Baisa Wants Cap on TAT Revenue Repealed

(L-R) Kauai County Council Chair Jay Furfaro, Maui County Council Chair Gladys C. Baisa, City and County of Honolulu Chair Ernest Y. Martin and Hawaii County Council Chair J Yoshimoto. Photo courtesy Maui County Office of Council Services.

By Wendy Osher

Maui County Council Chair Gladys Baisa joined her fellow chairs from across the state in supporting a repeal of the cap on the distribution of Transient Accommodations Taxes that is extended to the counties.

Currently Maui’s TAT revenue from hotel rooms is capped at $21.2 million, but distribution would increase by $16.4 million if the cap were removed, according to information released today by the Maui Office of Council Services.

“As promised, county officials will have a stronger and united lobbying effort this year to ensure that our constituents and visitors get what they deserve,” said Baisa in a statement.

In a joint press release, chairs noted that the cap was imposed three years ago in response to state budget shortfalls. Since then, “the economy has improved,” said Hawaiʻi County Council Chair J Yoshimoto.

“We ask that the state legislators allow the counties to receive our fair share of the TAT revenues so that we can provide the necessary services and meet our obligations to residents and visitors alike,” he said.

Under House Bill 1671, the counties would receive a combined $72 million in additional annual revenue.

If passed in its current form, council chairs say the bill would raise total projected TAT revenues within each county to: $72.8 million in Honolulu; $37.6 million on Maui; $30.6 million on Hawaiʻi Island; and $23.8 million on Kauaiʻi.

In addition to support from council chairs, the repeal has also earned the public support of House Speaker Joe Souki of Maui, who included the item in his opening legislative remarks on Jan. 15.

In his remarks Speaker Souki said removing the TAT cap would allow the counties to better support the state’s tourism industry. The counties, he said, “are the ones who maintain our roads and parks and provide the law enforcement officers and first responders who directly serve our visitors as well as our kamaʻāina.”

Because of the threats faced in recent years, county mayors from across the state joined forces earlier this month seeking to retain the counties’ portion of the TAT.

“There’s a tremendous amount more that the state Legislature has been taking off from the Transient Accommodations Tax for themselves, rather than bringing it back to the county — which is why we were very concerned if they could cap us, they could take all the excess,” said Maui Mayor Alan Arakawa in an exclusive interview on Monday.

All four council chairs including Baisa of Maui, Yoshimoto of Hawaiʻi County, Jay Furfaro of Kauaʻi, and Ernie Martin of the City and County of Honolulu will be testifying in support of the measure, which surfaces for review before the House Committee on Tourism at 9:30 a.m. on Monday, Feb. 3, 2014.