Honolulu Mayor Kirk Caldwell was gung-ho for increasing the minimum wage during a hearing before legislators Thursday afternoon.

But his counterparts from Kauai and the Big Island — hard hit by natural disasters last year — were less enthusiastic. Their economies are reliant on mom and pop shops, many of which are still recovering from the disasters, said Kauai Mayor Derek Kawakami.

“We as a county wouldn’t be ready to take on that discussion,” Kawakami said. “I’m not sure if we’d have the ability to take on that discussion.”

Mayor Caldwell listens to Hawaii Mayor Harry Kim during a joint WAM/Finance committee meeting county Mayors.
Honolulu Mayor Kirk Caldwell, right, listens to Hawaii County Mayor Harry Kim during a joint hearing at the Capitol on Thursday. Cory Lum/Civil Beat

Hawaii County Mayor Harry Kim also said that a minimum wage increase could hurt small businesses on his island, and added that higher pay is just one piece to figuring out how to make Hawaii more livable.

Maui County Mayor Mike Victorino didn’t weigh in on the minimum wage issue.

All four mayors supported a proposed new formula affecting each county’s share of the transient accommodations tax.

Gov. David Ige has proposed removing the current $103 million cap on the the portion of the state’s hotel tax that is shared with the counties and instead have them split up 23.1 percent of all TAT revenue.

“We’ll rise and fall along with the state,” Caldwell said.

The mayors’ other three priorities are granting county lifeguards limited liability coverage, extending Maui’s deadline for levying a general excise tax surcharge and getting Hawaii County funds for disaster relief.

Minimum Wage

Caldwell is proposing a bill that would allow counties to set their minimum wage higher than the state’s. Starting in 2021, it would also require the Department of Labor and Industrial Relations to set a new state minimum wage each year based on the Consumer Price Index.

The bill would prevent the minimum wage from dropping below any level previously established, should the index drop.

Mayor Kirk Caldwell speaks to joint FInance WAM committee meeting.
Caldwell was the only mayor to speak out in favor of a minimum wage hike Thursday. Cory Lum/Civil Beat

Caldwell acknowledged in written testimony to lawmakers that a minimum wage increase wouldn’t be a magic bullet for Hawaii’s cost of living, but it could be a good step forward.

“I truly believe that we need to at least begin to move forward on how to better improve the financial stability of our residents and local families, many of which are faced with leaving their island home,” he said.

Ige’s minimum wage bill would raise the wage statewide to $15 an hour by 2024. It would attempt to ease the burden on small businesses by giving employers $1 for every hour worked by an employee who is paid minimum wage, up to $50,000 in credits each year.

Reconfiguring Tax Revenue

House Finance Chair Sylvia Luke asked the mayors more than once if they were OK with Ige’s proposal that would remove their guaranteed share of the first $103 million the state collects in TAT revenue and replace it with a pot of money equal to 23.1 percent of total TAT revenue.

The counties’ portion of TAT revenue is currently split up according to this formula: Oahu gets 44.1 percent, Maui County 22.8 percent, Hawaii County 18.6 percent, and Kauai 14.5 percent.

Under Ige’s proposal, that formula would stay the same.

Maui Mayor Mike Victorino speaks to joint WAM Finance committees.
Maui Mayor Mike Victorino agreed with the other mayors supporting a new way of sharing TAT revenue. Cory Lum/Civil Beat/2019

It’s not clear yet if the counties could come out the winners with the change.

Maui’s Victorino said he’s willing to take the gamble.

“It’s like ‘Deal or No Deal,’” Victorino said. “I’ll take the deal and chance it.”

Maui is also looking to get an extension until 2020 on its option of imposing a general excise tax surcharge of up to 0.5 percent. The current deadline to impose a surcharge is in March, and Maui is the only county that hasn’t already done so.

The mayors also took aim at illegal vacation rentals.

Kauai Mayor Derek Kawakami during joint WAM FInance Meeting.
Kauai Mayor Derek Kawakami wants to go after illegal vacation rentals. Cory Lum/Civil Beat/2019

Victorino said he wants to require owners of rental properties to disclose their addresses so they can be tracked.

Kawakami also wants technology that could help the counties flush them out.

“If they’re blatantly disrespecting us at home, the message is clear. The time to cease and desist is now,” Kawakami said. “We’re coming down with a heavy hammer.”

Disaster Relief

In Hawaii County, Mayor Harry Kim wants about $310 million over the next two fiscal years for projects related to disaster relief from the Kilauea eruptions last year.

Kim’s request includes $122 million to replace infrastructure that was damaged or destroyed.

He’s also requesting $110 million for housing projects related to the disaster, $46 million to repair emergency equipment and roads, $20 million for administrative support related to the eruptions, $8 million to implement economic recovery programs, and $4 million for air quality stations and mental health programs.

Mayor Harry Kim makes a point to joint WAM Finance Committees.
Kim is seeking $310 million to help Hawaii County recover from the volcanic eruptions. Cory Lum/Civil Beat/2019

Caldwell said that all the mayors support Kim’s request.

Kawakami asked lawmakers to extend last year’s Act 12, which covered relief for flooding damages on Kauai, to also cover damage caused by Hurricane Lane last August.

Lawmakers provided $100 million to Kauai for flood damage last year. Two bills before lawmakers propose extending the deadline for when Kauai must spend those funds to next year.

The bills would also allow Kauai to invest in projects that could prevent future flood damage from occurring.

“Every mayor and governor, when we get hit by a disaster, we say we will rebuild to what we were before. I’m not sure I’m convinced that that’s necessarily the right thing to do,” Kawakami said. “We would like to see expansion of that use to provide future mitigation efforts, so that if this is the new norm, we can use some of those funds to take preventive action.”

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