Hawai'i should close public schools with low enrollment to free up money for improving other schools and end the general excise tax on food and nonprescription medicine.

Those are two of the dozens of ideas floated yesterday by the state Economic Momentum Commission. The commission — set up by Gov. Linda Lingle and headed by Don Horner, president and chief executive of First Hawaiian Bank — will eventually select a dozen proposals for business leaders and lawmakers to consider to keep the state's economy growing.

The closing of some schools "probably makes sense" economically, but "educationally, it's iffy," said Wade Araki, principal of Benjamin Parker Elementary School in Kane'ohe. "It depends on what kind of strain you're going to put on the community where you're going to close a school. Research shows that small schools are more effective and big schools are harder to run."

The commission also proposed refunding "a major portion" of the state's $486 million surplus to taxpayers through a general excise tax holiday for food and nonprescription medicine purchases.

Horner estimated that using around $150 million of the surplus for the tax break would lower the cost of living for residents, while leaving some of the surplus to invest or spend as state government sees fit. Low-income residents would benefit most from this move, he said.

"Our draft recommendations cover a broad range of issues, reflecting the commission's unanimous sentiment that economic growth should not come at the expense of the quality of life of Hawai'i's residents," Horner said.

Closing some schools and consolidating them with other schools would reduce operating expenses, eliminate some of the maintenance backlog and generate revenue from selling or leasing valuable real estate that could be reinvested in remaining schools.

The commission said 25 percent of schools are crowded beyond capacity, but 50 percent are overbuilt for current enrollment as overall student population has declined over the last 25 years and people have migrated out of the urban core to suburbs.

"This has occurred because we have lacked the political will and leadership to close and consolidate these older schools and transfer education resources to localities where our population is expanding," the commission said. "The result is a $468 million backlog of repair and maintenance."

The commission did not identify schools that could be closed, but suggests that a committee be formed to examine supply and demand for school facilities, and recommend schools for closure and consolidation. Such a committee, modeled on the military's Base Realignment and Closure Commission, would also examine how to best reuse or dispose of surplus school property.

Board of Education member Karen Knudsen sees merit in the proposal to establish a committee to evaluate consolidating smaller underused schools.

"It sounds like something we could look at, particularly as demographics are shifting from one part of the island to another, and because we do have some schools underutilized," said Knudsen. "We don't want to close schools serving a viable population, and we do know a smaller learning environment is much better for students. We do need to balance out the best interests of students and being fiscally responsible."

Parent Chris Eng, president of the Parent Teacher Student Association at Moanalua Middle School, is pragmatic.

"It's an economic and political decision that has to be made," he says of potential closures. "This is the way the world is going. Now we realize we have to make sacrifices for the larger good. It's something we really don't have a choice about at this point."

House Education Committee chairman Rep. Roy Takumi has noted that in urban areas like Waikiki, where there are several elementary schools within a few miles of each other, school closure should be considered especially as smaller schools with smaller populations lose money under the weighted student formula.

"Maybe that's something the Legislature has to deal with," he has said. "Should we really consider merging these schools? In the urban setting you have schools relatively close but we've never seriously taken a look at that."

Horner said that not all commission members agree with every recommendation, but that he was pleased at the overall level of consensus. "Members of the commission put in hundreds of hours working in a true spirit of bipartisan cooperation," he said.

The commission was formed in June by Lingle, and includes representatives from small and large businesses, labor unions, government, the military and environmental, cultural, educational and non-profit organizations.

Whether plan proponents will be successful pushing recommendations through the Legislature, the county councils and other agencies remains to be seen.

Yesterday's list of about 35 draft recommendations modified an initial list presented last month, and also included forming a public-private partnership to meet future needs of Hawai'i commercial harbors, leasing small-boat harbors to county governments or private concessionaires, and developing affordable workforce housing at the former Barbers Point Naval Air Station at Kalaeloa.

Horner said the Kalaeloa affordable housing plan would involve the state agency overseeing reuse of the former Navy base, the Hawai'i Community Development Authority, buying 500 acres of Kalaeloa land the Navy has offered for sale.

Homes could be developed under a similar public-private partnership the agency is using to redevelop state land in Kaka'ako where it selected Alexander & Baldwin Inc. to build condominiums that would help pay for public facilities like a hula amphitheater and park space as well as commercial restaurants and shops. But the commission recommends that the requirement to sell 20 percent of homes at below-market prices in Kaka'ako be higher in Kalaeloa.

Previously shared suggestions still on the commission list include replacing the airport's Wiki Wiki Shuttle with an air-conditioned people-mover, creating incentives to use public transportation, maintaining watersheds, reducing Hawai'i's dependence on oil and keeping invasive plant species out of the state.

The commission expects to begin soliciting public views to help it refine recommendations, and possibly come up with new ones, throughout November. A commission vote is expected in December to pick about a dozen final suggestions that would be proposed for implementation.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.