Citing the need to raise money "to address the homeless situation in Waikiki," Mayor Kirk Caldwell is making a last-minute push for City Council members to increase proposed property tax rates on hotel and resort owners further.
Hotel and resort property owners now pay taxes at a rate of $12.40 for every $1,000 of value, and Caldwell’s budget package in March sought to raise that to $13.40 per $1,000. But after Waikiki hoteliers voiced concerns that they were being hit with a new and unfair burden just as their industry was hitting an economic soft spot, the Council Budget Committee voted earlier this month to raise the hotel/resort rate by only 50 cents, to $12.90.
With a final vote on a city budget package scheduled for June 4, Caldwell sent a memo to Council Chairman Ernie Martin and Budget Chairwoman Ann Kobayashi asking that they take another look at the $13.40 rate.
"I request your thoughtful consideration of this proposal so that we may together address the growing homeless situation in Waikiki," Caldwell said Wednesday in the memo.
The added 50-cent increase would generate an additional $4.1 million for the city’s coffers, city officials project.
Caldwell said $2 million of that would go to the Waikiki Business Improvement District for rental unit vouchers that could give shelter to homeless individuals and families.
Nearly $900,000 would go to the district for grants to nonprofits that provide outreach and other services for Waikiki’s homeless, while $750,000 would go to additional efforts of ridding the sidewalks of items left there by the homeless and others, the memo said.
Additionally, the memo says $250,000 would go to the district for more frequent cleaning of sidewalks, bathrooms and other public areas, while $200,000 would go to increased security patrols conducted by the district.
Kobayashi, who was on the mainland Friday, said she had not seen the memo, but had been told the gist of its contents.
Kobayashi said she was not inclined to support Caldwell’s request, adding that she wants to see whether hotel industry leaders will support it after already testifying against it.
It’s too late for the matter to be discussed at Wednesday’s Budget Committee meeting because the committee already voted to send the tax rate resolution to the full Council for final approval, she said.
The Council’s tentative approval of a 50-cent hike for the hotel/resort tax rate is already a reasonable compromise between the mayor’s position and that of the hoteliers, she said.
"It’s not like we eliminated (the increase) completely."
Hotel and resort owners pointed out that aside from a new Residential A category aimed at out-of-state investors, all other tax categories are proposed to stay the same.
As for what is being proposed to help solve the homeless situation, Kobayashi said that Waikiki-area Councilman Stanley Chang is working with the developer of an Ala Wai-area rental housing project who is willing to set aside between 12 and 24 units for the homeless for between $2 million and $4 million.
That money is coming out of $18.9 million Caldwell had set aside for his Housing First program designed to help homeless individuals and families across the island, a second major point of contention between the mayor and the Council this budget season.
Efforts Friday to contact Waikiki hotel industry leaders for comment on Caldwell’s last-minute lobbying were unsuccessful.
Jesse Broder Van Dyke, a spokesman for Caldwell, said the administration has reached out to industry leaders with its latest plan.
"We’ve had varied responses," he said.
Addressing homeless issues has been a key priority for Waikiki hotel officials, Broder Van Dyke said. One reason there is a push for more tourism-related funding now is because the Legislature did not give Honolulu and the other counties as large a share of hotel room tax revenues as they’d sought, he said.
