HomeMy WebLinkAboutCOM 0055.003 2004-2006 Hawaii State Association of Counties
Counties of Kauai, Maui and Hawaii, City 8. County of Honolulu
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January 5, 2005
MEMORANDUM
TO: Council Members
FROM: Gary S. Safarik, Chair, and HSAC Vice Presiden '
SUBJECT: Request by HSAC Executive Committee to C'onshler Measures for Adoption
in the 2005 HSAC Legislative Package
I am writing to share some background information relating to four proposed measures for
inclusion in the 2005 HSAC Legislative Package, as contained in a resolution on today's agenda.
At the December 7, 2004 HSAC meeting, new legislation for the 2005 HSAC Legislative Package
was introduced by Kauai County for consideration by the various Councils prior to the opening of
the Legislature on January 19, 2005. The three proposals transmitted by Kauai Councilmember
and HSAC Treasurer James Tokioka were approved by the Kauai County Council at its
November 4, 2005 meeting. In draft form, these bills are:
1. RELATING TO COUNTIES -Amends Chapter 46, H.R.S., to allow the State to
indemnify the counties when the State receives county assistance or services, or acts as a
vendor to the counties.
2. RELATING TO INTOXICATING LIQUOR- Amends Chapter 281-17, H.R.S., to show
liquor commissions to use revenues derived from fines and fees in furtherance of
programs that work to minimize the incidence of alcohol abuse.
3. RELATING TO CONVEYANCE TAX -Amends Chapter 247-7, H.R.S., by providing
the counties with a percentage of the conveyance tax collected, to be used for the
development of affordable housing.
Also, at the most recent meeting of the HSAC Executive Committee on December Th in
Honolulu, our colleagues from the City & County of Honolulu, Maui and Kauai requested the
Hawaii County Council to approve a bill for the 2005 HSAC Legislative Package that would
allow counties with populations exceeding 200,000 to establish a general excise tax. This
measure was seen as a priority item for the upcoming legislative session.
In his transmittal of the proposed 2005 Legislative Package, HSAC President Dain Kane
recommended that "the county councils identify the following proposals as priorities" for the
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legislative session: (1) unadjudicated traffic fines; (2) authorization for a county general excise
tax; and (3) the 2005 NACo Conference appropriation.
These measures were seen as priorities because they provide additional revenue to the counties.
Moreover, President Kane stated that preliminary discussions with some state legislators indicated
that these bills have a strong chance of success.
As you may recall, ow Council rejected this measure by a vote of 6-3 on November 24, 2004.
However, by request of the neighbor county councils, I ask that our Council take up this bill.
This measure also offers a significant revenue boost to the County of Hawaii. The G.E.T.
authorization bill, as proposed, would grant the City & County of Honolulu a county-level excise
tax in tandem with the City relinquishing its share of the transient accommodations tax (T.A.T.).
In tum, the distribution of T.A.T. revenues to neighbor island counties would be as follows: Kauai
County, 10.2%; Maui County, 16.1%; and Hawaii County, 13.1%, an increase of approximately
50% to Hawaii County. While Honolulu's fiscal prospectus would improve with a new G.E.T.
revenue base, the neighbor islands would benefit from a greater share of T.A.T. collections.
The bill is, in part, prospective, in that authorization to adopt a county excise tax would not
materialize until a neighbor island county achieved a population of 200,000 or more. It is
enabling legislation; it does not obligate us to adopt a county excise tax now or in the futwe. It
does not present an immediate issue for neighbor island counties, as shown by the census figures
below.
MAUI COUNTY HAWAII COUNTY STATE OF HAWAII
Population, 2003 estimate 135,605 158,423 1,257,608
Population, % change, April, 2000 -July, 2003 5.9% 6.6% 3.8%
Population, 2000 128,094 148,677 1,211,537
Population, % change, 1990 - 2000 27.6% 23.6% 9.3%
(Ref: U.S. Census Bureau "Quick Facts")
An excise tax will broaden the counties' revenue base. It would apply to a broader segment of
residents and visitors, provide the counties with greater financial resources and flexibility, relieve
the burden of taxation home by property owners, and support the principle of county home rule.
I hope this information is helpful.
GS/rf
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