2018-02-15 Letter to Sylvia Luke re HB 1665, HD 1 Relating to Transient Accommodations Tax (TAT)

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Harry Kim Atayor ettuttfu Offirrtif Wi Okabe Alanaging Director Barbara J. Kossow Deputy Managing Director 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 9616553 KONA: 74-5044 Ane Keohokalole Hwy., Bldg C • Kailua-Kona, Hawaii 96740 (808) 323-4444 • Fax (808) 323-4440 February 15, 2018 Representative Sylvia Luke, Chair Committee on Finance Hawaii State Capitol, Room 308 Honolulu, HI 9681:3 Dear Chair Luke and Committee Members: Re: HB 65, HD 1 Relating to the Transient Accommodations Tax (TAT) Flea lig Date: 02/16/18 — 4:00 pm; House Conference Room 308 HB 1665, started as a part of the Hawail Council of Mayors package, and would have restored the countiesallocation of the TAT to 45%. B 1665, HD 1, on the other hand, would require that the counties request reimbursement for various expenses, and justify each request in order to receive ANY TAT. While it is not clear what expenses would qualify for reimbursement (e.g., what percentage of overhead, salaries, maintenance products used at a park that serves locals and visitors, etc.) nor how much revenue the counties would ultimately receive, it is clear that the process would be a bureaucratic nightmare. Even if the counties wound up getting more TAT money than at present, it woul not be worth it. This bill would cripple the partnership that has been created over the y _ars in an imperfect but meaningful attempt to best serve the 1.4 million people of Hawaii. Therefore, you will not be surprised that we cannot support 1665, HD 1, and ask that it be held, or that the original intent of HB 1665 be restored. My understanding s 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. Give Hawal'i 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 1 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. f Ha Ai`i is an Equal Opportunity Provider and Nmploycr.