2017-02-10 Letter to Richard Onishi re HB 1586

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os...... Okabe Director � t�ector Harry Kim \.'itt s Mayor -_z- +'!S Barbara J.Kossow Deputy Managing Director N' - (County of c a of`t ®ffzci of firgAnor 25 Aupuni Street,Suite 2603 • Hilo,Hawaii 96720 • (808)961-8211 • Fax(808)961-6553 KONA: 74-5044 Ane Keohokalole Hwy.,Bldg.C • Kailua-Kona,Hawaii 96740 (808)323-4444 • Fax(808)323-4440 February 10, 2017 Representative Richard H.K. Onishi Tourism Committee Hawai'i State Capitol Honolulu, HI 96813 Dear Chair Onishi and members: RE: HB 1586 Thank you for this opportunity to testify in strong opposition to the provisions in HB 1586 that would reduce and then eliminate the counties' share of TAT. The stated purpose of HB 1586 is to address the high cost of living by reducing the tax burden on low- and middle-income earners. While I fully support that purpose, I cannot agree that HB 1586 offers a reasonable solution to the problem. The "low- and middle- income earners" that HB 1586 refers to are citizens of both the State and a county. We represent and serve the same people. Decimating the budgets of the counties in order to reduce the State tax burden would not be beneficial; it would simply force the counties to drastically reduce services or increase other taxes for our shared constituents. TAT is a very important source of revenue to the County of Hawaii (and the other counties), and we rely on it to balance our budget and maintain services for our citizens and visitors. HB1586 would deal a punishing blow to us, and therefore to our taxpayers. Please remember that TAT was established in part to help the counties, but the State of Hawaii already gets the major portion of the TAT revenues. Without the limited share that we currently receive, we would be pressed to raise property taxes about $19M (5.1% of our total budget), and that would worsen the pressures on the portion of the population that is currently managing a paycheck-to-paycheck financial existence. It would hurt a major portion of our population, affecting renters and homeowners alike. Property taxes, after all, are not simply absorbed by a landlord, they are passed on, in whole or in part, to the tenant. My priority this session is to seek an increase in the TAT, not a reduction. The current portion of TAT revenues received by Hawaii County is too low, not too high. The chart below reflects how small a portion of the TAT comes to Hawaii County, and how the percentage has shrunk over the years. County of Hawai'i is an Equal Opportunity Provider and Employer.