For Immediate Release:
April 25, 2014
Press Release by:
Gladys C. Baisa, Chair
Maui County Council
Legislators increase TAT cap by $10 million
HONOLULU, Hawaii – A joint House-Senate conference committee passed House Bill 1671 moments before a 6 p.m. deadline, which will raise the cap of counties’ share of transient accommodations tax revenues from $93 million to $103 million, Council Chair Gladys C. Baisa announced today.
Councilmember Michael P. Victorino, who was at the Capitol throughout the day, delivered the news to Chair Baisa after anxiously waiting for state legislators to make a decision. The conference committee met at 5:50 p.m. and announced the $10 million increase in the cap for fiscal year 2015, and an additional $10 million in fiscal year 2016.
“It was disappointing the cap was not lifted entirely, but I am grateful to the committee for listening and returning much needed monies to the counties,” Victorino said.
The estimated TAT collection in 2013 for the 9.25 percent tax line in hotel receipts is $368.6 million. To address the economic downturn, counties had to share a capped amount of $93 million to enhance visitor experience such as road and park improvements, public safety and sanitation services.
“Although we need a lot more, it’s a step in the right direction.” Baisa said. “The extra funds will be a tremendous help to the counties, but now we need to carefully scrutinize our budget to try to minimize the impact on our residents.”
The joint committee did not reinstate the prior state policy of returning 44.8 percent of TAT revenues to the counties, which would have been an additional $72 million in counties’ books.
Based on current projections, instead of $21.2 million, Maui County may now receive $23.5 million in 2015 and $25.8 million in 2016.
“That’s still money we didn’t have before, we’ll take it.” Baisa said. “However, receiving less than what we had asked for may result in a larger burden on county taxpayers.”
Baisa said House Rep. Tom Brower considered a phase-out plan for the removal of the cap and requested the counties to submit a proposal while the bill’s fate was being decided.
Baisa thanked Councilmember Mike White, Budget and Finance Committee chair, for crunching numbers to address the request amidst the peak of budget session.
Previously, the Maui County Council adopted Resolution 14-45, introduced by White, urging the state legislature to pass HB 1671. In an earlier release, White noted the state’s annual tax revenues have increased more than $1.6 billion since 2009, while neighbor island county revenues were down.
Baisa said the bill received strong opposition from state administrators, which may have affected the outcome.
“The TAT revenue benefits the same constituents the state and the counties serve,” Baisa added. “It is not about the state losing revenue, it’s returning a fair share of the distribution to the counties.”
Baisa considers the endeavor a success and attributed the unified efforts of county officials and strong lobbying by the four council chairs, who at a historic meeting in February, were all present at the State Capitol to support lifting the TAT cap.
Baisa shares the victory with her colleagues and the mayor, who submitted numerous testimonies urging legislators to pass the bill.
“We didn’t exactly get what we asked for but we’re grateful,” Baisa said. “I look forward to continuing the dialogue at next year’s legislative session.”
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