2018-01-29 Letter to Richard H.K. Onishi re HB 1665 TAT

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Harry Kim Mayor Couttfg Wil Okabe Managing Director Barbara J. Kossow Deputy Managing Director ffirr of till Alavor 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalole Hwy., Bldg 0 • Kailua-Kona, Hawaii 96740 (808) 323-4444 • Fax (808) 323-4440 January 29, 2018 Representative Richard H.K. Onishi, Chair House Committee on Tourism Hawaii State Capitol, Room 429 Honolulu, HI 96813 Dear Chair Onishi and Committee Members: Re: HB 1665 Relating to TAT Hearing Date: 01/30/18 — 9:00 am; House Conference Room 429 Thank you for scheduling HB 1665 for hearing, and giving us an opportunity to make our case for restoration of the percentage share of the TAT to the counties. My understanding is that the TAT was originally established to assist the counties, but the Legislature has always had the prerogative to determine how it will be apportioned. Given Hawaii County's limited resources (and seemingly unlimited needs), we are fortunate that the Legislature has never wavered in allowing the counties to share in the TAT, and we thank you for that. The 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. The current allocation has dealt a punishing blow to us, and therefore to our taxpayers. You and I represent and serve the same people. Decimating the budgets of the counties is not beneficial; it simply forces the counties to drastically reduce services or increase other taxes for our shared constituents. The State of Hawaii has always received the major portion of the TAT revenues, but I think it is correct to say that when the TAT was first established, it was envisioned as a way to help the counties deal with the effects of tourism, including such costs as police, fire, parks, and other infrastructure impacted by tourists. When the Great Recession hit, the share of TAT for the counties was capped, but that was only supposed to be temporary, until the economy recovered. We are well past the recession now. Without the share that the counties would have received prior to the cap, we have been forced to raise property taxes and are now considering adding to the GET, both of which worsen the pressures on our population, many of whom are barely managing a paycheck -to -paycheck financial existence. Property tax increases hurt a County of Hawaii is an Equal Opportunity Provider and Employm