Mayors praise decision on hotel tax


POSTED: Thursday, February 25, 2010

The state's four county mayors applauded the move by House lawmakers to leave in place most of the money they receive from the hotel room tax.

“;We're very pleased that the House Finance Committee heard our appeals and voted to preserve the counties' share of the hotel room tax revenues,”; the Hawaii Council of Mayors said in a joint news release yesterday. “;As we've been pointing out, the counties provide the infrastructure and services that directly support the visitor industry.”;

Meeting late into the night Tuesday, the Finance Committee approved a proposal to cap the amount of Transient Accommodations Tax money going to the counties at the current level of $94.3 million a year.

The state would get any revenue above that amount and the cap would be in place for the next five fiscal years, starting July 1.

As originally proposed by Gov. Linda Lingle, House Bill 2598 proposed to scoop all of the TAT money from counties. The TAT is expected to generate about $100 million for the upcoming fiscal year.

Mayors and other county executives had lobbied hard against the TAT scoop, saying the loss of those funds would lead to larger budget deficits on their ends and force them to consider increases in property taxes.

“;We're already experiencing significant reductions in real property tax revenues and any cut in the money we now receive from the room tax would have a very serious impact on our finances and operations,”; the mayors said.

The Senate might still decide to scoop the TAT money. Any changes in the bill would have to be worked out in conference committee.

A similar measure advanced last year but ultimately stalled, leaving the TAT money in place.