Every year for the past two decades, the state Legislature considers whether to appropriate all or part of the counties’s share of the Transient Accommodations Tax. This is the tax imposed on visitor rooms, and it’s a virtually universal way that attractive destinations have to soaking tourists.
Hawaii’s TAT rate of a little over 9% is actually on the low side.
Still, because tourism makes up such big part of our economy, the total take of TAT forms the second biggest fraction of Maui County’s government income, after property tax.
This year, in a newish wrinkle, the Legislature is also making noises about appropriating the utility franchise tax that has always gone to the counties. In an editorial, The Maui News called this piracy.
It is that, but it is also a form of kabuki, highly stylized theater. Every year, the four mayors rush to Honolulu to demand that the state keep its mitts off the county TAT money. As The Maui News said:
Last week, Mayor Alan Arakawa and County Council Chairwoman Gladys Baisa were at the Legislature testifying against SB 359, which is this year’s version of “Let’s Steal The Counties’ Shares” of the transient accommodations tax. A Friday story in The Maui News said the TAT is Maui County’s second largest revenue source at $20 million to $25 million.
Write, phone, text, email or send a smoke signal to our state legislators and tell them to stop these attempted raids on county budgets.
State and county governments are supposed to cooperate to solve problems. Constituents need to remind our state legislators they expect a partnership – not a looting of county coffers.
This may be the year, but never yet has the Legislature actually done much about grabbing the TAT money. What is really going on is that the Oahu-centric legislators make scary noises about grabbing the TAT, panicking the mayors, who then expend all their efforts during the short legislative session defending the TAT, rather than using their time to ask the state for help for their local issues.
This allows the Oahu senators and representatives to go ahead with their own local schemes without questioning from those pesky Neighbor Islanders.
This happens because of the big imbalance in size between state and any county, even the City and County of Honolulu. Losing the TAT would be a huge blow to a county, but picking up the few tens of millions would hardly show up in the multi-billion-dollar state budget.