Hotel association issues public call to oppose tax rates
MHLA worries 17% hike will hurt jobs, hotels, economy
Trending
The Maui Hotel & Lodging Association on Friday afternoon urged its members and the public to contact Maui County Council members and Mayor Michael Victorino to express opposition to the council's recently approved property tax rates, which increase the levy on hotels and resorts by 17 percent.
"MHLA is concerned about the tax increase's negative effect on the visitor industry, its employees, the state's economy and worldwide industry competitiveness," a news release said, which reiterated testimony given during the council's budget review process.
More than 75 percent of Maui County residents are either directly employed by, or work for ancillary businesses of, the visitor industry, MHLA noted.
The council's recently passed $823.5 million budget for next fiscal year, which begins July 1, was transmitted to Victorino on Thursday. He now has until June 17 to act, which could involve signing the budget, allowing it to become law without his signature, vetoing the measure or conducting line-item vetoes. The council will have 10 calendar days to override to any vetoes.
Accompanying the budget are the fiscal 2020 property tax rates. Hotels and resorts saw the highest increase among the categories from $9.37 to $11 per $1,000 of assessed valuation. Victorino's proposal included a 3 percent hike to $9.60.
Council leaders said they placed an increased burden on hotels and resorts because their guests impact public infrastructure and the environment and use emergency services.
The organization, which is made up of 195 properties and allied business members in the county that employ 25,000 residents, said resorts and hotels admit to the possibility of cutting staff due to the increased tax rates. This would negatively impact the availability of guest services, MHLA said.
Hotels and resorts are expecting their tax bills to rise 50 to 60 percent.
Maui's major hotels donate an average of $80,000 and 625 labor hours per property each year to community and charitable organizations, MHLA said. Resorts and hotels are expecting those numbers to decrease due to the tax hike, according to the news release.
The organization was critical of the council's "lack of planning by forecasting revenues before working on expenses." The proposed budget includes millions of surplus dollars that likely will not be spent, MHLA said.