HTA must open financial books

Hawaii tourism is an industry, indisputably part of the private sector, with businesses competing for their share of the marketplace. But it’s also the foundational element of the state’s economy, in which the public has invested heavily.

And that means the taxpayers, who have contributed millions toward bolstering the state’s economic engine, own a piece of it. They deserve to know how their money is being spent.

That does not seem to be the assumption of the Hawaii Tourism Authority, which has been less than forthcoming with information offered to the public’s elected representatives.

And this week, members of one state Senate panel rightfully sounded the alarm over what they described as an opaque agency whose financial reporting has been woefully short of details. The situation is all the more woeful for the fact that the authority is publicly funded.

The Senate Ways and Means Committee delivered a smackdown of the HTA for its failure to submit a budget with meaningful information: It lacked breakdowns for individual programs.

Further, legislators noted at the Tuesday pre-session briefing, the agency gave no rationale for why it budgeted $93.2 million for the past year and $89.9 million in 2017. That’s far more than what’s allotted annually: $82 million from the tourism special funds.

This, lawmakers charged, seemed inexplicable given that it’s happening during a red-hot visitor market. According to the HTA annual report, tourism experienced in 2016 the fifth consecutive year of record-breaking growth.

Finally, they wondered why HTA is remitting to the state only $20 million of the $26.4 million yearly internal debt service on the Hawai‘i Convention Center.

State Sen. Jill Tokuda, who chairs Ways and Means, has ordered HTA officials to deliver four years’ worth of actual spending and actual revenue — data that she said the Legislature has not received previously.

And it’s not that the lawmakers haven’t tried. Ways and Means member and Tourism Committee Chairman Sen. Glenn Wakai requested budget worksheets Dec. 6, and when they weren’t immediately delivered, he made a formal open-records request. That was denied, citing the need to protect “proprietary information” and “competitive advantage.”

It’s appalling that HTA takes this stance. As Wakai told the Star-Advertiser before the briefing, the law requires disclosure to lawmakers, and any proprietary business information the documents contain, he can protect.

Part of the problem is that the agency seemingly is adopting the perspective of a private entity itself. George Szigeti, the authority’s president and chief executive officer, said he sees the requested documents as “proprietary” and withheld it with HTA board approval.

“No CEO would give the road map of their company’s success to their competitor,” he said. “We are competing against other countries that want our business. We don’t tell them what we do.”

But the HTA is not a company entitled to take this attitude. It is a state agency, with a duty to public accountability.

To that point, the Legislature has some rational concern about HTA sustainability. Chief Operating Officer Randy Baldemor said excess spending was covered with unspent marketing funds from prior years. There’s also a $14 million reserve fund he said is adequate, but at this rate, that wouldn’t last long if there’s a downturn.

These are worrisome trends, especially at a time when the tourism market is changing. Hawaii is bringing in more than 8 million visitors, but their needs and spending habits are changing.

Hawaii needs to prepare adequately to serve this market, which requires information. The Legislature convenes next week, and that would be a fine time for the HTA to start shedding its tendency toward secrecy.