2019-02-12 Letter to Angus L.K. McKelvey HB 421, HD1 Relating to the General Excise Tax

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Harry Kim Mayor County of Hawaii Office of the Mayor Wil Okabe Managing Director Barbara J. Kossow Deputy Managing Director 25 Aupuni Street, Suite 2603 • Hilo, Hawai'i 96720 • (808) 961-8211 • Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalole Hwy., Bldg C • Kailua-Kona, Hawai'i 96740 (808) 323-4444 • Fax (808) 323-4440 February 12, 2019 Representative Angus L.K. McKelvey, Chair Committee on Economic Development and Business Dear Chair McKelvey and Committee Members: RE: HB 421, HD1 Relating to the General Excise Tax Thank you for this opportunity to testify against HB 421, HD1. Helicopters are a valued component of our tourism industry. They also have been a source of endless complaints from communities that lie in their flight paths, and there should be no doubt that noise can constitute both a nuisance and a health hazard, especially in otherwise tranquil rural areas. Helicopter companies are now asking the Legislature for special treatment (what they argue is "parity" or "equity") with respect to the general excise tax. There is no suggestion of economic hardship; there is no credible argument (that I know of) that new facilities will be attracted to Hawaii; and there is no suggestion that the industry would use its savings to better accommodate those who live in their fly -over country. The exemption will simply add to the companies' bottom line. This year's bill is slightly better than last year's version, in that it asks for only a five-year general excise tax exemption, and it adds a provision that "75% of the helicopters serviced and maintained annually in the facility are equipped with quiet technology." I appreciate that the prior committee has added a definition of "quiet technology." But I also ask you to recognize the frank testimony of Jack Harter Helicopters that "there is no such thing as a 'quiet helicopter.- As far as I can tell, there is no hint as to how effective so-called "quiet technology" is or will be. At a minimum, that needs further clarification. As you struggle to balance your budget, one must ask whether the added profits for these companies' owners could be better utilized in meeting the multiple needs that Hawaii faces. To me, the answer is that our transportation, education, social service needs, etc., should be a higher priority. In addition, I don't think it would be unfair to say that tax giveaways should be reserved for good corporate citizens. I have met with tour operators and asked them to develop a plan to address noise and safety. They have taken some initial steps, and I commend them for that. Moreover, I am hopeful that tour operators and community members can work together. However, the history laid out in SCR 183 (2018) is eye-opening: County of Hawaii is an Equal Opportunity Provider and Employer.