Lackluster 90s One aspect of the state rebound that a lot of people don t realize, especially on Oahu, is that most of the state s growth in recent years has been happening on the Neighbor Islands. As the chart below shows, recovery started on the Neighbor Islands several years ago, and Oahu has only recently started to catch up. There are several reasons for this. The Neighbor Isles are smaller economies growing from a smaller base, so that the same number of added jobs results in a larger percentage increase. But the Neighbor Isles also have more room to grow.
More jobs mean the unemployment rate is dropping.
Another good indicator The 1982 recession, good times in the later 1980s, and the erratic 1990s are again shown in the tax revenue chart. It s easy to see here how state government could expand so much in the 1980s, and why it was under such pressure to contract in the 1990s. Now, despite income tax reductions several years ago, we are seeing very healthy growth in tax revenues. Most of that growth came from the General Excise Tax category, which makes up almost half of the total General Fund and is tied closely to the underlying economy. This dramatic rise in GET tax revenues reflects strength in the visitor industry, construction, real estate, and other categories.