A public rift has developed between Hawaii Tourism Authority (HTA) board members over just how much money the taxpayer-supported agency needs in the coming year to do its job right — with a $10 million gap between sides.
The difference of opinion isn’t only over how much money HTA should ask the Legislature for; it’s also over how much control the state Department of Business, Economic Development and Tourism (DBEDT) should wield over HTA, by virtue of new legislation that took effect this year. The conflict is an indication of deeper issues concerning the structure and direction of HTA, which need resolution.
State spending, however, is the issue at hand — and the most prudent path and immediate priority for Hawaii is to keep a lid on it, as critical obligations to Maui recovery efforts and an economy-throttling housing crisis take precedence.
HTA’s split revealed itself at a special board meeting Sept. 13, when HTA Chair Mufi Hannemann, Vice Chair Mahina Paishon and board members Stephanie Iona, James McCully, Blaine Miyasato, Roy Pfund and Mike White voted to request $80 million — $17 million more than the current year’s budget — from the Legislature in the upcoming session.
That ask differed from the recommendation of HTA’s Budget, Finance and Convention Center Committee, chaired by David Arakawa, who with fellow committee members Kimberly Agas and James “Jimmy” Tokioka suggested the agency request a base budget of $70 million, with “supplemental” requests for up to $10 million in “medium- to lower-priority items.”
The twist here is that Tokioka is not only an HTA board member; he’s also, and not coincidentally, DBEDT’s director.
The HTA board’s $80 million budget request went to Tokioka, in his role at DBEDT. And on Oct. 4, Tokioka told the Honolulu Star-Advertiser that he planned to transmit an HTA budget request for $70 million to Gov. Josh Green and state Finance Director Luis P. Salaveria, who in turn would bring it to the Legislature.
Tokioka told the Star-Advertiser that Salaveria instructed him to keep HTA within its base budget — again, currently at $63 million. This year, that alone is enough reason to endorse the DBEDT director’s decision. It’s not that there should be no disagreement over spending targets — that can be a healthy part of a budget discussion. But in the state’s current economic environment, with little growth predicted and other emergency and recognized priorities looming large, holding the line on agency spending must be expected.
HTA’s budget is subject to DBEDT’s administration — as directed by Senate Bill 3364, which took effect on July 1 as Act 225. Spelling it out, Tokioka correctly told the Star-Advertiser that this means HTA, as “an attached agency,” needs DBEDT approval for its budget requests.
It’s a new era for HTA in that regard, due to Act 225. When HTA was established in 1998, it was allowed dedicated funding from the transient accommodations tax, independent control over contracts awarded and autonomy in drafting its proposed budget. All of those assets and powers have now been reined in, beginning in 2021.
Between 2018 and 2023, HTA experienced a backlash in public opinion and at the Legislature that led to budget cutbacks, a change in direction for the agency and efforts to defund or abolish it. The turbulence arose from public dissatisfaction with burgeoning tourist numbers at the expense of local communities and the environment, a recognition that insufficient attention had been paid to destination management and state concern over procurement practices.
In that light, a squabble over spending may seem surprising, given that establishment of HTA’s current $63 million budget was considered an achievement during the just-passed legislative session.
However, a bill making “regenerative tourism” a framework for tourism planning was also enacted this year (SB 2659) — and SB 3364 itself establishes destination management as HTA’s intrinsic responsibility, in addition to tourism marketing. Given the added expectations, the HTA board’s push for bigger funding is understandable; in addition, some key tourism industry leaders say a robust budget is vital, given global competition for visitor traffic.
The current split indicates that DBEDT and the board aren’t completely aligned on vision; that separation in perceived mandates is also a rift that needs healing.
The tensions between HTA, visitor industry interests, the public and state government won’t easily be resolved. That’s one factor in HTA’s decision last year to commission a restructuring analysis. That analysis, by an independent consultant, resulted in a recommendation that the agency be restructured into a community-driven nonprofit — an option that has yet to generate much enthusiasm from stakeholders.
Nonetheless, a reorganization of HTA that establishes clear lines of accountability and authority may be necessary to satisfy Hawaii’s competing concerns. This possibility shouldn’t be dismissed as Hawaii, and HTA, plan for the future — for a tourism industry and impacts that have evolved over the past quarter century.
