As City Council passes bill to raise hotel room tax, portion of revenue could help fund rail

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Published: Dec. 1, 2021 at 8:10 PM HST|Updated: Dec. 1, 2021 at 8:11 PM HST
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HONOLULU (HawaiiNewsNow) - The City Council approved a new 3% tax increase on visitor accommodations on Oahu, which would raise the hotel and vacation rental tax to 13%.

City councilmembers said the tax could bring in about $75 million.

The mayor’s plan diverts 59% of those funds to the embattled rail project for the next two years and about 40% after that.

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Critics said the money should go to underfunded city services and added that the Honolulu rail authority will waste the money.

“We should be talking about how can we use this fund to fix our parks, fix our roads, find housing solutions, deal with the homeless crisis, maybe even support our first responders,” said Councilmember Augie Tulba.

Supporters see the project as a key to affordable housing and redevelopment of central Honolulu.

“It is the economic development and affordable housing benefits along the corridor all the way from the west side to Ala Moana that is going to hopefully transform the city of Honolulu,” said Windward Councilmember Esther Kiaaina.

HART and the city said they hope the guaranteed revenue will reassure the federal government the project is viable.

The mayor is expected to sign the bill quickly.

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