Hawaii lawmakers overturn Ige’s veto on tourism finance bill

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HONOLULU – Hawaii lawmakers on Tuesday overturned Governor David Ige’s veto on a bill that revises the way the state funds the Hawaii Tourism Authority and allocates tourism tax revenues to counties.

The bill would stop funding the tourism agency with money collected by the transitional accommodation tax on hotel stays and other short-term rentals. Instead, lawmakers intend to pay for the agency with money from the general fund, although for the current fiscal year they have appropriated federal coronavirus relief funds.

In addition, instead of providing the four main counties in the state with a share of the tax revenue relating to temporary accommodation, the legislation gives the counties the power to collect their own surcharge on the tax. Currently, the state imposes a uniform hotel tax rate on all islands.

The House voted 38 in favor of the waiver, with eight against and four members excused. The Senate voted 17 in favor of the exemption and eight against.

Senator Bennette Misalucha, deputy chair of the Senate Committee on Energy, Economic Development and Tourism, said special funds should not be protected for the benefit of a single industry. She said the legislature has brought special funds like hotel tax revenue into the general fund to stop this practice.

The Hawaii Tourism Authority will now need to get the backing of lawmakers for its budget, as will other state agencies, she said. This will require the agency to be more open with its strategic plans and force more communication between the agency and lawmakers, she said.

“It’s part of the checks and balances of state government,” Misalucha, a Democrat, said before senators voted on.

Ige, also a Democrat, said he was concerned the measure would damage the agency’s ability to go beyond marketing Hawaii to travelers to better manage tourists who come to the islands.

“There really isn’t any other state agency that is able to identify hot spots in every community, work with county and state, as well as individuals in the private sector, to really identify solutions and hopefully be able to fund them – at least on a pilot basis – so that we can determine and mitigate the impact of visitors who come here, ”said Ige.

He said funding the tourism authority with federal coronavirus relief funds would hamper the agency, as that money comes with reporting requirements and extended mandates to adhere to strict sourcing procedures. The governor said it would interfere with the agency’s advertising and its funding programs for the Merrie Monarch hula festival and other events.

Yet Ige also told reporters before lawmakers voted that he was ready to execute what the legislature passed.

Representative Sylvia Luke, chair of the House finance committee, said the bill was a way for the state to start better managing tourism. She said the measure had done so in part by allowing the Ministry of Lands and Natural Resources to charge a fee to tourists to access popular parks.

The Democrat said lawmakers couldn’t just rely on the Hawaii Tourism Authority to manage tourism at some point in the future, but had to step in and get involved themselves.

“It is a bill to do it now,” she said during the debate in the House.

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This story has been corrected to show that the Hawaii Tourism Authority will be funded by federal coronavirus relief funds in the current fiscal year, instead of money from the general state fund.


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