Counties’ hotel tax share to rise by $10M
HONOLULU — Hawaii’s counties will receive a total of $10 million more in annual hotel tax revenue under a plan state lawmakers have approved.
Since 2011, the counties’ share has been capped at $93 million. They had sought a return to splitting 44.8 percent of the state’s transient accommodations taxes. That arrangement would have brought in an estimated $72 million more for the counties next year, or about a 77 percent raise.
State lawmakers decided to raise the cap rather than revive the old sharing structure.
Of the $10 million bump, Honolulu will get $4.4 million, Maui County will get $2.3 million, Hawaii County will see $2 million and Kauai County will get $2 million.
County officials have argued that they should receive a larger share of the revenues because they bear the brunt of providing services such as police, roads, and water and sewer systems that visitors use.
Rep. Tom Brower, a Democrat representing Waikiki and Ala Moana, said the bill will also pay for a study of how visitors use county resources. Any future raises might require that counties demonstrate the money will pay for county operations used by visitors, Brower said.
Maui County Mayor Alan Arakawa issued a statement Saturday saying that the extra hotel tax funds, along with some budget cuts, will stave off the need for an increase in property taxes next year. Earlier, he had proposed property tax increases that averaged out to a 6.5 percent overall hike.
The bump still leaves Honolulu looking at other solutions — including possible property tax increases — to fund its $2.1 billion operating budget.