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Bill increasing counties’ hotel tax share advances

    Hotels in Hawaii set records in April for room revenues

State lawmakers are advancing a bill that would increase the portion of hotel taxes that go to Hawaii’s counties.

The annual cap on the counties’ share is $93 million. They want a return to the 44.8 percent rate they received before the cap was imposed in 2011.

The House passed a bill that would return the state to the earlier hotel tax revenue model. The Senate will vote on the bill but is expected to tinker with the details if it passes. The Senate Ways and Means Committee left the percentage blank when it moved the bill forward.

The state’s four counties would make an additional $72 million in annual revenue under the old model, The Maui News reported.

House Speaker Joe Souki, of Wailuku, said the counties are likely to see an increase but a full return to the old rates might take more time.

“It could be phased in,” he told the newspaper.

The Maui County Council passed a resolution April 4 that urged state lawmakers to increase the counties’ share of the tax. It found that while hotel tax revenues in the state have increased by more than $1.6 billion since 2009, a 32 percent jump, the counties’ revenues have fallen or stayed flat. Kauai County’s revenue fell 20 percent in that time, Hawaii County’s fell 14 percent and Maui County’s dropped 4 percent. The haul for the city and county of Honolulu grew by 0.6 percent.

Mike White, the chairman of the Maui County Council’s Budget and Finance Committee, said the counties, more than the state, bear the heavy costs of hosting visitors.

“It is the counties that provide services such as water and sewer, police and fire protection, road improvement, and park development and maintenance — all of which are used to provide visitors with a quality experience,” he said.

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