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Hawaii lawmakers override Gov. David Ige, cut tourism funding

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                                A new law allows each county to impose its own 3% hotel tax on top of the state’s 10.25% hotel tax. Crowds hit the beach Monday in Waikiki.


    A new law allows each county to impose its own 3% hotel tax on top of the state’s 10.25% hotel tax. Crowds hit the beach Monday in Waikiki.

                                <strong>David Ige: </strong>
                                <em>Five of the governor’s vetoes were overridden by lawmakers </em>


    David Ige:

    Five of the governor’s vetoes were overridden by lawmakers

State legislators took out their frustrations about over-tourism by overriding Gov. David Ige’s veto of a bill that puts the fate of the Hawaii Tourism Authority in jeopardy.

House and Senate members voted Tuesday by two-thirds majorities to override Ige’s veto of House Bill 862, while complaining about how tourism is being managed as the islands see a post-COVID-19 visitor surge. The bill, which now becomes law, takes away the HTA’s dedicated funding source and cuts its annual budget to $60 million from $79 million.

Ige had announced his intention to veto 28 bills and ended up vetoing 26 of them by Tuesday’s deadline — both records for his two terms in office.

Legislators in both chambers then took the unusual step of overriding five of Ige’s vetoes. The last time Ige had even one of his vetoes overridden occurred in 2016.

Ige repeatedly said Tuesday that he was willing to work with legislators to address his issues with HB 862.

“I’m very concerned that House Bill 862 as passed would seriously damage HTA’s ability to (operate),” Ige said. “Now, more than ever, we need to strike a balance between a sustainable and respectful visitor industry and mitigating the impacts on our community.”

But neither the House nor Senate was in a mood for compromise.

House Finance Chairwoman Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu) said in voting to override Ige’s veto, “It is really about that discussion about that sustainable tourism and tourism management that we have to start as a body of policymakers who have been elected by our residents to give us that responsibility to do management.”

Luke said one of the Legislature’s responsibilities is charging tourists and having “them pay their share of the resources that they use, and that’s why this bill also allows the counties to increase the TAT (transient accommodations tax or hotel tax) by 3 (percentage points).”

“And, in addition to that, we also raise rental car tax. We allow the (state Department of Land and Natural Resources) to assess fees. We allow DLNR to charge for ocean recreation,” she said. “It’s all part of a sustainable management plan that the Legislature has already started and embodied. HTA will always be our partner, but to rely on HTA to come up with these solutions at some later point is not the right thing. The time has already passed.”

State Rep. Gene Ward (R, Hawaii Kai-Kalama Valley) voted against the override.

He said the bill punishes HTA for successfully bringing back tourism to the islands following the pandemic, which created the worst economy in the country and the nation’s highest unemployment rate.

He called the changes to HTA “a solution in search of a problem we don’t have. … We are burning a bridge before we cross it.”

“Look, HTA is not stupid,” Ward said. “They know what a management plan is, and they know what the will of each of our districts are. They know they’ve got to cut down on this, and to say we have to whip them into shape is inappropriate, untimely.

“Mr. Speaker, I think if we really want to get the ‘champagne (tourists)’ and those who are the ‘quality’ tourists, we’ve got to let HTA do their job and keep our micromanagement out of it.”

The new law also eliminates the $103 million annual county share of revenue from the hotel tax. Instead of sending the money to the counties, the state would keep it. But each county can impose its own 3% hotel tax on top of the state’s 10.25% hotel tax.

Until now the HTA got its budget from a portion of the hotel tax receipts. HB 862 means HTA will no longer have a special tourism fund and will have to seek funding through the Legislature.

In addition to the HTA bill, lawmakers overrode Ige’s vetoes of Senate Bill 263, related to economic development and the “Hawaii Made” program; SB 404, regarding electioneering communication; SB 811, which requires the Department of Education to submit weekly reports of school COVID-19 cases; and SB 1387, regarding pet microchips.

The House and Senate also proposed amendments to three bills in response to Ige’s concerns. Both chambers are scheduled to vote Thursday on all three.

They are:

>> HB 54, which appropriates funds to cover fixed costs and replenish the state’s rainy-day fund. An amended version replaces federal American Rescue Plan Act funds with general funds to ensure compliance with federal rules.

>> HB 1299, which abolishes certain special funds and trust funds and deposits the balances into the general fund. Ige vetoed the measure, saying parts of it were unconstitutional. An amended version of the bill reinstates certain funds, including the Milk Control Special Fund, which was set up to administer the Milk Control Act, a law meant to safeguard the local diary industry from market fluctuations.

>> SB 589, which makes structural changes to the University of Hawaii Cancer Center. An amended version addresses Ige’s concerns about jeopardizing existing contracts and the method of appointing a director.

Ige has repeatedly said that the record number of bills he intended to veto was the result of post-legislative session guidance from the U.S. Treasury restricting how COVID-19 ARPA funds could be used.

On Tuesday, Ige added that previous gloomy economic forecasts from the state Council on Revenues during the COVID-19 era had improved with the resurgence in isle tourism. The council now forecasts a $3 billion bump over the next seven years, putting less pressure on the state budget that legislators passed last session.

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