HomeMy WebLinkAboutCOM 0081.005 2018-2020 p/couinci
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RESORT ASSOCIATION
February 18, 2019 0 (?.
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Mr. Aaron Chung, Chair
Hawaii County Council C)�C
West Hawaii Civic Center -v �n
74-5044 Ane Keohokalole Highway
Kailua-Kona,HI 96740 1 =
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Testimony in Opposition to Bill 19 increasing the GET by an additional .025 Percent'°
Dear Chair Cliung and Members of the Hawaii County Council,
The Kohala Coast Resort Association(KCRA) is opposed to raising the GET by an additional .025 percent. There are
several reasons we oppose this bill:
1) The GET was just raised .025 percent beginning January 2019, and we were told that those funds were
supposed to be earmarked for the same types of transportation enhancement projects;
2) A little more than a year ago the TAT was raised to 10.25 percent to fund the Honolulu Rail Project. Visitors
to our island feel that increase in the overall price of their stay;
3) County of Hawaii property taxes within the resort zoned areas experienced a 10.4 percent increase last year, up
to $11.55 per$1,000 valuation;
4) Fuel taxes were also increased last year, and those were also supposed to be earmarked for the same types of
projects as this proposed additional GET increase;
5) The visitor industry on our island has been severely impacted by the volcanic activity,with the Kohala Coast
still feeling those impacts during the first quarter of 2019. The group market has been particularly impacted.
Like the County of Hawaii,we are doing our best to protect employment along the Kohala Coast as we work
to rebuild and stabilize our industry,but this additional charge puts us at a disadvantage compared to other
islands (Maui).
We know that the County of Hawaii has experienced lost property tax revenues and increased costs as it continues to
assist residents impacted by the volcanic activity. We commend you for all of your efforts on behalf of residents to our
island.
However,we ask that you look at other areas of revenue generation, including the potential of creating a separate
property tax classification for vacation rentals currently operating in residential and agricultural areas of the island,
since they are not currently paying the same property tax rates as those operating in resort zoned areas.
Hawaii Tourism Authority recently released its Visitor Plant Inventory, and I shared,a copy with all of you.Their
point-in-time analysis shows that there are 7,051 individual rental units being advertised on our island representing
13,396 rooms, compared to 6,110 hotel rooms for our island.
We also support the Real Property Tax Working Group's assessment that tax classifications for our island should be
thoroughly reviewed, and areas of the island possibly rezoned, as many properties that are currently zoned agriculture
are in actuality residential, and those additional tax rates should be applied.
PO Box 6991,Kamuela, HI 96743*(808)747-5762*kohalacoastresortassnagmail.com *www.kohalacoastresorts.comr
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Ref. Dote FEB 1 9 2019
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Finally,we believe that the County should immediately address areas within its control where there are impediments to
conducting business in a timely fashion. For example, delays in obtaining permits, inspections and certificates of
occupancy are costing millions of dollars each year,because there are staffing shortages in key departments.
During a recent presentation to the Kona-Kohala Chamber of Commerce,Department of Public Works Deputy
Director Merrick Nishimoto explained that the building division is working to cross train employees, streamline
checklists and will soon be rolling out the EnerGov tracking system for permits. We applaud those efforts,but we feel
very strongly feel that more must be done now.Those delays in the county's oversight process to allow construction to
move forward smoothly, impacts every industry's ability to conduct business—construction, retail,tourism and more.
The KCRA is a collection of master-planned resorts and hotels situated north of the Kona airport which represents
approximately 3,500 hotel and timeshare accommodations and an equal number of resort residential units. KCRA
member properties employ more than 5,000 Hawaii Island residents.'KCRA member properties annually pay more
than $20 million in TAT, $20 million in GET, and $10 million in property taxes, as shown in our most recent
economic impact report(2010-2015).
Thank you for your consideration. We recommend you oppose passage of Bill 19.
Sincerely,
Administrative Director
PO Box 6991, Kamuela, HI 96743*(808)747-5762*kohalacoastresortassnAgmail.com *www.kohalacoastresorts.com