Counties Want State to Lift Cap on Their Share of Hotel Room Taxes

In 2011, the State of Hawaii government passed a bill that capped each counties' share of the hotel-room tax revenue at $93 million a year to help balance the state budget.  In 2013, the state decided to make the cap permanent.  However, county officials are now trying to change the law to remove the cap and give the counties 44.8 percent of the hotel room tax that they collect annual.  This would be broken down further and would give Honolulu 41.1 percent of this share, Maui County 22.8 percent, Hawaii (Big Island) County 18.6 percent and Kauai County 14.5 percent.

Honolulu Mayor Kirk Caldwell and Maui County Mayor Alan Ara­kawa stated that the counties pick up a significant portion of the costs of tourism, such as parks, roads and public safety, and therefore they should enjoy a greater share of hotel room tax revenue.  Mayor Caldwell stated, "So we're really looking for help here. As mayor, I have not been afraid to go and propose fees and increases in taxes where necessary to provide the services that everyone demands and needs. And so we're here today to ask for some help to make sure that we keep ourselves on the front edge of tourism in the world."  Mayor Arakawa  added, "The counties need to be made whole. It's a fairness issue."

State Representative James Tokioka argued that the state lawmakers are frustrated with some of the county policy choices while the state government was making budget cuts during the recession.  Tokioka stated, "You know how frustrating it is for us sitting over here that our friends and our cousins from the counties are doing these things while we're furloughing teachers and cutting ag inspectors and all of these positions. So that's the kind of thing that is very frustrating when we sit in this seat."

Source: Honolulu Star Advertiser, 2-26-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com