Maui Resolution Urges Legislature to Increase TAT to County

“We are the state of Hawaiʻi. The counties make up the state of Hawaiʻi,” said Baisa. “The rest of this month is going to tell the story, but I want you to know, rest assured, that all of us are on the watch … we will be watching and we’ll try to bring home the bacon.” Council Chair Gladys Baisa, April 4, 2014. Photo by Wendy Osher.

By Wendy Osher

The Maui County Council today passed a resolution urging the Hawaiʻi State Legislature to pass House Bill 1671, to increase the transient accommodations tax revenue to the counties.

The resolution was introduced by Council Member Mike White who said, “this is a measure, which in my view, is one of fairness.”

HB 1671 proposes to remove the current cap on the counties’ share of the TAT, which is a tax that is collected when a guest stays in a hotel or other accommodation in the state for less than 180 days.

The TAT cap was established in 2011 as a temporary measure to assist the state government in its recovery from the economic downturn. Now, three years later, county officials say it’s time to restore those funds.

County officials say in its original form, HB 1671 would return 44.8% of TAT revenues to the counties, which translates to approximately $165 million in annual TAT revenue to the counties.  That’s about $72 million more than the current capped value of $93 million, according to information compiled by the Office of Council Services.

“It’s very important that we make our wishes known because these are revenues that we do depend on, and put forward to and responsibly spend every year,” said White during the council meeting.  

“It is the counties that provide services such as water and sewer, police and fire protection, road improvement and park development and maintenance – all of which are used to provide visitors with a quality experience,” he said in a press release statement. “Restoring the counties’ share of the TAT is a vote for maintaining a healthy visitor industry across the state.”

According to information compiled by Council Services, the state’s annual tax revenues have increased more than $1.6 billion, or 32%, since 2009. The resolution notes that during the same period revenues from the neighbor island counties were behind, with Maui County’s down 4% during that period.

Council Member Don Couch read part of the resolution saying, “the state and the counties serve the same constituents, and government should work together to reduce the burden being placed on residents through real property taxes. That is the most important part of this,” said Couch.

“We’ve got to work together and I hope the state listens to this and works together with us to ease the tax burdens,” said Couch.

Council Member Michael Victorino said he is “very disappointed” with the state administration’s opposition to the bill, but said he thinks the Legislature is willing to look at it. “Please be fair and help us out. That’s all we’re asking. Give us a fair share. We all face the same problems with fiscal restraints; we all face the same problems as far as collective bargaining increases that came across the board … I just hope the state Legislature will recognize that.”

According to information compiled by Council Services, Victorino said some administration officials “erroneously view the measure as a potential loss, rather than a promised investment in the counties.”

Council Chair Gladys Baisa credited Council Member White with researching the history of the TAT and providing leadership on the issue.

“We are the state of Hawaiʻi. The counties make up the state of Hawaiʻi,” said Baisa. “The rest of this month is going to tell the story, but I want you to know, rest assured, that all of us are on the watch … we will be watching and we’ll try to bring home the bacon.”