven, you’ve been writing about the extraordinary concentration in the tourism industry here. Can we diversify?

I think tourism is still going to be the mainstay. Tourism is not like the previous sort of commodities that Hawaiʻi specialized in in the past with plantation agriculture, or even if you go back further to sandalwood and whaling. Tourism, that’s a different kind of industry than a commodity, but it’s become something that’s not really growing, and we need other industries to emerge to generate growth in Hawaiʻi.

Otherwise, Hawaiʻi’s economy just kind of continues to stagnate at a lower rate of growth than the rest of the U.S. and tends to kind of fall behind.

I’ve been doing some analysis also to look what this really means. If you account for cost of living, Hawaiʻi actually looks a lot like West Virginia, which is remarkable. It’s very dependent on one industry, and that industry is declining. That’s what our industry looks like, and there’s nothing really emerging to replace it. Part of the problem is Hawaiʻi being really small means that it can only really get scale in a few industries, and any new industry that emerges really struggles, I think, to get sufficient scale to then develop productivity.

The answer is really going to come from relatively small, niche industries that have relative scale. So Hawaiʻi can have a relatively large share of some little niche, right? And this is what we see with things like Kona coffee or macadamia nuts. These are crops that aren’t grown readily across the U.S. but could be grown in Hawaiʻi. You could do something similar with kalo, with aquaculture, or with fisheries. They’ll never have the scale of tourism, but they’ll create some initial segment of diversity.

Sumner, as you have written, there is widespread agreement in Hawaiʻi that state government needs to spend more money on natural resource stewardship. A critical question is how best to pay for it. The discussion going on at the Legislature for the third year in a row now is this climate impact fee, mitigation fee, green fee, visitor impact fee. It is ultimately about taking care of our the most important thing here, our natural resources.

La Croix: I’ve been pushing this for 25 years now. It’s clear that the natural resources that we have here are the reason that people enjoy living here in Hawaiʻi, and it’s the reason why people come to visit us. And ultimately it will still be for successful new industries that are tied somewhat to Hawaiʻi natural endowments if we don’t take care of them. This is really foolish. Look at how much we’re spending on our Department of Land and Natural Resources. They just have so many places where they should be taking care of resources, but they don’t have the money.

Even a simple thing like maintenance of hiking trails on the island isn’t done well. It’s not a matter of there being an inefficient department or people who don’t care. One can always find inefficiencies in government. One can always find ways to improve things. But this is just a case where we’re just not spending the resources. We’re just not putting the effort in, and we see even more challenges coming in the future.

On the other hand, I’ve been really critical of some of the recent proposals. The proposal that was there last year — taxing visitors — I thought was just really badly conceived and could be easily evaded, and it just had lots of problems. So Jim Mak and I, an economist who specializes in tourism, we basically felt a small increase in the transient accommodations tax would be the way to go, rather than to rejigger a whole new tax system.

I think the emphasis on the tourism industry paying for any green tax or for increased funding in this area, it’s OK that tourists pay part of the tax, but we also benefit from it here. And I think it’s ended up with a polarized discussion, where you have the tourist industry basically being against much of this stuff when I just think it’s left us with an unbalanced discussion. This is one of these problems that we got to get a move on in spending the extra resources.

The final point that I want to bring up on this, about making the tourists pay for it, is that there’s a lot of animosity toward tourists, in a way, right? There’s such a negative opinion of tourists. Yeah, our economy is so dependent on them. But if there was a way that locals would benefit more from those tourists — if we were collecting more revenue from it, and it funded great schools, we had great parks, we had great public facilities that locals got to use, and we understood that that was paid for by tourist revenues, then I think people would feel a little bit more positively toward them.