Bill to increase counties’ share of hotel tax gets hearing

The Maui News

The House Finance Committee will hear a bill Thursday to increase Maui County’s share of transient accommodations tax revenue from $23.5 million to $38.3 million, according to an announcement from Central Maui Rep. Justin Woodson.

Senate Bill 648 is scheduled for a hearing at 2 p.m. in House conference Room 308.

Woodson said the measure includes a House amendment to increase the Neighbor Islands’ share of what’s also known as the hotel room tax.

“We have been in discussions with the Finance chair,” he said. “We greatly appreciate the new proposal that would increase Maui’s share of the TAT.

“We look forward to working with our members to bring more money back to Maui County,” he said.

Currently, Maui County receives 22.8 percent of the $103 million of the hotel room tax allocated to the counties.

The House version of the Senate bill would add another $14.82 million to Maui County’s share.

Hawaii County would get another $12 million, and Kauai County would receive another $9.4 million.

The Senate bill is a departure from House Bill 1665, which began as a proposal from the Hawaii Council of Mayors to restore the counties’ allocation of hotel room tax to 45 percent of the total income.

A revised bill that came through House Finance Chairwoman Sylvia Luke’s committee would require the counties to request reimbursements for various expenses and justify each request in order to receive any share of transient accommodations tax revenue.

While the revised measure was in Luke’s committee, the counties’ mayors came out strongly against it.

“While it is not clear what expenses would qualify for reimbursement (for example, what percentage of overhead, salaries, maintenance products used at a park that serves locals and visitors, etc.) nor how much revenue the counties would ultimately receive, it is clear that the process would be a bureaucratic nightmare,” said Hawaii County Mayor Harry Kim in written testimony. “This bill would cripple the partnership that has been created over the years in an imperfect but meaningful attempt to best serve the 1.4 million people of Hawaii.”

Maui County Council Chairman Mike White also opposes the bill, saying it would remove the counties’ annual share of the hotel room tax and put in its place a reimbursement process for specific expenditures such as mass transportation, ocean safety programs and cesspool conversions.

“The bill does not consider the many other expenditures related to visitors that all four counties currently cover through the current $103 million TAT allocation,” he wrote in a “Chair’s 3 Minutes” column. “This is in stark contrast to the state, which from fiscal years 2007 to 2017 saw its annual share increase by more than $291 million. However, it has placed no restrictions on how it uses the additional funds.”

House Bill 1665 crossed over to the Senate on March 1. It has been referred to the Ways and Means Committee; the Public Safety, Intergovernmental and Military Affairs Committee; and the Economic Development, Tourism and Technology Committee.

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