The embattled Hawai‘i Tourism Authority said state lawmakers could cost the state millions of dollars in federal funding, halt destination management efforts and put community programs at risk if they continue down a path of repealing the agency or funding it through a budget bill that cuts the agency’s funding request by more than half.
HTA President and CEO John De Fries and other members of HTA’s top leadership team made these points Wednesday during a news conference to detail unintended consequences and community concerns in advance of conference committee meetings between the state’s Senate and House to review Senate Bill 1522 and House Bill 1375, which in their current forms would take effect July 1.
HB 1375, introduced by Rep. Sean Quinlan (D, Waialua-Kahuku-Waiahole) and other House members, in its current form provides a $60 million appropriation to establish an Office of Tourism and Destination Management within the Department of Business, Economic Development and Tourism. It adds destination management jobs. The new agency would be governed by a nine-member board and an executive director. It also provides a $64 million appropriation to the Hawai‘i Convention Center to fund repairs for its leaky rooftop, which was leaking so bad after rain on Wednesday that HTA had to change its meeting room.
The current version of SB 1522, introduced by Sen. Donovan Dela Cruz (D, Wahiawa-Whitmore-Mililani Mauka), who chairs the Senate Ways and Means Committee, would repeal HTA to create an Office of Destination Management within DBEDT. The new agency would be governed by a nine-member board, an executive director and a tourism liaison officer. The bill does not yet appropriate funding for the new agency or the Hawai‘i Convention Center, and it doesn’t address the number of positions that the new agency should have.
If neither bill is approved and the state budget becomes the vehicle to fund HTA, the agency faces another substantial hurdle as the current appropriation in the Senate version is zero. The appropriation in the House version is $35 million, but that’s a more than 50% cut from the $75 million that HTA requested this legislative session.
De Fries said, “To say we are at serious odds with the Legislature is an understatement, but what we have in common, all of us, all of us, is that we all care about our island home. This standard and this kuleana gives me optimism that in the next five to 10 days we will be able to find our way into the future together.”
During a Legislative briefing April 12 at the HTA spring tourism update, Dela Cruz said, “There have been times in the past where things just didn’t seem to work. We have constituents that want these problems solved now and they don’t want to wait any longer.”
Quinlan said during the briefing that he favored a tourism governance structure that put destination management at the top.
“If we are going to consciously bring in 10 million visitors a year, we can’t just manage their money. We need to manage the flows of physical people,” he said.
Dela Cruz said he didn’t think the Senate and House were that far apart on what they wanted to see in the bills.
The stakes are high as HTA navigates through what looks to be the most contentious legislative session for the agency since state lawmakers gave it life in 1998. Past experience tells the agency that all bets are off once lawmakers head to conference, especially when their funding lies in bills rather than in the state budget.
Last year lawmakers left HTA’s funding out of the state budget in an attempt to force the passage of reorganization bills, which failed to pass. Lawmakers then attempted to provide eleventh-hour funding to HTA through a capital improvements bill, but then-Gov. David Ige vetoed the measure because it relied on “gut and replace.” As the measure contained HTA’s only legislative appropriation, Ige provided the agency with federal funding, but the $35 million was far less than HTA’s requested $60 million budget.
HTA Board Chairperson George Kam said stakes are even higher this year for HTA, which no longer “has a safety valve” as it has been spending down money from prior years to make up for the current year.
HTA Chief Administrative Officer Daniel Naho‘opi‘i added, “Though there may have been well-intended adjustments and recommendations to our agency, the final bills as they are right now actually create a mess and confusion for the staff as well as our stakeholders and to constituents.”
Naho‘opi‘i said dissolving HTA would result in the loss of a $14 million Federal Economic Development Administration grant where HTA is the awardee and its partner is the Department of Land and Natural Resources. Naho‘opi‘i said millions of dollars in funding for HTA- supported community programs also would be lost, and progress on destination management action plan initiatives across the islands would halt.
De Fries said HTA’s preferred scenario would be for the Legislature not to advance the bills to repeal the HTA, and instead increase the budget bill to fund HTA.
Isaac Choy, HTA vice president of finance, who served five terms as a state representative, said, “(Lawmakers) can always put the funding in the budget bill as they can in the subject matter bill. I think the legislators are sending us a message, being a former legislator I know, and the most important message is, ‘We got the message.’”
If the state Legislature decides to repeal the HTA, De Fries said the agency is hopeful that lawmakers would consider extending the effectiveness date to two years.
Kam said an extension would give lawmakers time, along with HTA, to make a more mindful change.
“A lot of things they are doing are irreversible and destabilizing,” Kam said. “We plan to propose at the next HTA board meeting that we do a governance study and have it completed before the next Legislative session. We are constantly changing. We want to change even more, but we want to do it in the right way with the right experts.”
Kicking the can down the road also might allow for a fresh look as 12 out of 25 state senators are up for reelection in 2024, which could change the composition of the Senate, the more critical body on HTA matters.
Correction: An earlier version of this story mislabeled a bill’s chamber on the second reference of the bill due to a typo. Sen. Donovan Dela Cruz introduced SB 1522 not HB 1522.
