House and Senate lawmakers agreed Wednesday to give the counties $103 million of state hotel tax money for fiscal 2017, which starts July 1.
They left the percent each county receives unchanged. The House had proposed reducing Honolulu’s share by 14 percent and boosting the amount each neighbor island gets.
Instead, Honolulu will continue to receive 44.1 percent, Kauai will get 14.5 percent, Hawaii will get 18.6 percent and Maui will receive 22.8 percent.
“The counties, although not happy, are thankful for what we were able to receive,” Maui County Councilman Mike Victorino said after the committee’s vote on Senate Bill 2987.
“We look forward to next year and removing the cap,” he said.
County officials have lobbied state lawmakers to return to the prior system, in which the counties received a percent of the overall hotel tax revenues. That amount ebbs and flows each year with the strength of the tourism industry — which has been thriving of late.
The cap has allowed amount the state collected from transient accommodations tax revenue to increase by $196.6 million from 2007 to 2015, while counties only received an additional $2.2 million, according to Maui Council Chair Mike White. The TAT is currently 9.25 percent. TAT revenue for the current fiscal year is expected to total about $450 million.
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.
When the economy sputtered, the Legislature in 2011 maneuvered 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.
If lawmakers did nothing this session, the counties would have received $93 million next fiscal year.
The conference committee was co-chaired by Rep. Tom Brower and Sen. Kalani English. The bill will head to a vote before the full House and Senate in the coming days.
Stay Up To Date On The Coronavirus And Other Hawaii Issues