As City Council advances bill to raise hotel room tax, revenue could help pay for rail

Tourism arrivals in Hawaii are up, but still far below pre-pandemic levels
Published: Oct. 20, 2021 at 8:42 PM HST|Updated: Oct. 21, 2021 at 10:37 AM HST
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HONOLULU (HawaiiNewsNow) - The City Council budget committee advanced a bill Wednesday to raise Oahu’s hotel room tax by as much as 3%.

Bill 40 increases the tax in order to cover some of the city’s operating expenses, such as maintaining its parks and beaches and to help pay for the rail.

While the measure does not clarify how the money will be spent, both the administration and the rail authority want the revenue to go toward building the final 5 miles of the rail line and to pay for future operations.

The rail project is thought to be more than $3 billion short.

A 3% increase in the Transient Accommodations Tax could bring in $50 million to $80 million each year.

“If we don’t build a functional rail system, if we don’t invest from this point forward by using revenue streams that are available and authorized by the legislature, then I think shame on us,” said city Managing Director Michael Formby.

Formby told the committee that an independent financial analysis will be ready by Nov. 17.

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