TAT raid seen as going nowhere

Tsutsui says he's been told support lacking as key deadline approaches

The Maui News
Friday, May 1, 2009

By CHRIS HAMILTON, Staff Writer

WAILUKU - An attempt to raid the transient accommodations tax to help balance the state's budget very likely isn't going anywhere, Central Maui state Sen. Shan Tsutsui said Thursday.

"At this point, I don't anticipate seeing the TAT bill moving forward," said Tsutsui, a Democrat and vice chairman of the Senate Ways and Means Committee, who noted that the final deadline for bills to continue to a floor vote is 6 p.m. today.

A budget-balancing proposal by House Speaker Calvin Say for the TAT, or the hotel tax as it's commonly known, would have taken away $18 million in revenue from Maui County's 2010 fiscal year budget. In anticipation of not having the money, County Council members have been scrambling to raise fees and utility rates as well as freeze hiring and eliminate road paving along with other spending cutbacks.

Tsutsui's prediction that the hotel tax money for the counties would be untouched coincidentally came on the day Maui County Council Chairman Danny Mateo announced that he and Council Member Joe Pontanilla would be making one last pilgrimage to Honolulu today to try to persuade state lawmakers not to reroute the hotel tax into state coffers.

Over the next two fiscal years, the state expects to have $2 billion less to work with due to the ongoing recession and downturn in tourism. One way Oahu Democratic leaders proposed trying to fill the hole was by taking hotel room tax money away from all the counties.

The state House and Senate have already passed versions of the hotel tax bill and will meet today at 2:45 p.m. for the fifth conference committee on the measure. Tsutsui said that despite all the meetings, he hasn't seen any compromise language from conference committee House members, who are all from Oahu, or a reduction in the amount that would be removed.

For the past two months, a host of Neighbor Island politicians, including Mateo and Mayor Charmaine Tavares, have been making regular lobbying trips to the state Capitol. They all say the loss of hotel tax revenue would gut the counties' already-hurting budgets.

However, Tsutsui said the majority of those named to the Senate conference committee, including Maui Sen. J. Kalani English, are from the Neighbor Islands. And they've all told him that they'll be voting down the measure.

Tsutsui reiterated what some members of the Maui legislative delegation have said for the past few weeks: They didn't believe that Say, who introduced HB 1744, could rally enough support for the idea. For the bill to become law, both chambers would still need it to pass a final floor vote before the session's Thursday adjournment.

For her part, Republican Gov. Linda Lingle has said she doesn't support raiding the hotel tax. She also has pledged a veto, her spokesman Russell Pang said Thursday.

Without support of the Neighbor Island lawmakers and Oahu Republicans, even if the TAT takeaway passed the Legislature, Maui legislators doubted the Oahu Democrats would have enough votes to override the governor's veto.

Lingle has been clear that she will veto any bill that raises taxes, particularly for tourists since Hawaii already is mired in a deep tourism slump.

Proponents of HB 1744 said the bill would give the counties the ability to make up for the loss of the hotel tax by allowing them to create a surcharge on hotel stays of up to 5 percent.

However, some politicians don't like the surcharge, claiming it's just a furtive way for lawmakers in Honolulu to pass the buck on raising taxes.

The counties were given the hotel tax money in the 1990s to help pay for upkeep of parks that the state had handed over to the counties. Neighbor Island elected officials said the hotel tax is a crucial part of not only maintaining parks, but also roads and water infrastructure as well as police and fire services used by tourists.

"This legislation (HB 1744) would unfairly and unwisely eliminate major funding to the counties at a time when we are addressing an economic downturn and corresponding loss of revenue in all of our major funding sources," Mateo wrote in an e-mail to the entire legislative body.

A palatable solution to the state's woes is still in the works.

Another House-Senate conference committee has been negotiating the state budget bill. Legislators might cut or reduce some state services as well as lay off state workers. They've also been looking at increasing taxes and fees through separate legislation such as HB 1744.

Meanwhile, Lingle said she wants to balance the state budget without layoffs or tax hikes but has asked for contract concessions from state workers.

* Chris Hamilton can be reached at chamilton@mauinews.com.

Original article URL: http://www.mauinews.com/page/content.detail/id/517999.html

Return to Sen. English Home Page - KalaniEnglish.com

 

 

 

 

 

 

Home Bills and Resolutions About Senator English Committees Community Profiles Newsletter Archive News Archive Capitol Web Site Media Photos

Connect with Senator English

OUR DISTRICT