In a state where local pride reigns, could there be any bigger local story in 2008 than the election of Hawai'i-born Punahou graduate Barack Obama to the nation's highest office?

Obama's historic campaign, and his three visits here in recent months, focused global attention on the Aloha State, whose voters had become accustomed to being marginalized in presidential elections.

His election as the country's 44th president was picked as the state's top story of 2008 by The Advertiser's editors and reporters.

The November election also saw Honolulu voters support a multibillion-dollar elevated commuter rail system — an ongoing saga that was tabbed as another of the year's biggest stories.

Other picks include more grim events, including mass layoffs, the failure of one of Hawai'i's iconic businesses, the shocking death of a Honolulu toddler, and upheaval in the University of Hawai'i's Warrior football program.

1. BARACK OBAMA

When Obama announced in 2007 that he would run for the presidency, many people in Hawai'i didn't realize that the senator from Illinois was born and raised here. But local residents were quick to claim "Barry," as he was known in the 1970s while attending Punahou School, as their own once he emerged as a front-runner in the campaign.

Obama-mania energized voters here and across the nation. In Hawai'i, a record 37,000 people participated in February's Democratic caucuses, many of them first-time voters. Local donors contributed more than $2.7 million to the candidate, believed to be a record for a presidential campaign.

When the votes were counted, Hawai'i had given Obama his largest victory margin of any state, with 72 percent of ballots cast for the Democrat vs. 27 percent for Republican Sen. John McCain.

The president-elect's predilection for rubber slippers and shave ice while vacationing here further enamored the Islands, as did his close relationship with his sister, Maya Soetoro-Ng, a history teacher at La Pietra Hawai'i School for Girls, and his beloved grandmother, retired Bank of Hawaii executive Madelyn Dunham. She died two days before the Nov. 4 election.

Many also found inspiration in Obama's story.

"He's a powerful reminder (to students) that they can achieve whatever they dream," said Darin Au, head of Punahou's Academy Music Department.

The school's marching band and JROTC marching unit were selected to participate in the Jan. 20 inauguration parade for the president-elect in Washington, D.C.

2. ALOHA AIRLINES

The state has seen its share of major business shutdowns in recent years, including the closing of sugar and pineapple plantations, but the March 31 demise of Aloha Airlines left an especially huge hole in Hawai'i's psyche.

Isle families, business travelers, tourists and others lamented the loss of the storied airline that played an integral role in the modern history of Hawai'i.

The shutdown also resulted in the overnight loss of 1,900 jobs in the largest mass layoff the state has ever seen.

The end came just 11 days after Aloha, the state's second-largest air carrier, filed for Chapter 11 bankruptcy protection after losing more than $120 million in the previous two years.

It was the second time in just over three years the company, which started in 1946 as Trans-Pacific Airlines, had sought bankruptcy protection.

When it shut down, Aloha was operating more than 700 interisland flights a week and more than 120 weekly flights to and from the West Coast.

Aloha executives blamed historically high fuel prices and unfair competition by Mesa Air Group, whose June 2006 launch of interisland carrier go! kicked off a fare war that cut interisland ticket prices to as low as $19 one way.

Tori Swoish, a flight attendant on Aloha's final flight, told passengers: "It's the end of an era, but I don't think anyone is going to forget us soon."

So far, she's right.

At a court hearing this month, U.S. Bankruptcy Judge Lloyd King bristled at the idea of the airline's former owner, Yucaipa Co., selling the Aloha brand and logo to Mesa, reminding both parties of "all of the people whose lives have been devastated by this."

3. VOTERS APPROVE RAIL

Honolulu voters approved a November ballot initiative authorizing the city to move ahead with a $5.3 billion rail line.

The vote, which favored rail by roughly 51 percent to 46 percent, brought the city closer than it has ever been to building a commuter rail system.

Three previous mass-transit plans over the past three decades failed for lack of political support.

Those voting for rail cited the need for transportation alternatives and traffic relief.

Rail gained momentum about three years ago when Mayor Mufi Hannemann proposed linking East Kapolei to Ala Moana.

Hannemann won the endorsement of the City Council and the state Legislature, which adopted a 0.5 percentage point increase in the general excise tax to pay for the plan.

Gov. Linda Lingle allowed the tax bill to become law without her signature in 2005, and for a while the rail plan took on an aura of inevitability.

Then came Stop Rail Now, a coalition of rail opponents who launched a petition drive in April to put rail on the ballot.

The organization collected 49,000 signatures by mid-July.

While Stop Rail Now eventually failed to get its ordinance on the ballot, it succeeded in forcing the City Council to place a separate version of the rail question before the electorate.

The ballot question asked voters if they wanted the city to move forward with a steel-wheel-on-steel-rail transit system.

The favorable result paved the way for the city to start construction possibly late next year with limited service between West Loch and Waipahu scheduled to start in 2013.

Service between East Kapolei and Pearl Highlands would begin a year later. Full service to Ala Moana would begin by the end of 2018.

4. UNEMPLOYMENT RISES

The list of companies announcing layoffs in 2008 reads like a "Who's Who" of Hawai'i's business community: Aloha Airlines, Servco Pacific, Hawaiian Telcom, Hawaiian Dredging, The Honolulu Advertiser, Moloka'i Ranch, Maui Land & Pineapple Co., and on and on.

By the end of November, the seasonally adjusted unemployment rate reached a nine-year high of 4.9 percent, with job losses reported in every private-sector industry, according to the state Department of Labor.

The jobless rate was 2 percentage points higher than a year earlier, and the number of unemployed was 32,650, compared with 18,850 in November 2007.

The biggest losses were in the visitor industry, with hotels continuing to release staff because of the drop in hotel occupancy and visitor arrivals.

State officials tried to temper the bad news by pointing out that Hawai'i's unemployment rate remains well below the national average of 6.7 percent, but experts predict local unemployment will climb through 2009.

The sense of desperation among job-seekers was evident at a four-day job fair held this month by Target Corp., when thousands turned out to apply for 1,200 jobs at new stores in Salt Lake and Kapolei.

Just before Christmas, Gov. Linda Lingle announced a plan for $1.86 billion in capital improvement projects to stimulate the economy and create more jobs.