House and Senate lawmakers have a lot of negotiating to do over the next two days if they want to reach an agreement on how much state hotel tax money to give the counties.

The Senate version of the bill simply increases the cap to $103 million for fiscal 2017, which starts July 1, up from $93 million. And it preserves the percentage that each county has long received.

Honolulu would continue to get a 44.1 percent share; Kauai would receive 14.5 percent; Hawaii would get 18.6 percent; and Maui would receive 22.8 percent.

The House version of the bill blanks out the overall allocation and dramatically changes the percent each county would get.

The House proposal knocks Honolulu down to 30 percent while boosting the portion each neighbor island county receives. Kauai would get 20 percent; Hawaii County would get 25 percent; and Maui would get 25 percent.

Senator Kalani English Alexander Baldwin presser. 20 april 2016.

The counties don’t particularly like either version under consideration, and Honolulu especially hates the House proposal, which would strip the county of $14.5 million if the cap ends up at $103 million.

County officials have said their preference would be to remove the cap altogether and return to a system where the counties receive a percent of the overall hotel tax revenues, an amount that ebbs and flows with the strength of the tourism industry — which has been thriving of late. 

As Maui Council Chair Mike White pointed out last month in his testimony on the bill, the cap has allowed the state’s annual share of transient accommodations tax revenue to increase by $196.6 million from 2007 to 2015, while counties only received an additional $2.2 million. The tax is 9.25 percent.

The counties rely on the TAT money. It is one of their biggest sources of revenue after property taxes to fund a variety of programs and services, including lifeguards, police, parks and roads.

But when the economy sputtered, the Legislature in 2011 found a way for the state to take an ever-increasing share and use the money however lawmakers chose — even though the tax was created 30 years ago specifically to help ease the burden the visitor industry places on public resources.

The House-Senate panel working to reach an agreement on the bill is set to reconvene at 2 p.m. Wednesday. The conference committee is co-chaired by Rep. Tom Brower and Sen. Kalani English.

“We have two very different policies on this bill,” English told Brower at a conference committee meeting Tuesday afternoon.

The deadline to pass fiscal bills out of committee is Friday. The legislative session ends May 5.

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