Tourism Authority will
review all contracts to
make up $5 million cut

Gov. Ben Cayetano
used a line-item veto
to reduce the budget

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By Tim Ruel
truel@starbulletin.com

Faced with an 8 percent cut in its annual budget, the Hawaii Tourism Authority will review all contracts to see where to chop first, officials said.

Gov. Ben Cayetano announced Monday that he would use a line-item veto to slash $5 million from the authority's $61 million budget for fiscal 2003.

Since all the authority's contracts are contingent on funding, the authority can select which contracts will lose the money, said Roy Tokujo, the authority's chairman. Tokujo spoke at the end of the board's monthly meeting yesterday, his last with the authority, since his term is expiring along with those of six other members.

To thank the outgoing board members, Cayetano wrote them a warm letter of appreciation, which was distributed at yesterday's meeting. Shortly after, the board met in an hour-long executive session to discuss Cayetano's budget cut in private.

Later, the board issued a brief statement saying it was disappointed with the move.

"We believe that there will be repercussions to the industry and the community at large by the reduction of funding for tourism related programs," Tokujo said in the statement.

The authority's staff will recommend potential spending cuts to the new board, said Lloyd Unebasami, chief administrative officer of the authority. The new board members begin their terms next month.

All contracts with private vendors will be reviewed, including the Hawaii Visitors & Convention Bureau's $38 million-a-year contract to market the islands as a tourism destination, Tokujo said. "Everything's open," he said.

In his veto message, Cayetano noted that the authority's remaining $56 million is still more than double what the state spent on tourism marketing four years ago.

Before the authority was formed in late 1998, the state awarded the HVCB about $25 million a year to market Hawaii. At the time, the state was mired in economic doldrums and in 1997 Cayetano appointed the Economic Revitalization Task Force, a panel of local leaders, to turn things around.

The task force recommended doubling the state's tourism marketing budget to keep Hawaii competitive with other destinations, and a group of tourism leaders supported an increase in the hotel room tax for dedicated funding. Cayetano approved the creation of the new authority.

By the end of June 2000, the tourism authority's budget had hit $60 million. The next year, it climbed to $61 million.

"It was working," Tokujo said, pointing to the record 6.98 million visitors who came to the islands in 2000. Now that tourism been stung by the mainland recession and Sept. 11, it makes no sense to cut the budget, he said.

Following Sept. 11, the Legislature approved spending an additional $10 million, taken from the state's tourism special fund, on visitor marketing.