Plan to raise hotel room tax to fund beleaguered rail project irks some

HONOLULU (HawaiiNewsNow) - A plan to increase the hotel room tax for 13 years to pay for the financially-troubled rail project is getting some pushback from hotel executives and neighbor island officials.

"We oppose any increase in the transient accommodation taxes," said Mufi Hannemann, CEO of the Hawaii Lodging and Tourism Association.

"It's going to make it more difficult to make it affordable for folks to come to Hawaii if they keep increasing these taxes."

Hannemann said the visitor industry expects to see a slowdown as early as this fall and that increasing the transient accommodation tax from 9.25 percent to 10.25 percent through 2030 could mean fewer tourists.

Meanwhile, neighbor island leaders said they don't appreciate higher taxes on their visitor industry going to fund Oahu's rail.

Earlier this year, all three neighbor island counties increased their property taxes.

"I do not support the increase in the TAT on the neighbor islands or the entire state to fund that project," said Kauai Council Chair Mel Rapozo.

Added acting Big Island Mayor Wil Okabe: "It doesn't sit well with neighbor islanders. From Kauai, Maui to the Big Island," he said.

Lawmakers say they hope to address these concerns by increasing the counties share of the TAT from $93 million to $103million.

They said the tax is still lower than other major destinations and that revenue from the tax will grow.

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