Committee approves TAT change

HONOLULU — The House Finance Committee passed a bill Thursday that would increase the Transient Accommodations Tax revenues for neighboring islands.

The amended bill provides an additional $36 million to support projects essential or neighbor island residents. Kauai’s share will increase to $24.4 million from $14.9 million. Paid by hotel guests to the state, the TAT is allocated to several groups including Hawaii’s counties, to pay for visitor-related expenses.

“This increase in the TAT share for neighbor islands will help us deal with tourism impacts such as paying for police, firefighters, parks and other infrastructure,” said Rep. Nadine Nakamura.

The passage of the bill, said Rep. Dee Morikawa, is a fair solution to sharing the TAT, because now, it’s up to the counties to decide how to use TAT revenues in order to benefit both residents and visitors.

“With record numbers of visitors coming to Hawaii every year, we need to make sure our infrastructure is properly functioning,” Morikawa said. “That when a visitor goes for a drive around the island or visits a beach park it is well maintained and makes them want to return to Hawaii.”

The TAT increase, she said, will assist counties in doing this.

Maui’s TAT revenues will increase from $23.5 million to $38.3 million and Hawaii Island’s will increase from $19.2 million to $31.3 million. For the City and County of Honolulu, the TAT amount is unchanged, for a total of $45.4 million per year.

House Speaker Scott Saiki credited Neighbor Island representatives with finding ways to provide more funding.

“This bill is a product of their discussions,” Saiki said. “During the special session last summer, our neighbor island representatives were concerned about the need to increase the counties’ share of the TAT.”

The bill, he said, will provide much needed financial support to Neighbor Islands.

“I want to thank all my colleagues for listening to the concerns raised by Neighbor Island representatives and making the TAT more equitable,” Nakamura said.

“It passed and that’s a good thing,” said Kauai County Council Chair Mel Rapozo.

Rapozo said there was some language in the original bill that allocated the TAT revenue for specific purposes, but the House Finance Committee amended the language to free up the use of the funds for the Neighbor Islands, he said.

House Majority Leader Rep. Della Au Belatti says she believes the measure will pass the full House, and members knew they had to address the issue after the state last year increased the statewide transient accommodations tax to help pay for Oahu’s rail line.

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The Associated Press contributed to this story.