County officials will seek bigger TAT share

Mayor Alan Arakawa, Maui County Council Chairwoman Gladys Baisa and former council Chairman Danny Mateo will put their powers of persuasion to the test Friday at the state Capitol.

Coming at a crucial juncture in the current lawmaking session that ends May 2, the county leaders will continue lobbying to convince lawmakers to remove a cap on the counties’ share of transient accommodations tax revenue.

This morning, House and Senate conferees will face off in conference committee on the state budget. What still has county leaders worried is whether lawmakers will balance the state’s budget with money that has traditionally gone to the counties, such as the transient accommodations tax, also known as the hotel room tax.

Arakawa called the lobbying push “the last chance to talk to legislators to make our case.”

Meanwhile, lawmakers will be hovering nearby, all concerned about pet projects for their districts.

“We’ve just passed bills back to the originating house and are still doing an assessment of differences between the respective drafts,” said West and South Maui Sen. Roz Baker via email Wednesday. She maintained that her own priority project was lined up to be included in the state budget.

“Kihei high school construction money is in both House and Senate drafts of the budget,” she said. “So I’m optimistic that the dollars we need to get this project into construction will be included in the final conference draft.”

The Maui County delegation will meet Friday with House Speaker Joe Souki, Senate President Donna Mercado Kim, Senate Ways and Means Chairman David Ige and House Finance Committee Chairwoman Sylvia Luke, Baisa said Wednesday.

“We need to make sure they understand our position, particularly on the TAT,” she said.

Maui County receives about $21 million annually from the room tax revenue, making it second only to property taxes as the largest source of general fund revenue. Losing that money would require cutting public services or increasing property tax rates, according to Budget Director Sandy Baz.

This year, the Legislature’s attempt to raid the counties’ share of the revenue took the form of Senate Bill 359. It would have repealed the distribution of room tax revenue to the counties, but it did not cross over to the state House, making it appear dead this year. However, it could be resurrected in another money measure.

Last week, the County Council passed a resolution calling on the Legislature to remove the current cap of $93 million as the four counties’ share of the room tax revenue, Baisa said.

The cap was supposed to be temporary, she said. And, now “tourism’s going through the roof. There’s a lot more money coming in. If we don’t get the cap off, we won’t get any more. Otherwise, it will go to the state treasury, and we’re not going to benefit.”

Arakawa said county leaders will call on lawmakers to live up their promises.

“They made a commitment that this TAT cap would only be temporary, and they need to stand by that commitment,” he said. “Visitors have a positive impact on our economy, but they also heavily impact our roads, utilities and emergency services such as police, fire and lifeguards. It is logical that visitor-generated revenue helps the county pay for those services, and it’s not right that the state wants to take it away to balance their budget.”

Mateo, now an executive assistant to the mayor, said the county provides funding for state programs.

“We support the dental and nursing programs at the University of Hawaii Maui College, as well as give money to many nonprofit organizations for their programs, operations and services for our people,” he said. “Our state legislators need to be reminded about how critical these TAT monies are to the county.”

Maui County’s share of the room tax revenue is an important piece in putting together the county’s annual budget, Baisa said. “We’ve got to make sure we don’t lose that money.”

Council Member Riki Hokama, vice chairman of the council’s Budget and Finance Committee, also has been helping the county’s lobbying effort at the Capitol, she added.

“We’ve got to keep an eye on them until it’s over,” she said. “We’ve got to keep being in their faces, let them know we’re paying attention.”

When council members are working on the county budget in Council Chambers in Wailuku, council staff members are keeping close tabs via Internet live-streaming on what’s happening at the Capitol in Honolulu, Baisa said.

“We’re doing our best because you know we have to bring home the bacon,” she said.

Baisa said she believes another measure, Senate Bill 1213, which would have taken half of the counties’ share of public utility franchise tax revenue, has died this session because of lobbying by the counties.

If half of the franchise tax revenue were diverted to the state Department of Transportation, as had been proposed, Maui County’s current $9 million in revenue for highway projects would have been reduced by about $5 million.

“It appears that will not be touched this year,” she said. “We were able to pull it out of the fire.”

* Brian Perry can be reached at