MEDIA RELEASE

County of Hawaii Mayor Billy Kenoi released the following statement today on the new draft of Senate Bill 1186, which would reduce the distribution of the transient accommodations tax (TAT) revenues to the counties:

“We are deeply concerned about the Senate position on the hotel room tax. The Senate proposal to cap the TAT distributions at $85 million for all of the counties represents a deep cut into our second largest source of revenue,” Mayor Kenoi said.

“The Senate draft would hurt all of the counties. We ask that the Senate instead accept the House position, which would cap the TAT distribution at the 2010 level, or about $102 million,” Mayor Kenoi said.

From the time of the establishment of the TAT in 1986, the Legislature planned to make the Counties beneficiaries of the hotel room tax because lawmakers recognized the importance of county facilities and services to support and enhance the visitor experience.

The TAT is distributed to the counties in recognition of the fact that county services are critical to a healthy visitor industry. The counties provide the police officers, firefighters, lifeguards, water and sewer service, transportation infrastructure and other essential services for visitors.

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Mayor Carvalho statement on TAT

County of Kauai Mayor Bernard P. Carvalho, Jr. issued the following statement on the latest draft of Senate Bill 1186, which would reduce the amount of transient accommodations tax (TAT) revenues that would be distributed to the counties:

“Although we understand the need for a temporary cap, the counties are very concerned about the Senate’s proposal to lower the cap on TAT distributions to $85 million. Such a drastic cut would have significant impacts for us, as the TAT is our second largest source of revenue behind real property taxes. At this point I endorse the House position, which would cap TAT distribution to the counties at the 2010 level, or roughly $102 million.”

Carvalho added that any cap on the TAT should be temporary until the state’s fiscal position improves.

The TAT was established in 1986 under Act 304, Session Laws of Hawaii and imposes a tax on the gross revenues derived from the furnishing of transient accommodations.

In 1990, in recognition of the profound impact tourism has on county services, the state began to distribute a significant portion of the TAT to the counties on an annual basis.