A Hawaii lawmaker says visitors will just have to “pay more” if they want to visit the islands after the state legislature voted on measures that would hike rental car taxes and change hotel rules that will likely lead to higher fees. “If (people) want to visit Hawaii, that’s going to be the bottom line,” stated House Speaker Scott Saiki.
State lawmakers recently wrapped up a legislative session marked by a generous influx of federal aid to help the islands weather a pandemic that threw tens of thousands of people out of work and upended the state’s tourism-dependent economy. However, the session also saw elected officials approve measures that would have tourists shoulder more of the state’s tax burden.
That includes hiking the rental car tax but also reallocating about US$100 million earned through the state’s Transient Accommodations Tax from the counties to general funds and at the same time giving the districts authority to introduce their own tax of up to 3% on top of the existing 10.25% fee.
The bill also removes some funding for the Hawaii Tourism Authority.
While some lawmakers were worried the changes would lower revenues for individual counties, others said the moves are a way for the state to change its reliance on the tourism industry.
“If you ask my constituents, they would tell you that we brought too many people who on average were not spending enough money per person,” said Oahu Rep. Sean Quinlan. “So, the impacts of the visitor industry have started to outweigh the benefits in many parts of Hawaii.”
Pearl Harbor Rep. Sonny Ganaden said the state should limit taxpayer dollars sent to the tourism industry. “This bill represents a test – a test as to whether or not trickle-down economics works in real time,” he said, adding that he hopes taxpayer dollars will be spent on improving the lives of residents instead of on public relations for tourism.
Others saw problems with the bill.
“We wanted the community to be uniform in terms of Safe Travels Hawaii, and now we’re going to have different kind of taxes on different hotels on different islands,” Rep. Gene Ward said. “I have serious doubts that this policy will ever reach anything good.”
Speaker Saiki predicted tourists will continue to travel to Hawaii because it is one of the safest places for people to visit and because international travel is almost at a standstill during the pandemic. Many countries aren’t admitting American tourists, so US travellers don’t have as many options for places to go.
The bill, which passed final readings in both the House and Senate now goes to the governor, who has until June 21 to announce what bills he intends to veto.