TAT hike still in limbo: Kenoi crafting budget without increase included
Faced with a May 5 deadline to present his final budget proposal to the Hawaii County Council, Mayor Billy Kenoi said Thursday he’s crafting a spending plan that doesn’t take any increases in the county’s share of the hotel tax into account.
The state Legislature is taking negotiations on the tax issue right to the wire, with a 10 a.m. conference committee meeting planned today that might or might not result in an agreement. The legislative conference committees hope to have a budget resolved by the end of the day, with next week’s end of the 60-day legislative session looming.
“We’re working within our budget without factoring in any increases,” Kenoi said. “We’re working with what we know.”
Still, Kenoi said, he’s remaining “hopeful and optimistic” the Legislature will see fit to return some of the county’s share of the tax it capped in 2010.
Kenoi was in Honolulu on Wednesday meeting with state legislators and fellow mayors, trying to work out an agreement that sends more of the money to the counties. He might have to return today, he said.
The transient accommodations tax, known as TAT, is collected as a surcharge on hotels and lodging rentals of less than 180 days. It comes primarily from island visitors.
Removing the cap would make a big difference in the county’s $412.6 million budget.
In the 2012-13 fiscal year, Hawaii County generated $40.1 million in TAT and received $17.3 million back. Without the cap, the county would have received $30.7 million.
House Bill 1671, championed by House Speaker Joseph Souki, a Maui Democrat, would have removed the cap, allowing the four counties to share 44.8 percent of the revenues collected, with Honolulu receiving 44.1 percent, Maui receiving 22.8 percent, Hawaii County receiving 18.6 percent and Kauai receiving 14.5 percent.
But the bill faced opposition in the Senate, which is concerned about recent downgrades in the state’s revenue forecast. The state might need that money in its own budget, the Senate said.
A compromise was offered Wednesday by House negotiators that would phase in a lifting of the cap, giving the counties 33 percent starting July 1, 37 percent in 2015, 41 percent in 2016 and 44.8 percent in 2017. Sen. Gilbert Kahele, D-Hilo, Puna, Ka‘u, said he would consider that compromise, according to Honolulu Civil Beat. Kahele did not return a telephone call by press time Thursday.
The budget currently under consideration by County Council is an $18.3 million increase compared with last year. But $18.4 million is slated for employee wages. Kenoi said no specific programs or services have been cut to make up the difference. Still, having an additional $13 million or so in TAT would help keep those programs intact.
Kenoi said belt-tightening in the county’s recent lean years put the government in a solid fiscal position. Rising property values, coupled with tax hikes in the 10 percent range last year, already added about $13 million to property tax revenues, a 5.9 percent increase.
“We don’t believe our programs and services will suffer,” Kenoi said. “But certainly, if there was an increase, we could improve programs and services.”
Email Nancy Cook Lauer at firstname.lastname@example.org.
Rules for posting comments
Comments posted below are from readers. In no way do they represent the view of Oahu Publishing Inc. or this newspaper. This is a public forum.
Comments may be monitored for inappropriate content but the newspaper is under no obligation to do so. Comment posters are solely responsible under the Communications Decency Act for comments posted on this Web site. Oahu Publishing Inc. is not liable for messages from third parties.
IP and email addresses of persons who post are not treated as confidential records and will be disclosed in response to valid legal process.
Do not post:
- Potentially libelous statements or damaging innuendo.
- Obscene, explicit, or racist language.
- Copyrighted materials of any sort without the express permission of the copyright holder.
- Personal attacks, insults or threats.
- The use of another person's real name to disguise your identity.
- Comments unrelated to the story.
If you believe that a commenter has not followed these guidelines, please click the FLAG icon below the comment.