More than 30 Hawaii tourism and business associations have signed a letter to Gov. David Ige, urging him to veto a bill that would significantly reduce funding for the Hawaii Tourism Authority.

The bill, which is awaiting Ige’s signature, would reduce the authority’s funding to $60 million from about $80 million for the next fiscal year.

More significantly, for future years, the measure eliminates a special fund that allows the HTA to sidestep the Legislature’s normal budget process and instead receive money directly from Hawaii’s hotel room tax.

HTA primarily markets Hawaii as a tourist destination; however, it recently has started crafting major, island-specific plans to manage tourism to create a better experience for residents as well as visitors.

But lawmakers seeking to change the authority’s funding have said other state agencies, like the Department of Land and Natural Resources, are already tasked with managing the effects of tourism, and that $60 million is plenty for HTA to steer toward the state’s marketing effort.

Crowds gather at San Souci State Recreational Park near Waikiki Beach on a sunday during COVID-19 pandemic. April 9, 2021
With tourists finally coming back to Hawaii, including places like San Souci State Recreational Park near Waikiki Beach, now is not the time to reduce the Hawaii Tourism Authority’s budget, business groups say. Cory Lum/Civil Beat/2021

But the tourism and business organizations disagree. They say that with tourism – and the economy in general – still recovering from the COVID-19 economic crisis, now is not the time to cut HTA’s money.

“As we can all agree, destination marketing will play an outsize role in determining how long it takes for our economy to rebound,” said the letter, which was sent by the Hawaii Lodging and Tourism Association. “The marketing campaigns created by HTA are often ideated and executed far in advance and curtailing their funding now and requiring them to seek said funding from the State’s general fund each year would hinder the agency’s flexibility and capability in this realm.”

The bill also would cut a guaranteed stream of hotel tax money to the counties but let the counties impose a 3% county hotel room tax to make up for the lost state tax money. The associations said this would be a bad move, hurting county coffers when they need revenue and forcing them to impose a tax that would make Hawaii a more expensive place to visit.

“A 3% room tax by the counties would effectively create a 30% increase to the existing TAT,” said the letter. “This increase would give Hawai‘i the highest lodging tax rate across the country. Hawai‘i is already one of the costliest places to visit for a variety of other reasons including our geographic location and fees related to COVID-19 mitigation efforts.”

Although drafted by the hotel association’s chief executive, former Honolulu Mayor Mufi Hannemann, the letter was signed by representatives from a total of 31 different business groups, including the Chamber of Commerce Hawaii, the Chinese Chamber of Commerce Hawaii, the Hawaii Restaurant Association and Retail Merchants of Hawaii.

Cindy McMillan, a spokeswoman for Ige, said all bills are now undergoing legal, policy and budgetary review and that the governor has until June 21 to say which ones he plans to veto. In the meantime, she encouraged people to submit public comments.

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