State Legislative Session May Shift Local Business Regulations and Funding

EXECUTIVE BRIEF

Hawaii's county mayors, including Mayor Richard Bissen, will present before state legislative finance committees on January 25, 2026. This annual appearance signals potential shifts in statewide fiscal priorities, local funding allocations, and regulatory frameworks impacting businesses across the islands. Owners should monitor these discussions and subsequent legislative actions for potential business implications.

• Small Business Operators: Potential changes in permit fees, local taxes, or funding for business support programs.
• Real Estate Owners: Discussions around zoning, land use, or development incentives could arise.
• Investors: Emerging policy trends may signal new investment opportunities or risks.
• Tourism Operators: Budgetary decisions could affect marketing funds or infrastructure supporting tourism.
• Entrepreneurs & Startups: Policy shifts might influence access to state grants, incubators, or regulatory environments.
• Agriculture & Food Producers: Land use, water rights, or agricultural support programs could be debated.
• Healthcare Providers: Discussions on healthcare funding or services could impact the sector.

Action: Monitor legislative committee websites and public testimony for policy proposals emerging from these meetings.

The Change

On January 25, 2026, Hawaii's four county mayors are scheduled to present before the Senate Ways and Means and House Finance committees at the State Capitol. This annual event is a key opportunity for mayors to advocate for county needs and priorities, often including requests for state funding, proposed legislative changes, and policy alignment. While the specific agenda for each mayor's presentation is not detailed in advance, these appearances traditionally cover a range of issues relevant to county governance, which inherently intersect with business operations, economic development, and public services.

Historically, these presentations have touched upon topics such as infrastructure development, housing initiatives, tourism promotion, public safety funding, and environmental regulations. The state legislature's finance committees hold significant power over budget allocations and the passage of statewide legislation. Therefore, any consensus or diverging viewpoints articulated by the mayors could foreshadow future policy directions and fiscal decisions that will affect businesses operating within the state.

Who's Affected

This legislative engagement primarily affects stakeholders who rely on or are influenced by state and county policies related to funding, regulation, and economic development.

• Small Business Operators: May face impacts from proposed changes in state-level business support grants, tax incentives, or regulatory enforcement priorities stemming from discussions on county-specific needs. Permit fee structures, especially those impacting new business establishments or renovations, are also a potential area of concern.
• Real Estate Owners: Discussions on statewide housing policy, land use planning, or infrastructure development funding could directly influence property values, development opportunities, and zoning regulations. Commercial property owners may also see impacts if state funding mechanisms for local projects change.
• Investors: Policymakers' focus on specific economic sectors or development initiatives could signal emerging investment trends. Conversely, discussions around increased regulation or taxation in certain sectors could represent risk factors for existing portfolios.
• Tourism Operators: State funding for tourism promotion and marketing is often a subject of legislative budgets. Decisions made here can influence visitor arrival numbers and the overall competitiveness of Hawaii's tourism industry. Moreover, broader economic policies can indirectly affect visitor spending.
• Entrepreneurs & Startups: Access to state-backed innovation funds, grants, or incubators could be leveraged or altered based on legislative appropriations. Regulatory streamlining or new compliance requirements articulated during these sessions could also impact startup scalability.
• Agriculture & Food Producers: Policy discussions could involve agricultural land preservation, water resource management, or state support for local food systems. Shifts in these areas can directly affect operating costs and viability.
• Healthcare Providers: State budget allocations for health services, medical infrastructure projects, or public health initiatives can have downstream effects on private providers, licensing, and insurance regulations.

Second-Order Effects

Discussions and subsequent decisions at this level can initiate a chain reaction impacting Hawaii's unique economic ecosystem. For example, a push for increased state funding for renewable energy infrastructure projects, advocated by the mayors, could lead to higher initial construction costs for businesses requiring new power hookups. This, in turn, might slightly delay new business openings or expansion plans. Over the medium-term, however, successful implementation could lower long-term operating costs for businesses relying on energy, potentially improving margins and making Hawaii more competitive for tourism or new ventures, thus influencing job growth and wages in the service sector.

Another potential ripple effect: If the mayors highlight significant infrastructure needs, state legislative action could prioritize certain capital improvement projects. Increased construction activity in specific areas for these projects could lead to localized traffic congestion and temporary disruptions for small businesses in those vicinities. Simultaneously, demand for construction labor could drive up wages in that sector, potentially creating broader wage pressure across other industries as workers seek higher compensation.

What to Do

Given the 'Watch' action level, proactive monitoring is key. Businesses should:

1. Monitor Legislative Output: Regularly check the websites of the Senate Ways and Means Committee and the House Finance Committee for agendas, meeting minutes, and approved proposals following the January 25th presentations. Pay attention to any emerging bills or budget line items that align with the priorities discussed by the mayors.
2. Review Public Testimony Opportunities: State legislative sessions offer periods for public comment. If specific proposals arise that could significantly impact your business sector, consider submitting written testimony or attending relevant hearings.
3. Scenario Planning: For businesses with significant expansion plans or capital investments on the horizon, consider how potential shifts in state funding, regulatory requirements, or tax structures discussed in these sessions might affect your long-term projections. Adjust financial models and business plans accordingly.

Action Details: Watch for the release of legislative session agendas and subsequent committee reports that detail proposed bills or budget amendments stemming from these mayoral presentations. If specific policy changes emerge that affect your industry (e.g., new permitting fees, changes to tourism tax credits, or land use regulations), consult with legal counsel or industry associations to understand compliance requirements and potential impacts before making critical business decisions. No immediate action is required for most, but awareness is crucial for proactive adjustment over the next 6-12 months.