Hawaii lawmakers are advancing a measure that would give the counties a larger share of the state’s hotel tax revenue despite the recently downgraded financial forecast.

County council members and mayors say they desperately need the extra money to help balance their budgets and pay for the increasing strain visitors place on everything from parks and police to roads and rescue services.

But Gov. Neil Abercrombie’s finance chief, Kalbert Young, said the state can’t afford to lose all that cash, especially since the Council on Revenues now projects zero growth this year and hundreds of millions of dollars less than expected over the next two years.

The counties currently get a combined $93 million of the transient accommodations tax revenue since it was capped in 2010. They used to get 44.8 percent of however much the state collected each year to split between them.

House Bill 1671, which cleared the House last month, would lift the cap and revert to the percent. 

Senators got their hands on the bill for the first time Wednesday.

The Public Safety and Tourism committees, chaired by Sens. Will Espero and Gil Kahele, respectively, passed the bill but changed it to leave the percent the counties would receive blank at this point.

Young cautioned the senators, saying if the TAT cap was lifted and the counties got 44.8 percent of the money collected, the state general fund would lose $81 million in fiscal 2015, $98 million in 2016, $107 million in 2017, $116 million in 2018 and $126 million in 2019.

The counties analyzed their budgets recently to get a better picture of how much money they spend each year on visitor-related services. 

Kauai, whose population is 21 percent visitors on any given day, reported spending $44 million a year on visitor-related services. But the county only gets $13.5 million in TAT revenues from the state. If the cap were removed, the county expects to receive an extra $10 million.

Honolulu Mayor Kirk Caldwell estimated that the city spends $140 million to $180 million, 7 to 9 percent of the city’s operating budget, on services that are “key to keeping Honolulu globally competitive as a safe and desirable destination.” The city’s portion of the TAT is currently $41 million.

Honolulu City Councilman Stanley Chang said the city spends $74 million on visitor industry services and helps generate $257 million — nearly 80 percent of the total TAT collected.

Big Island and Maui found that they too spend a lot more on visitor-related services than their shares of the hotel tax money covers. 

Maui Mayor Alan Arakawa pointed at the Hawaii Tourism Authority touting 2013 as another record year for visitors.

He recalled HTA CEO Mike McCartney saying more than 8.2 million people traveled to Hawaii last year, up 2.6 percent from 2012. And that visitors spent $14.5 billion, contributing to the $1.5 billion in state tax revenues, which is $30 million more than 2012.

The bill’s next stop is the Ways and Means Committee, chaired by Sen. David Ige.

Read past Civil Beat coverage here.

Nathan Eagle

Photo: Lifeguard station on north shore. (Keoni Cabral via Flickr)