Counties Could Lose Big on Hotel Tax Revenues
No wonder the city budget is still up in the air. At Honolulu Hale, they’re nervously watching what’s happening across the street at the State Capitol today. If lawmakers can’t fix the state budget, they plan to snatch the counties’ share of the Transient Accommodations Tax (TAT). That’s what Gov. Linda Lingle wants to do.
The City and County of Honolulu Government receives just 44 percent of TAT revenues distributed to the counties, even though the city contains more than half of the state’s hotel inventory.
Here’s a quick review of Honolulu’s share of the TAT, also known as the hotel tax, over the past few years:
- 2007: $44 million
- 2008: $45 million
- 2009: $41 million
- 2010 (appropriated): $43 million
- 2011 (appropriated): $41 million
A severe reduction or elimination of these funds will force the city to make up the shortfall by raising taxes or cutting programs. For a little perspective, a number of people during Wednesday’s public hearing spoke in favor of preserving the Royal Hawaiian Band, which costs the city about $2 million per year — and that’s just one program that could be in jeopardy. Is it right for state lawmakers to raid the counties’ share of the hotel tax?
