County Council Update
Although us Councilmembers are usually focused on the local level, at this time of year it is good to think about State Legislation that will affect our County.
TRANSIENT ACCOMMODATION TAX (TAT): Of importance will be TAT bills that determine what portion of the TAT revenues the Counties will receive. The TAT tax is primarily paid by tourists staying at hotels and other short-term accommodations. TAT revenue is our second highest revenue source after real property taxes.
Originally the Counties received 95 percent of the TAT revenue. Our County’s share really plunged around 2009 with the downturn of the economy when the State Legislature usurped a much larger portion and the Counties’ share dropped to the 20 percentiles with at cap at 103 million. Since 2008, the State’s share has gone up over 2000 percent and the Counties’ share has gone up about 2 percent. If no new legislation is passed, in future years our County’s share would be capped at an even lower figure.
Over the past year the State–County TAT Working Group has been meeting in Honolulu with the assignment of deciding what is the relative burden of visitor related costs on the Counties versus on the State and what should be the appropriate TAT revenue allocation between the State and the Counties. The Working Group is made up of state and county representatives and two public (visitor industry) representatives.
On Oct. 21 the Working Group voted to favor a certain formula. How I describe that formula: heavy bias in favor of the State, but it could have been worse.
The Group’s recommendation would first allocate funds to the following State budget items: the Tourism Special Fund/Hawaii Tourism Authority — $82 million to be annually adjusted by the Consumer Price Index (equals about 20 percent of total revenues); the State Convention Center $26.5 million, the Turtle Bay Easement Fund $1.5 million, and the DLNR Special fund $4 million. Of what remains, the State would receive 65 percent and the Counties 45 percent with no cap. For 2015, it is estimated the Counties portion will be $123 million, of which Hawaii County receives about 18 percent (around $22 million).
At the upcoming Council meeting on Nov. 17, I will discuss the status of this TAT revenue source. Join the conversation; come testify.
THE MARIJUANA DISPENSARY LAW (ACT 241): Also at the Nov. 17 Council meeting, I expect to have several Resolutions relating to the State’s medical marijuana law. Currently, the law will allow two dispensaries on Hawaii Island with a number of production centers. In July 2016, when the law goes into effect, there will begin a substantial additional burden on County services, such as for police and emergency services. For this reason, I would like the State law amended to allow the Counties to charge a 5 percent sales tax on medical marijuana dispensary sales.
Call my office for more information and to get on my email newsletter list by calling 887-2043.