HomeMy WebLinkAboutCOM 0709.001 2014-2016DRU MAMO KANUHA
Council Member
Distric17,Central Kona
TO:
PHONE: (808) 323-4267
FAX: (808) 323-4786
EMAIL:dkanuha@cahawaii. hi. us
HAWAII COUNTY COUNCIL
West Hawaii Civic Center 74-5044 Ane Keohokalole Highway, Kailua-Kona, Hawaii 96740
FROM:
DATE:
Members of Hawaii County Council
, Dru Mamo Kanuha, Council Chair
February 29, 2016
Attached is a copy of a presentation relating to the Transient Accommodations Tax to be
made by Maui Council Chair Mike White during the Finance Committee meeting on
March 1, 2016, as requested in Communication 709.
For your convenience, copies of the presentation will be made available to you during the
meeting.
Thank you.
DK/jc
Attachment
Ref. To:.G
Ref. Date MAN U 1 zols
Hawai `i County is an Equal Opportunity Provider and Employer.
E ASS�C'9
a. CQUNS��`f
P i
ALLOCATION OF TRANSIENT
ACCOMMODATIONS TAX
(TAT) REVENUE
The State took the counties' TAT money to
cover losses when times were challenging,
but failed to make significant adjustments
when county property values dropped by a
greater percentage.
20090
• Total State tax revenues dropped by 9.8%
due to the economic downturn.
• The TAT was increased to 8.25% on July 1,
2009 and 9.25% on July 1, 2010 to offset the
loss of revenues.
• At the same time, county revenues grew
slightly with increasing property values.
201000
Total State revenues began to increase,
but remained below 2008 levels.
70-- 4L ?=J I
The TAT distribution to the counties was
capped at $93 rY11111011. By this time,
county property values were in significant
decline and property tax revenues were
eroding.
.s
r -I Or Ar
q
II
ie State is today:
enues have rebounded
rn rlby34.4% o nearly _
3 billion over 2010.
Cumulative revenue increase from 2010-2015
State $6.s billion
Cumulative revenue increase from 2010-201
Counties $31.5 million
10 1 0=20'01'"
By how much did the counties'
�4N
effective property tax rate go up?
C&C of Honolulu
Maui County
Hawaii County
Kauai County
Property
values
5% up
19.4% down
8.1% down
7.6% down
Impact of the TAT cap plus 2%
increase in TAT (7.25% to 9.2.E.",
• Increase in State's net TAT
revenue from $8.3 million
in 2007 to nearly $205
million in 2015.
• The counties are losing $85
million annually.
.I _.L _
A quick look at the growth of TAT
Total TAT
Counties State
1997
$126 million
$101.3 million '� • �
2007
$224 million
$101.8 million
2015
$421 million
$103.0 million
A quick look at the projected growth of State
General Fund revenues:
• Projected revenues for FY2017 is
$7,132,800,000
• This represents the following increases over
previous years:
• $547,100,000 over FY2016 (8.3%)
• $825,000,000 over FY2015 (13.1%)
• $1,148,400,000 over FY 2014 (19.2%)
COMPARING THE TAT SHARE INCREASE SINCE 2007
BETWEEN STATE AND COUNTIES
State
Counties
2363%
$ 196,647,193
2.2%
$2,230,802
While counties don't receive a fair share of the TAT, costs
related to public safety services have gone up.
Cost includes operational
FY 2015
Increase
and salary
4 Police Departments
$93.9 M
31.7°/a
4 Fire Departments
$60.5 M
41.2%
4 Parks Departments
$15.9 M
14.4%
Total
$170.3 M
30.8%
E-1,'-Mww
Forjust the three departments, expenses have
increased more than $170.3 million since 2007.
But the counties only
-0
et $2.2 million more
annually for the same period.
Ares Yt the
visitor$
suppose to
for eaY ing
county
servith cesey '
e.
4 HVS LODGING TAA REPORT - USA
How do we
compare with other
jurisdictions?
Out of 150 municipalities, Hawaii
ranks 149th i n receipt of all
taxes on lodging establishments.
(sales tax, occupancy tax, special district tax, etc.)
• The State of Hawaii provides to the
-- counties nearly the lowest percentage in
2014 HVS LODGING TAX REPORT - USA
-
lodging taxes:
• Honolulu receives 20.4%
• The Neighbor Islands receive 17.1%
• Compared to our peers nationally:
35 127
receive 100% receive
of taxes on 50% or
lodging more
•
F
receive
25% or
more
0tnq
Which municipality is 15
Rhode Island
Distribution of Rhode Island lodging tax revenues:
Regional tourism districts
133.8% 1
$6,920,961
Municipalities (1% tax and share of 5% tax)
36.2%
$77415,454
State of Rhode Island
..
Providence Warwick Conv. & Visitors Bureau
10.6%
$271787928
Rhode Island Convention Center Authority
1.6%
$3187016
100%
$2074817180
Average lodging tax rate and
revenue distributions of
9.15%
150 municipalities 1 $409,256,000
Average lodging tax rate and
revenue distribution based on
2.26%
current legislation I $103,000,000
4.33% I 13.48%
$193,744,000 1$603,000,000
10.99% I 13.25%
$500,000,000 1$6031000yOOO
*Note: Average for HVS Study of 150 Cities: The figures include sales taxes, city taxes, county taxes and special district taxes on lodging
revenues. No property taxes included. Figures do not include the .5% GET surcharge for C&C of Honolulu.
Note: Hawaii amounts reflect General Excise Tax and Transient Accommodations Tax on lodging only. Figures
do not include the .5% GET surcharge for C&C of Honolulu.
Counties
State1
•
How much should the
countiesget?
Tax rates and
4.63%
8.62%
distribution based 1
$210y484y800
Request
$392y5l5y2OO
', . 1 1 1 1 1 1 1
Tax rates and distribution based
4.14%
9.11%
13.25%
on legislation prior 2011 with
counties receiving 44.8% of
$188,594,403
$4147405,597
$603,000,000
TAT
Tax rates and distribution based
3.05%
10.20%
13.25%
on TAT Working Group
Proposal
$138,586,300
$4647413,700
$603,000,000
Note: Hawaii amounts reflect General Excise Tax and Transient Accommodations Tax on lodging only. Figures
do not include the .5% GET surcharge for C&C of Honolulu.
At a minimum,
the counties'share of
the TAT should be
)'0 of total
TAT collections.
NNW
The State feels we shouldn't give
the TAT to the counties without
getting something in return.
Counties' answer:
As partners in Hawaii's
governance, the State
should RETURN
the rightful share of the TAT to
the counties, which provides
essential services to our
residents.
Mahalo.