Extra tourism
money will go
to pay off debt
An extra $8 million the state Legislature appropriated to the Hawaii Tourism Authority would go toward relieving the agency's debt problems, and would not raise the amount spent to promote Hawaii to travelers.
The authority's new budget for fiscal 2004, which starts in July, uses the $8 million to help relieve the authority's annual liability to the Hawaii Visitors & Convention Bureau, its tourism marketing contractor.
The bureau's fiscal year starts in January, while the authority's fiscal year begins in July. Ever since the authority began contracting with the bureau in 1999, the authority has always been at least six months late in paying the bureau in full. The situation has posed several problems, including the loss of state funds to interest payments.
The authority plans to use all of the $8 million to begin easing the deficit, which would take until 2008 to complete.
At that point, the authority would have the funds to pay the state's tourism marketing contractor in full, $34.1 million, at the beginning of the year. The $8 million comes on top of the authority's $61 million annual budget.
The bureau's current contract expires after December. Next year's contract is in the midst of a competitive bidding process.
The Legislature allowed the use of the $8 million to wipe out the debt, though earlier this year the House Committee on War Preparedness had talked about using extra funds to recover from the war with Iraq.
However, Hawaii's overall April visitor arrivals were ahead of last year's, thanks to a surge in U.S. mainland visitors.
The legislation requires the approval of Gov. Linda Lingle. Lingle has not yet made a decision on the bill, spokesman Russell Pang said. The authority's 2004 budget also requires approval by the full board of the authority.