The Advertiser's Aug. 13 article "It's expensive to do business here" focuses on the recently released 2005 Milken Institute Cost-of-Doing-Business Index, which ranks Hawai'i as the most expensive state in the nation to do business. The article notes that many other studies and surveys have concluded similarly.

Armen Bedroussian, the Milken Institute study's author, however, candidly admitted in a Chicago Tribune story on the same subject just a few days later: "Cheaper doesn't always mean better."

It is expensive to do business in Hawai'i for many of the same reasons that it is expensive to live here. A limit on developable land and our distance from the Mainland mean higher costs because we have to import our oil, most of our milk and even our pineapples. Government, though, is making a difference.

In the first 30 months of the Lingle-Aiona administration, the Department of Commerce and Consumer Affairs has reduced fees and assessments for businesses by more than $10 million. We started two years ago by cutting fees by 25 percent for people who set up new businesses or who file their annual corporate reports online. This past year, we increased those cuts by an additional 25 percent, and extended them to those who file by paper as well as those who file online. Where possible, a similar reduction was offered to professional licensees who renewed their licenses online.

We are not stopping there. We are in the process of adopting a rule that will permit us to reduce or temporarily eliminate DCCA's portion of the franchise fee that you pay as part of your monthly cable television bill. We hope to eliminate this charge for almost two years, and thereby save cable subscribers more than $1 million.

Now, not only is it less expensive but it is more convenient to do business here. We took a big step forward last October by launching a new service called Hawai'i Business Express. HBE enables people to start a new business online, rather than having to stand in line at government offices or to fill out paperwork by hand. HBE cuts through the red tape and enables people to register their business with DCCA, obtain their general excise tax license from the Department of Taxation, and obtain an unemployment insurance identification number from the Department of Labor and Industrial Relations in a single, online session. Since HBE went live in October, more than 1,850 businesses have been created using the system.

In addition, we will continue to encourage the Legislature to approve common sense and long-overdue measures to reduce business costs. These include reforming the state's costly and outdated workers compensation and lowering the unemployment insurance tax that businesses pay.

A healthy 21st-century economy is one where government works to advance its citizens' interests, rather than ensure its mere survival. According to Mike Fitzgerald, president of Enterprise Honolulu, "Right now, the Hawai'i economy is as good as it has ever been."

To ensure that the good times continue, the governor formed a 31-member Economic Momentum Commission. The commission is charged with developing an action plan that sustains the state's current economic momentum over the long term, avoiding the traditional peaks and valleys of economic cycles, and enhancing Hawai'i's natural and cultural resources. The bipartisan commission is working hard to develop its recommendations so it can announce them this fall.

The fact that it remains expensive to do business in Hawai'i is a black-and-white still photo of our economic condition. The fact that the economy is steaming, that businesses flourish in Hawai'i, and that people continue to move their families and their companies here provides the color and shows the direction in which we are moving.

A lot of work remains to be done, but there are a lot of committed people, many of whom work with us at DCCA, who are up to the challenge.

Mark E. Recktenwald is director of the state Department of Commerce & Consumer Affairs. He wrote this commentary for The Advertiser.