The Hawaii Tourism Authority’s future is uncertain again.
Gov. David Ige has announced his intent to veto House Bill 1147 — the eleventh-hour solution that state legislators cobbled together at the end of the session to save the agency’s $60 million annual budget.
Ige said he intends to use federal funding to make HTA whole this year. However, if he vetoes the bill, HTA’s budget is no longer recurring, which means that it has to seek funding from a sometimes hostile Legislature from year to year.
HB 1147 originally started out as a capital improvements project bill in 2021, but this year lawmakers removed the projects and replaced them with operating appropriations for HTA, the Hawai‘i Convention Center special fund, the State Office of Planning and Sustainable Development, and the University of Hawaii. The move was done without public input.
The measure, which switched the source of HTA’s $60 million budget to general funds, also set an additional $28.5 million expenditure ceiling for the Hawai‘i Convention Center’s enterprise special fund.
Ige, who has until July 12 to veto bills, said in a statement Monday: “The amendment of the bill in conference could be subject to constitutional challenge for making a non-germane amendment to the bill (‘gut and replace’) without allowing an opportunity for the Legislature or the public to sufficiently consider the bill.
“Because the bill provides needed funding for Hawaii Tourism Authority, I am looking at other ways we can continue to support HTA operations without the risk of a court challenge.”
On Tuesday, Ige elaborated in an interview that he intends to make line-item vetoes in the state budget bill that strike out federal spending for other things to free up $88.5 million for HTA and the convention center.
HTA President and CEO John De Fries said in a statement: “We appreciate the Legislature’s intent to provide funding to HTA through HB1147 and we also understand the governor’s consideration of a veto based on guidance from the Attorney General.
“We will be conferring with legislative leadership and maintaining communication with the Governor’s Office on an alternative funding source to support HTA’s operations and comprehensive destination management and marketing efforts.”
House Finance Chair Sylvia Luke, one of the architects of the amended HB 1147, told the Honolulu Star-Advertiser that it might be problematic if Ige intends to fund HTA with American Rescue Plan Act federal funds “only because one of the things that we wanted to do was to allow for continued recurring funding for HTA, and the federal funds would only be allowed for a specific amount of time.”
This latest wrinkle potentially could exacerbate HTA’s already complicated state procurement for its largest U.S. tourism contract, which has entered a protest period. Federal funding and state funding have different usage requirements and deadlines.
Luke said she expects that there will be some conversation between the administration and legislators, who she said crafted the bill in close contact with the Attorney General’s Office and the Budget Office.
“Many times the governor puts a bill on the intent to veto list and ultimately it may not get vetoed,” Luke said. “Courts have always looked at budget bills very differently. We considered this a supplementary budget bill in addition to the overall budget bill that we passed.”
Ige said he encourages lawmakers to go along with his intended budgetary funding shift, as opposed to overriding a veto of the supplementary budget bill or convening a special session to appropriate funds for HTA and the convention center with public hearings on the measure.
As it is, HB 1147 in Ige’s view is “clearly defective” given that the main content of the bill, introduced in 2021, was removed and replaced April 29 by a House-Senate conference committee with no public input six days before the end of this year’s legislative session.
Such a change, Ige said, runs afoul of a December Hawaii Supreme Court decision in a gut-and-replace lawsuit initiated and won by the League of Women Voters of Honolulu and Common Cause Hawaii.
“As much as I supported HB 1147, I felt that it was clearly a violation of the League of Women Voters case,” he said. “I think it’s a pretty slam dunk that if someone sued we would lose.”
Keli‘i Akina, president and CEO of the Grassroot Institute of Hawaii, said, “This bill has ‘lawsuit’ written all over it. I commend Gov. Ige for vetoing this bill, which was illegally gutted and replaced.”
“Beyond that, there is no need to fund the Hawaii Tourism Authority at all, since the industry is more than capable of paying for its own marketing. Gov. Ige should remove the funding entirely.”
While Akina’s defunding view is not widely shared in the state Legislature, HTA has certainly faced criticism that has resulted in budgetary losses.
Lawmakers trimmed HTA’s budget in 2018. Then, in 2021, HTA experienced major changes after legislators overrode Ige’s veto of House Bill 862, which took away the tourism agency’s dedicated funding source and cut its annual budget to $60 million from $79 million.
State funding for HTA remained in limbo for much of this year’s legislative session, too.
House and Senate conferees left HTA funding out of the final version of the state’s $17 billion supplemental budget, and legislative conflict over alternative bills put the agency’s financial outlook in jeopardy.
Before signing off on the final draft of HB 1147, the Senate had favored House Bill 1785, which would have reorganized HTA. The House had favored Senate Bill 775, which funded HTA without strings but sought to create an additional agency, a “Natural Resource Management Commission,” with an appropriation of $30 million.
Lawmakers instead amended HB 1147 after the deadline for fiscal bills.
Correction: An earlier version of this story incorrectly used the previous version of the State Office of Planning and Sustainable Development’s name.
