The political implications of actually getting what you ask for are on display with the Legislature passing House Bill 862, which gives the counties the ability to raise their own hotel room tax of up to 3%.
If Gov. David Ige signs the bill into law, it will go into effect at the start of the new year, meaning the counties would have to figure out what to do fairly quickly.
In politics, nothing comes to you without a tradeoff, so if the counties get the power to tax tourists, something that they have spent decades asking for, they are going to have to do it on their own.
In other words, according to the proposed law, the counties will not get both their own newly collected hotel room tax plus a piece of the state hotel room tax.
According to the report filed by Allison Schaefers for the Honolulu Star-Advertiser, the bill allows each county to add its own 3% to the state’s current hotel tax of 10.25%, for up to 10 years.
In the past, the state gave $103 million to the counties as the annual county share of revenue from the hotel tax, also called the transient accommodations tax (TAT).
And yes, the state now would get to keep that $103 million to help with the budget deficit.
As a side note, the state also can now afford to give public school teachers $2,200 payments for the purpose of “workforce stabilization to retain teachers,” while setting aside stimulus funds to assure shortage differentials continue next school year and more classrooms receive air conditioning.
Hotels and businesses, please note that when you can organize your rank-and-file and turn out 30,000 well-educated, hard-working members who will stand on street corners waving signs, go to rallies and organize drives for friendly politicians and do it rain or shine for months twice every two years, like the teachers can, then maybe the Legislature will drop two-grand love notes on you, too.
Back to the hotel room tax: Last month, state Rep. Sylvia Luke, finance chairwoman, pointed out that the bill would get the counties to hold bed-and-breakfast homes more accountable and enforce rules covering bed-and-breakfast homes. The counties can charge for permits or licensing for vacation rentals.
Keith Vieira, principal of KV &Associates Hospitality Consulting, said in news reports that the visitor industry does not welcome the change, claiming that the proposed increase translates into visitors being charged 18% in general excise and TAT taxes per night on their hotel rooms and resort fees.
So far there is no unified position from the four counties. Maui’s Mayor Mike Victorino said he would raise the hotel taxes, the Big Island is asking Ige to veto, and Honolulu and Kauai have not come up with definitive positions.
The counties are learning the lesson that not only should there be representation with taxation, there should be responsibility and accountability — as in, if you want the money, stand up and ask for it.
Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.