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Testimony of
Mufi Hannemann
President&CEO
Hawaii Lodging& Tourism Association
County of Hawaii COUNTY CLERK
County Council COUNTY OF HAWAPI
Committee on Finance RECEIVED
Bill 81 (2021) Time .M-
October 19, 2021 Date OCT 1 8 2021
Chair Kaneali`i-Kleinfelder and members of the Committee, mahalo for the opportunity to submit
testimony on behalf of the Hawaii Lodging & Tourism Association,the state's largest private sector
visitor industry organization.
The Hawaii Lodging& Tourism Association—nearly 700 members strong,representing more than
50,000 hotel rooms and nearly 40,000 lodging workers—opposed House Bill 862 which, among myriad
other issues, stripped the State Transient Accommodations Tax(TAT) allocation to the counties and
allowed for up to an additional, three-percent surcharge to be levied on lodging properties. This
surcharge represents a 29%increase to the TAT that comes at an inopportune time for an industry that
has experienced economic strife due to the pandemic. However, after the veto, override by the
Legislature, and ultimate passage of HB 862, we recognize that the County of Hawaii will need to
replace millions of dollars of tax revenue that was previously generated by the annual allocation of State
TAT monies. These things considered, we would like to provide comments on the proposed version of
Bill 81 (2021).
As Section 1 of the proposed legislation notes, the county allocation of TAT monies was established to
"offset the impacts of visitor activities on county infrastructure and services". The proposed legislation
further states that the"County's tax policy should reflect recouping the impacts of visitor activities", and
we feel strongly that the measure should also indicate how these tax monies will be managed and who
will oversee it to ensure that they are used for tourism-focused initiatives and projects.
As the vast majority of monies raised by the TAT—and the proposed three-percent surcharge—will
undoubtedly come from the pockets of visitors, HLTA agrees with the notion that it should be used
specifically to address impact created by travelers to Hawaii County. The opportunities in this regard
are endless and could include more routine county tasks such as road refinishing and updates to our
infrastructure but should also be used on projects more directly associated with tourism like trail
management,beach and park maintenance, additional support for first responders, and the provision of
adequate public safety staffing at beaches and other county installations.
If the goal of the Council is to use the surcharge to offset county expenses driven by tourism, we feel
strongly that there must be transparency and oversight of the tax monies that are collected. The industry
would welcome any opportunity for continued discussion with the Council on the use of these funds and
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would also support the establishment of a special tourism fund in which surcharge monies would be
deposited. This would align with the legislation's stated aim and would ensure that tax dollars are being
used appropriately and efficiently.
Mahalo for the opportunity to provide these comments.