The Hawaii legislative session began Jan. 17 clouded in unknowns over how much money would be available overall, how much could be spent to help Maui recover from the Aug. 8 wildfires, and concerns that lawmakers would have to tap into the state’s so-called rainy day fund to meet Hawaii’s needs.
Instead, the session ended on Friday with about $1 billion dedicated for Maui’s recovery, historic tax breaks for residents over the next eight years estimated to be worth $5 billion, and $300 million extra to go into Hawaii’s $1.5 billion rainy day fund, along with another $135 million dedicated for retired government workers’ future benefits.
Following the traditional singing of “Hawaii Aloha” by state representatives and senators on the floor of the House of Representatives Friday, Gov. Josh Green signed a bill that gives counties the authority to regulate short-term vacation rentals as they see fit — including the possibility of banning them — with the goal of freeing up more housing for local residents to keep them from joining the exodus of people moving to states with less expensive housing and costs of living.
House Speaker Scott Saiki called it “one of the most historic sessions in our state” that began “with so much uncertainty.”
Senate President Ron Kouchi then said it had been “an amazing session” that ended with “everyone” in Hawaii receiving help.
Sen. Donovan Dela Cruz (D, Mililani-Wahiawa-Whitmore Village), who chairs the Senate Ways and Means Committee, said that the standard deduction for joint tax filers will grow from $4,400 currently to $24,000 by 2031.
The take-home pay for a family of four earning $88,000 would rise by about $3,600 as their tax bill drops to about $1,500 from about $5,100, Dela Cruz said.
Some bills that passed out of this year’s legislative session had been years and even decades in the making, such as new labeling requirements designed to protect farmers of Hawaii-grown coffee and macadamia nuts.
Sen. Dru Kanuha (D, Kona-Kau-Volcano) called the labeling bills “historic,” and the bills were also celebrated on the House floor by Hawaii island representatives, who applauded the persistence of farmers to protect their crops.
General excise tax exemptions also would go to medical and dental health care providers who treat patients with Medicaid, Medicare and TRICARE benefits.
Additional funding will help ensure more mental health treatment, care for the disabled and the elderly, and toward issues such as homelessness and housing, House Finance Chair Kyle Yamashita (D, Pukalani-Makawao-Ulupalakua) told his House colleagues during a Wednesday floor session that resulted in the passage of dozens of bills.
Other bills headed to Green’s desk are more symbolic, such as ones that make the ubiquitous shaka the official “gesture” of the islands; require an okina in the word “Hawai‘i” on license plates; add Iraq and Afghan war veterans to the list of veterans from other wars to be honored on license plates, along with license plates honoring Duke Kahanamoku and the Outrigger Duke Kahanamoku Foundation; and designates each Nov. 22 as “Kimchi Day” to celebrate Hawaii’s Korean culture.
Other bills impose new noise regulations on weed whackers, leaf blowers, scooters and loud mufflers.
Another aimed at easing Hawaii’s housing crunch and addressing an estimated shortage of 50,000 affordable units across the islands proved divisive.
It directs counties to develop ordinances to allow at least two accessory dwelling units on lots zoned for residential use by the end of 2026 and resulted in some legislators saying they were “bombarded” by hundreds of emails for and against.
There were also several bills that, once again, attempted to address perennial complaints over feral animals, particularly chickens.
The Legislature settled on a less-draconian effort to require the state Department of Agriculture to work with each county to implement unspecified feral chicken control programs and develop education campaigns about feeding feral animals.
Other bills are aimed at preventing potentially dangerous behavior by barring the release of personal information on the internet by government agencies and public servants; by banning people under the of age 21 from owning, possessing and buying ammunition; and with new regulations and “consequences for dog owners whose dogs cause harm to others and allows the impoundment of those dangerous dogs under specific circumstances.”
Several notable bills died, including an early high-profile effort by Green to make Hawaii the only state other than Utah to lower the blood alcohol content to legally drive to .05% from .08%; the perennial effort for Hawaii to join 24 other states and the District of Columbia to legalize recreational marijuana use for adults; and to allow any form of legalized gambling, leaving Hawaii and Utah as the only states to ban all forms of gambling.
Among the failed bills were various approaches to charge tourists as a way to help offset their impacts on Hawaii’s fragile ecosystem and address climate change — while possibly discouraging visitor arrivals.
The concept picked up momentum as the number of tourists climbed toward pre-COVID-19 levels of over 10 million annually, and as residents across the islands continue to call for a way to limit tourism.
But legislators could not agree on a funding mechanism, including a bill that went the furthest this session that would charge tourists another $25 in transient accommodations taxes. The additional tax was opposed by segments of Hawaii’s hotel and tourism industries.
Other failed bills included selling naming rights to the Hawai‘i Convention Center and Aloha Stadium.
And the Hawai‘i Tourism Authority appeared to mollify years of criticisms by legislators when bills died this session that would have stripped HTA of its responsibilities.
Perhaps no bill will prove to be more divisive than the one Green signed into law on Friday giving counties the discretion to further regulate short-term rentals in the name of creating more affordable housing for residents.
The question of how — and whether — to proceed will play out before county planning commissions, county councils and courts for years.
Jennifer Wilkinson — vice president of the Hawai‘i Mid and Short-term Rental Alliance that testified in opposition — told the Honolulu Star-Advertiser following Green’s signing ceremony that she hopes county policymakers appreciate the many issues underlying Hawaii’s vacation rental industry “to make it workable … and the least harmful.”
“I hope the counties will listen to us,” she said. “We know about the situations that people are facing. So we’re in favor of smart regulation that carves out the needs of residents to make sure they have options.”
Wilkinson works for a property management company, and her husband earns his living as a musician and handyman. They live in a multi-unit home in Kailua-Kona above a two-bed vacation rental. They rent a separate unit on their property as a six-month lease to a nurse.
Their rental income — especially the short-term vacation unit — “absolutely” helps cover their housing, living costs and taxes, Wilkinson said.
Out-of-state vacation homeowners are regularly singled out by critics of short-term rentals. But people like Wilkinson should also be considered by potential vacation rental changes, she said.
For owners like her and her husband, Wilkinson said, “You need the income to secure your own housing here. … A lot of residents will be harmed if they’re banned out right.”
And her family, including a son stationed at Schofield Barracks, uses Hawaii vacation rentals as customers, often while traveling to Oahu for medical care.
So the availability of short-term rentals benefits residents who want to stay in places with kitchens and other amenities not usually found in resort areas, Wilkinson said.
“We get it,” she said. “And we are supportive of more options for the local community.”
Star-Advertiser reporter Andrew Gomes contributed to this report.
