HomeMy WebLinkAboutCOM 0535.001 2014-2016 Margaret Wille +tv 4s q' Phone No. Hilo: (808)961-8027
Council Member :�P:t'g;L' Z''., Phone No. Waimea: (808) 887-2043
District 9-North and South Kohala � �" �`�� Fax No.: (808)887-2072
*: .�s,.'�r.*: E-Mail: mwille@co.hawaii.hi.us
HAWAII COUNTY COUNCIL
County of Hawai'1
Hawaii County Building Holomua Center West Hawaii Civic Center Bldg.A
25 Aupuni Street 64-1067 Mamalahoa Highway,Suite C-5 74-5044 Ane Keohokalole Hwy.
Hilo, Hawaii 96720 Waimea, Hawai`i 96743 Kailua-Kona, Hawai`i,96740
's `-an
TO: Dru Mamo Kanuha, Council Chair
And Members of the Hawai`i County Council
FROM: t Margaret Wille, Council Member .
V
DATE: November 16, 2015 N
SUBJECT: Additional Information for Communication No. 535
Please find attached additional information for reference during the Communication No. 535
discussion on November 17, 2015.
Thank you.
MW/dh
att
Comm. No. 535. I
Ref. To: P1T=G
Serving the Interests of the People of Our Island Ref. Date NOV 1 7 2015
Hawai`i County Is An Equal Opportunity Provider And Employer
4SCFWG ExecSum DRAFT JK 10.01.2015 11/6/2015 9:46 AM
REPORT TO THE LEGISLATURE
(, ,Z;AL
OF THE STATE OF HAWAII
BY THE STATE-COUNTY FUNCTIONS
WORKING GROUP (TAT)
Summary
The State-County Functions Working Group was established by Act 174, Session
Laws of Hawaii (SLH) 2014, to consider the distribution of duties and
responsibilities for public services between the State and the counties, and to
recommend to the Legislature a model for allocation of transient accommodation
tax (TAT) revenues in future years that properly reflects the division of those duties
and responsibilities. (Those revenues include both TAT and transient occupancy tax
(TOT) collections for time share properties.)
A 13-person Working Group was established,with members chosen by the
President of the Senate, the Speaker of the House of Representatives, the four
county mayors and the governor, and with a Chair selected by the Chief Justice of
the Hawaii Supreme Court.The Working Group's initial meeting was on October 22,
2014.The Working Group met regularly in the following year, and reached a
unanimous decision to recommend a model for allocating TAT revenues at its
meeting of October 21, 2015.The group subsequently reviewed and refined this
report.
The Working Group examined the cost of public services provided by the State and
counties. It considered expenditures grouped in the broad functional categories
used in comprehensive annual financial reports (CAFR) and more fine-grained
analyses of county expenditures, to learn both the relative size of total public service
expenditures and the ratio of tourism-related expenditures by the State and
counties. While no one analysis provided the definitive answer to the Legislature's
question,the Working Group found that the key responsibilities of the State and the
counties for tourism-related public services were distributed in a 55 percent (for
the State) and 45 percent (for the counties) ratio.
The Working Group identified key principles for allocation of TAT moneys, including
fairness,predictability, simplicity and flexibility or resilience in changing
circumstances.The Working Group saw the TAT revenue stream as important to the
work of the Hawaii Tourism Authority (HTA), the counties and the State,and sought
an approach that reflects both public service provision and the need for these
organizations to be able to budget and plan work supported by TAT allocations.
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SCFWG ExecSum DRAFT JK 10.01.2015 11/6/2015 9:46 AM
Recommendation
The Working Group considered several models for the allocation of TAT revenues
on an ongoing basis.The Working Group recommends that:
• The Tourism Special Fund (TSF) receive $82 million in fiscal year(FY) 2015
and FY2016, and amounts changing in line with the Consumer Price Index for
Urban Consumers (Honolulu) in subsequent years;
• Existing appropriations for the Convention CenterTurtle Bay, and the
Special Land Development Fund, totaling$31 million, continue at the same
level in future years; and
• The remainder of the TAT revenues be allocated to the State and counties,
with the State receiving 55 percent of the remainder, andthe counties
receiving 45 percent.'
The recommendation followed on study of both a growth scenario, drawing on
available information about likely developments in visitor spending on
accommodations, and a "what if fecessionary scenario,The Working Group sought
to find an allocation strategy that'cotildhelound to be equitable in both good times
and bad.Allocation models were asiessedih•light,of projected distributions under
both growth and recessionary conditions *
The distribution of revenues to the four-counties has followed an allocation
established m 1990,which has not changed jn later years (44.1 percent to the City
and County of Honolulu, 22.8 percent to Maui Coun , 18.6 sercent to Hawaii
Coun and 14.5 •ercent to Kaual CountY).
The revenues allocated to the counties would continue
to be allocated without ankfurther provision that the money be spent for particular
'purposes. [BCH request VVO-ev-iew/revision of this last sentence.]
The Working Group decided to recognize as continuing in future years the existing
appropitations from TAT revenues (specified in Act 174, and in Acts 117 and 121,
SLH 2015) hut found that any future special appropriations should come from the
share of theliirisclfCtion (State or counties) that made the actual appropriation.If,
for example, the'Legislature appropriates funds above the amount currently set
aside for the Convention Center, that amount would come from the State's 55
percent share of revenues, and not be considered as an obligation preceding the 55
percent/45 percent split.Again, should any of the existing obligations be met and no
longer be needed,the amount set aside for those obligations would be reduced
accordingly.
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SCFWG ExecSum DRAFT 10.01 2015 11/6/2015 9:46 AM
Starting in FY2019, if the counties do not set aside enough funds to cover their
annual obligations to the Employer-Union Trust Fund (EUTF) for health care,the
difference between their obligations and their contributions will be taken from their
TAT allocations. This contingency is expected to be met by the counties, and is not
part of the model considered by the Working Group.
The report provides additional information concerning the history of the TAT;
public expenditures, including expenditures directly or indirectly related to tourism;
principles for developing models of allocation of the TAT revenues; models for
allocation; forecasts for estimating future revenues; issuesrthat affect the
amounts to be allocated. Irleillitir3tiwYr
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SCFWG Members DRAFT 11'6/2015 9:46 AM
State-County Functions Working Group
Members
Simeon Acoba, Chair
Associate Justice (retired)
Sananda Bazc-- Jesse Souki
I..., Budget Director /'l4 1.) Deputy to the Chair
Board of Land and Natural Resources
Edward E. Case (until December 2014)
S Senior Vice President and Chief Legal
Officer Of Counsel
Outrigger Enterprises Group Imanaka Asato LLC
(from January 2015)
c— Mary Alice Evans
Deputy Director George D. Szigeti
Department of Business, Economic President and CEO
Development and Tourism Hawaii Lodging&Tourism Association
(REsigned from Working Group in June
". Steven Hunt 2015)
Tax Manager
County of Merit//.0' d s Ronald K.Williams
President and CEO
E George Kam Atlantis Adventures, LLC
Quiksilver
Tina Yamaki
Neal Miyahira Executive Director
Administrator Surfrider Spirit Sessions
Budget Program Planning and (Appointed to Working Group in June
Management Division 2015)
Department of Budget and Finance
c-- Kerry Yoneshige
Deanna Sako Business Management Officer
Finance Director Department of Accounting and General
County of Matti .A.7/441/0/ Services
Ray Soon
t. Chief of Staff
City and County of Honolulu
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