When it comes to raising revenues, the county administration and County Council have few options other than raising property taxes.
That’s why they’ve been carefully watching what the state Legislature does with the county’s second-largest funding source, the transient accommodations tax.
A delegation including Mayor Billy Kenoi, County Council Chairman Dru Kanuha and Hilo Councilman Dennis “Fresh” Onishi, who is executive vice president of the Hawaii State Association of Counties, met Thursday with legislative leaders to appeal for a greater share for the counties.
“It was a good meeting, but it wasn’t one positive meeting,” Onishi said afterward.
The delegation, which also included HSAC and Hawaii Council of Mayors members from other counties, doesn’t want the state to raise the tax, just give the counties more of it and the state less. They met with Senate President Ron Kouchi, House Speaker Joe Souki, Senate Ways and Means Committee Chairwoman Jill Tokuda and House Finance Committee Chairwoman Sylvia Luke.
Commonly known as the “hotel tax,” the TAT is a 9.25 percent tax levied on accommodations of less than 180 days rented to people who have a permanent home elsewhere. It currently accounts for $19.2 million in the county’s $462.7 million budget.
Other sources of revenue for Hawaii County are property taxes, at $265 million, fund balance carryover at $42.8 million, charges for services at $25 million, licenses and permits at $22.6 million, public utilities franchise tax at $11.1 million, public service company tax at $10.3 million and fuel tax at $7.7 million.
The counties’ share was capped at $93 million during the recession. Last year, the counties split $103 million, with Hawaii County getting $19.2 million of that. Kenoi estimates Hawaii County spent about $31 million on visitor-related expenses during the 2013-14 budget year, the most recent year calculated.
Increasing the counties’ share of the TAT is an issue that comes before legislative money committees annually. It was the Conference of Mayors’ top priority this year.
“It’s fundamentally unfair and I’m sick and tired of it,” Kenoi told the County Council Finance Committee on Wednesday.
“I think the counties, all of us, should be outraged.”
Neither Tokuda nor Luke could be reached for comment Thursday afternoon.
A working group created by the Legislature last year recommended the cap be removed. It recommended the state get 55 percent of the total, with the counties splitting the remaining 45 percent.
Of that remaining amount, the City and County of Honolulu would get 44.1 percent, Maui County would take 22.8 percent, Hawaii County would take 18.6 percent and Kauai County would get 14.5 percent. Under that scenario, Hawaii County would get about $39 million of the roughly $475 million forecasters predict the tourist industry will bring in next year.
The working group’s bill, however, was met with a cold reception in the Legislature, and now the most likely result is a continuation of the current formula. The details are scheduled to be worked out in House-Senate conference committee during the last week of the session.
