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106 ICamehameLa Avenue It IS Ha~Na11 Island Hilo, Hawaii 96720 Phone: (808) 935-7178 ~1~ ~ Fax: (808) 961-4435 $mail: exec@htec.biz x ~ Chamber of Cornrneree w~~•hi~ehi~ ~AMflEfl OR ~MMERCg April 3, 2007 County Council Chairman and Council Members Hawaii County Council Hilo, Hawaii 96720 RE: Testimony on Bill Number 156 Dear Chairman Hoffman and fellow Council Members, My name is Robert Williams and I am the President-elect of the Hawaii Island Chamber of Commerce. I have come here representing our approximately 650 members. Today you aze discussing a proposal to levy a tax on new or expanding businesses that employ, or will employ over 100 Big Island residents. While the goal of providing affordable housing is admirable, the question remains will this Bill increase affordable housing or will it reduce job opportunities for our Big Island residents? Do you remember ten to fifteen years ago when the County of Hawaii was in an economic downturn? The talk of the day was "brain drain". Our best youth were being recruited to leave Hawaii for opportunities on the Mainland. Unemployment was high and the County was struggling to provide services. With agriculture in the decline from the demise of sugaz, the idea of expanding our economy beyond tourism, real estate development and construction was a government priority. Then, just when the economy was showing a little life in 2001, 9/11 happened, and there was real fear that our economy was a sinking ship. As providence had it, those were the dark days before the boom of 2003 to 2006. With a strong tourism, real estate, and construction industry, unemployment became a distant memory and government coffers have since been overflowing. One of the outcomes of the boom has been the escalating cost of housing. Some residents have been priced out of the market in certain areas of the Big Island. The good news regazding the housing problem is it is reversing do to normal business cycles. The availability of housing is increasing every day as homes are no longer selling quickly after being listed. Price reductions are now the norm on the MLS daily hot sheet. Thus, through a natural correction, the affordable housing problem is being improved upon. The question remains however, how do we reduce the wild swings of boom and bust that have characterized our economy over the last 40 years? The answer is to diversify our economic base. Tourism, real estate, and construction are all industries known for their extreme fluctuations. Hawaii needs to encourage industries that will expand our Comm. ivo. ~D ~ Ref. To;~ .t11~ Ref. Uate APR 0 4 2007 Affiliated with the Chember of Commerce of the United States