Mayors fight for hotel tax


POSTED: Thursday, February 18, 2010

Neighbor Island mayors and other county executives went before state lawmakers yesterday to again fight to keep their shares of the hotel room tax revenues.

“;Here we are again,”; said Maui Mayor Charmaine Tavares as she testified to the House Finance Committee on House Bill 2598, which would divert the collections of the hotel room tax from the counties to the state for three years.

House Finance Chairman Marcus Oshiro deferred action on the bill yesterday, but said he expects to decide next week whether to advance the proposal.

At stake is who—the state or the counties—will get the estimated $100 million in Transient Accommodations Tax money expected in the coming fiscal year.

“;If we lost the TAT and the $100 million on the state side, it means we either have to find other revenue options or make more cuts to the budget,”; said Oshiro (D, Wahiawa-Poamoho).





        A look at how much in Transient Accommodations Tax money that each of the state's counties expects to receive for the fiscal year that begins July 1. The total is about $100 million:

City and County of Honolulu: $44.5 million


Maui County: $22.7 million


Hawaii County: $18.5 million


Kauai County: $14.4 million


Source: State Department of Budget and Finance




But as the state looks to close a $1.23 billion budget deficit, the scoop of the TAT money appears more likely.

Neighbor island officials lobbied hard against the bill, saying the loss of TAT money would leave no option but to raise property taxes on their residents.

But the counties all face sizable deficits in their budgets regardless of whether the TAT money is taken, according to testimony. Under questioning from committee members, county officials danced around the issue of whether tax hikes were inevitable even with the TAT money in place, although some acknowledged that fee increases for some city services were more than likely.

Kirk Caldwell, Honolulu managing director, said the city expects to try to raise property tax rates on non-occupant owners.

Caldwell also urged lawmakers to keep the TAT money in place because the funds go to county services such as police, fire, lifeguards, park maintenance and others that all support the No. 1 industry: tourism.

He warned that taking the funds could mean fewer city services, noting that furloughs for county workers were likely next fiscal year.

“;Do we continue to have a police presence in Kalihi, or in Waikiki? Do we continue to put lifeguards on the North Shore—where our local surfers are—or do we put them where our visitors are in Waikiki?”; he said. “;We will have to make those difficult decisions and there will be consequences to those decisions.”;