{"id":9885,"date":"2021-12-18T02:58:45","date_gmt":"2021-12-18T12:58:45","guid":{"rendered":"http:\/\/thefilipinochronicle.com\/backup\/?p=9885"},"modified":"2021-12-28T22:08:18","modified_gmt":"2021-12-29T08:08:18","slug":"tourist-tax-surcharges-threaten-hawaii-recovery","status":"publish","type":"post","link":"https:\/\/thefilipinochronicle.com\/backup\/2021\/12\/18\/tourist-tax-surcharges-threaten-hawaii-recovery\/","title":{"rendered":"\u2018Tourist Tax\u2019 Surcharges Threaten Hawaii Recovery\u203a"},"content":{"rendered":"\n
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by Joe Kent<\/em>

<\/strong>Are more taxes on tourists really what Hawaii\u2019s economy needs right now?

Honolulu, Maui and Kauai counties recently added 3% surcharges to the state\u2019s 10.25% transient accommodations tax (TAT), and Hawaii County is expected to follow soon<\/a>.

That will have tourists looking at 13.25% of their visitor accommodations expenses going toward taxes.

Combined with the state\u2019s general excise tax of 4%, plus the 0.5% county GET surcharges on Kauai, Oahu and Hawaii island, which tourists also pay, the Aloha State now has the highest tourist taxes in the nation, topping out at 17.75%.<\/a>

<\/strong>All this comes at a time when Hawaii\u2019s economy, especially its tourism sector, is struggling to survive \u2014 even after the state was granted billions of dollars in federal aid, which should have relieved the state and counties of the need for more taxes.

So how did this all come about?

Well, for one, there was the Great Lockdown Crash of 2020, which wrecked Hawaii\u2019s economy and left state lawmakers wondering in early 2021 how they were going to make up for the resulting loss of tax revenues.

One thing they decided was to stop giving the counties their usual $103 million share of the state\u2019s TAT revenues. This left Honolulu County short $45 million; Maui County, $23 million; Kauai County, $14 million; and Hawaii County, $19 million.

As a concession, the lawmakers allowed the counties to impose their own TATs, up to 3%, which by now they almost all have.

But lo and behold, it turns out the state\u2019s TAT grab wasn\u2019t necessary after all, since the federal government had already infused at least $1.6 billion from the American Rescue Plan Act into Hawaii\u2019s economy, and since then has allocated an additional $2.8 billion as part of the recently approved infrastructure bill<\/a>.

Meanwhile, it turns out the counties are not doing so badly financially, either. From fiscal 2019 to fiscal 2022, operating revenues grew in Honolulu County by 12%, Kauai County by 11%, Maui County by 14% and Hawaii County by 18%.

That revenue growth occurred despite the counties already operating without any TAT revenues since April 25, 2020, when Gov. David Ige snatched the money for the state via one of his many COVID-19 emergency proclamations<\/a>.

Of course, county lawmakers still say they \u201cneed\u201d the 3% TAT surcharge<\/a>.\u00a0Honolulu County stands to gain $86 million; Kauai County, $18 million; Maui County, $15 million; and Hawaii County, $19 million.

But their new TATs will come at a high price. And it won\u2019t be for just tourists. Locals traveling to neighboring islands, whether on vacation or for business, will now have to pay more for lodging, which will raise the cost of living and the cost of doing business in the islands.

Similarly, more money spent by locals and tourists on lodging taxes will leave them with less money to spend on other Hawaii products. The higher taxes might even discourage them from staying at Hawaii hotels altogether.

Sadly, some of the money that is being siphoned away from Hawaii\u2019s private economy will help support government bloat. Honolulu County, in particular, intends to initially divert one-third, and after two years, one-half, of its new TAT revenues to its wildly over-budget and behind-schedule rail project. This seemingly endless boondoggle \u2014 the most expensive megaproject per capita in the world<\/a> \u2014 will receive between $28 million to $49 million annually from the new tax, despite widespread agreement that it will hardly make a dent in its $2 billion to $3.5 billion budget shortfall.

This is money that could have remained in the hands of tourists to spend in the private sector, helping businesses and their employees recover and prosper, and boosting Hawaii\u2019s overall economy. Instead, Honolulu is going to squander its new revenue source on a project that has devolved into an enormous blunder.

<\/strong>In their zeal to \u201csave\u201d the state budget, Hawaii\u2019s lawmakers created new monsters \u2014 the county TAT surcharges \u2014 which threatens to drag down Hawaii\u2019s economy in perpetuity.

Considering that the state TAT started out in 1987 at 5% and was supposed to be only temporary, our state lawmakers have a lot to answer for, especially now that the tax has grown to 10.25% and has spawned mini-TATs as well. If only they could undo it all, Hawaii\u2019s economy would be the better for it.

JOE KENT<\/strong> is executive vice president of the Grassroot Institute of Hawaii.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

by Joe Kent Are more taxes on tourists really what Hawaii\u2019s economy needs right now?…<\/p>\n","protected":false},"author":1,"featured_media":9882,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","_links_to":"","_links_to_target":""},"categories":[41],"tags":[],"featured_image_urls":{"full":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=1000%2C600&ssl=1",1000,600,false],"thumbnail":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=150%2C150&ssl=1",150,150,true],"medium":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=300%2C180&ssl=1",300,180,true],"medium_large":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=640%2C384&ssl=1",640,384,true],"large":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=640%2C384&ssl=1",640,384,true],"1536x1536":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=1000%2C600&ssl=1",1000,600,true],"2048x2048":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=1000%2C600&ssl=1",1000,600,true],"ultp_layout_landscape_large":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=1000%2C600&ssl=1",1000,600,true],"ultp_layout_landscape":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=870%2C570&ssl=1",870,570,true],"ultp_layout_portrait":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=600%2C600&ssl=1",600,600,true],"ultp_layout_square":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=600%2C600&ssl=1",600,600,true],"covernews-slider-full":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=1000%2C600&ssl=1",1000,600,true],"covernews-slider-center":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=780%2C500&ssl=1",780,500,true],"covernews-featured":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=1000%2C600&ssl=1",1000,600,true],"covernews-medium":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=540%2C285&ssl=1",540,285,true],"covernews-medium-square":["https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?resize=375%2C250&ssl=1",375,250,true]},"author_info":{"info":["admin"]},"category_info":"Open Forum<\/a>","tag_info":"Open Forum","comment_count":"0","jetpack_featured_media_url":"https:\/\/i1.wp.com\/thefilipinochronicle.com\/backup\/wp-content\/uploads\/2021\/12\/tax-picture-id1216655370.jpg?fit=1000%2C600&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/posts\/9885"}],"collection":[{"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/comments?post=9885"}],"version-history":[{"count":2,"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/posts\/9885\/revisions"}],"predecessor-version":[{"id":10049,"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/posts\/9885\/revisions\/10049"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/media\/9882"}],"wp:attachment":[{"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/media?parent=9885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/categories?post=9885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thefilipinochronicle.com\/backup\/wp-json\/wp\/v2\/tags?post=9885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}