County to receive more TAT revenues

Minutes before the 6 p.m. deadline to file fiscal bills Friday, state lawmakers raised by $20 million over two years the amount of funds counties will share from the transient accommodations, or hotel room, tax, but the $113 million was much less than the counties had sought.

The amended bill that made it out of the state House-Senate conference committee Friday night was not the one Mayor Alan Arakawa and the Maui County Council had lobbied for. Maui County officials, along with their counterparts from the state’s other counties, had sought to restore the 44.8 percent of TAT revenues they had received prior to 2010. The state Legislature capped the counties’ share of TAT revenues at $93 million that year as the state grappled with difficult economic times.

Maui County receives 22.8 percent of the counties’ share of the TAT. The City and County of Honolulu gets 44.1 percent; Hawaii County, 18.6 percent; and Kauai County, 14.5 percent.

The amended version of the bill does not remove the cap, but it does raise it by $10 million each of the next two years, lawmakers said Friday. That means in the next fiscal year, which begins July 1, the cap will be raised to $103 million and in the following fiscal year to $113 million.

“It did pass, but unfortunately not the way we originally wanted it,” West Maui Rep. Angus McKelvey said in a phone interview Friday evening. “We were concerned it would die because of the lack of time. Speaker (Joe) Souki forced the bill onto the agenda and got a vote before the close in really, the last few minutes.”

“It’s a compromise, but at least we’ll get something back for the counties,” he said.

State Finance Director Kalbert Young has said that if the counties once again received their 44.8 percent cut of the TAT, the state general fund would lose $81 million in the upcoming fiscal year and $98 million the next.

Arakawa told council members in his budget presentation last month that if the cap was lifted, the county could see an additional $17 million in revenue, which would help alleviate the need for his proposed across-the-board property tax hikes.

“If the state removes the cap, there should be no property tax increase,” Arakawa said in March. His budget proposal for the upcoming fiscal year includes an approximately 6.5 percent across-the-board increase for all real property classifications.

Council Member Mike White said Friday night that he was “disappointed” that the bill was not passed in its original form.

“It’s very disappointing because the state, over the last two years, has collected approximately $250 million more than they would have had the changes not been made to the calculations,” White said, adding that the cap was implemented as a temporary measure to help the state with its budget shortfall.

“The impact directly to Maui is that we’ve received $28 million less than we would have over the last two years,” White said.

He said that adding an extra $10 million to the cap would only benefit Maui by about $2.2 million next year, “less than a tenth of what we’ve lost in the last two years.”

“It is the counties that provide water and sewer service; police, fire and ocean safety protection; development and upkeep of most roads; and park development and maintenance – all of which are used to provide visitors with a quality experience,” White wrote in a Maui News Viewpoint last month. “The clear majority of visitor needs are filled by the counties, not the state.”

White said Friday that he did not know how the bill would affect the council’s ongoing budget deliberations, if at all.

At the state Capitol, it was a mad dash to the finish, as House and Senate leaders scrambled to pass bills before the 6 p.m. deadline Friday.

“We had to make some tough cuts, so, in the end, not everybody’s happy but that’s how it always is,” Souki said via phone an hour after the deadline passed.

The Maui Democrat said that one of the biggest issues that arose this session was raising the minimum wage, for which lawmakers agreed to increase from $7.25 to $10.10 per hour over four years.

Bills that made it out of conference committee by Friday will appear before the Legislature for final reading either Tuesday or Thursday, the last day of the session.

A bill that didn’t make it out of conference committee would have allowed state public hospitals, including Maui Memorial Medical Center, to enter into a public-private partnership. A similar bill proposed last session also died in conference committee.

“We’ll keep working on it,” West and South Maui Sen. Roz Baker said. “Sometimes, we let trying to do things perfectly right get in the way of doing something that’s serviceable. I kind of think that’s what happened with this one.”

Baker, who chairs the Senate’s Commerce and Consumer Protection Committee and is vice chairwoman of the Health Committee, said that the two chambers just couldn’t agree on the final draft of the bill, a common occurrence especially in the final “hectic” hours before the deadline.

Baker said that next session she hopes to start focusing in on some of the problem areas earlier “so we don’t end up at the end with people not feeling comfortable as time runs out.”

“I don’t think the issue with health care at HHSC (Hawaii Health Systems Corp.) and resources, or lack thereof, is going away,” Baker said.

HHSC manages and operates Neighbor Island public hospitals, including Maui Memorial, Kula Hospital and Clinic, and Lanai Community Hospital. It also manages and operates three facilities on Oahu.

Overall, Baker, McKelvey and Souki said they were “happy” with the bills that did make it through this session, and optimistic going into the final week of the legislative session.

“There are some disappointments along the way, but I think when the dust settles and we can assess all of the things that we did pass, we got some really good things for Maui and the state,” Baker said.

She said that Maui lawmakers were able to secure funds for the pier at Maalaea, the Lahaina bypass and two positions for the boarding program at Lahainaluna High School.

Several Central Maui projects were included in the $12 billion state budget lawmakers advanced Friday.

Lawmakers appropriated $32.5 million for design and construction of a new parking garage at Maui Memorial. They also approved $10 million for the construction of a new access road to Kahului Airport from Hana Highway, and an additional $6 million for other improvements at the airport.

Other Central Maui capital improvement projects include:

* $10 million for the widening of Puunene Avenue from Kamehameha Avenue to Kuihelani Highway that will increase the current two lanes to four lanes.

* $9.7 million for the design and construction of the Central Maui Regional Park and Sports Complex.

* $4 million to Hale Mahaolu for construction of senior affordable rental housing at Kulamalu Town Center subdivision.

* $2.7 million for a new Maui Food Innovation Center at the University of Hawaii Maui College.

* $2.5 million for planning and design for a new middle school in Central Maui.

* $2 million for construction of a new gymnasium at Maui Family YMCA.

* $750,000 for Maui High School for weight training/wrestling rooms and to renovate band/choir building.

* Eileen Chao can be reached at