Proposal: Cut counties out of 'room tax' revenues

Proposal: Cut counties out of 'room tax' revenues
Updated: Feb. 14, 2017 at 3:46 PM HST
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HONOLULU (HawaiiNewsNow) - A proposal that would cut the counties out of hotel room tax revenues spurred strong opposition at the state Legislature on Tuesday.

House Bill 1586 would phase out the counties' share of the Transient Accommodations Tax over three years and put in new income tax brackets to address the high cost of living for low- and middle-income earners.

Not surprisingly, the counties strongly opposed the measure.

"Why are we going to burden our local residents when we already are taxing our visitors who utilize our fire, our public safety, our lifeguards and our parks, even our roads for that matter?" said Stacy Crivello, of the Hawaii State Association of Counties.

State Rep. Richard Onishi, chairman of the Committee on Tourism replied: "Because we're taking money out of our income tax pot, we felt it was appropriate to look at the TAT to replenish that money because we provide services that in other state and other jurisdictions are paid through property tax."

Last legislative session, the counties got $103 million of TAT revenues, under a cap set by lawmakers.

The measure to end TAT funding for counties is among several before lawmakers this year that would change how hotel room tax revenues are distributed. The TAT has been growing in recent years, thanks to record Hawaii tourism. And that means there's even more competition for the tax dollars.

Meanwhile on Tuesday, another bill (House Bill 317) that would have changed how TAT revenues are allocated to the counties was gutted. The newly-written proposal would allocate $2 million to the Hawaii Tourism Authority to deal with homelessness in resort areas.

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