Rental car tax law needs amending

THE ISSUE A new levy will charge rental car customers an additional $1 a day.

TRAVELERS having to pay luggage fees and fuel surcharges when flying to Hawaii might not see a new $1-a-day rental car tax as a vacation deal-breaker. Still, the extra toll doesn't help a visitor industry facing drops in arrivals or the tour companies that already booked customers and will have to absorb the tax come September.

Billed as a way to finance consolidated rental car facilities at Hawaii airports, the tax is expected to collect about $10 million a year and reach the goal of $25 million in less than three years. However, $25 million falls far short of what such facilities cost at other airports. Testimony during legislative hearings on the measure pointed out that Seattle and Miami spent more than $400 million, more than 16 times that amount, leading to questions about what lawmakers hoped to achieve and if a higher rate will follow.

That would not be improbable since the measure instituting the new tax also extended for three more years a $3 daily rental motor vehicle surcharge that was to have decreased to $2 this year. The measure also is vague about the facilities projects themselves, which airports would get them and when.

In addition, the legislation contains provisions that allows some of the tax money to be transferred to the state's general fund, which should raise concerns about yet another special fund that can be tapped by lawmakers for other purposes.

Integrated facilities with shuttles and other services would certainly be a boon for visitors and rental car companies, but legislators need to tighten up the law to direct funds to the projects at which the tax is aimed.