LIHUE — Major strides were made in many areas during Hawaii’s 2016 Legislative session, but some Kauai officials are saying they feel slighted by the state.
That’s because the cap on the transient accommodations tax (TAT) is staying firmly in place.
“I am disappointed that the TAT working group’s recommendations were not followed, or that the request from all counties to lift the cap on TAT was not considered,” said Kauai Councilman Mason Chock. “Our county will continue to feel the stranglehold of funding being withheld, which will affect the much needed infrastructure needs on Kauai.”
Those staying in hotel rooms in Hawaii pay a total of 13.25 percent of their rate in taxes — 4 percent in general excise taxes (GET) and 9.25 percent for TAT. The four counties get 2.25 percent of the money raked in from the TAT and the state takes nearly 11 percent.
When the tax was created, counties received 44.8 percent of the TAT, or about $188 million. Trouble for the counties started in 2009, when the state capped their portion of TAT revenues at $93 million. The state raised the cap to $103 million for fiscal years 2014-15 and 2015-16.
County officials maintain that they need the amount they’re originally entitled to, in order to help fund the maintenance, public safety, and transportation to support the tourism industry.
“While many good things were accomplished, it is hugely disappointing that the state legislature continues to shortchange the county by holding back Kauai’s fare share of the TAT revenue,” Kauai Councilman Gary Hooser said. “It is not fair that Kauai property tax payers are forced to foot the bill that should be rightfully paid by visitors.”
Representative Dee Morikawa (D), who was chairwoman of the Human Services committee, said money was a challenge for much of the session.
“How to divvy up the funding was a challenge,” Morikawa said. “We have put substantial funding into the Unfunded Liability and the Rainy Day fund. This will help the state’s bond rating and shows that we are seriously thinking about being prepared for any future economic downturns.”
Specifically, the state put $150 million toward the Rainy Day fund and nearly $82 million to pay down Unfunded Liabilities – which is monies owed toward state retiree’s post-employment benefits.
She said a major highlight for her was the $2.9 million Waimea Canyon Middle School will get to construct a covered playground She was also pleased with the $100 million for statewide heat abatement in schools and the $10 million secured for pre-school funding.
Other highlights Morikawa said she was proud of are a million dollar renovation for the Hanapepe Veteran’s Cemetery Pavilion, $12 million for homeless outreach services, and $5 million for the Kekaha Ditch system.
“With the recent concerns about the Kekaha Ditch system, (that money will be used for) construction upgrades and improvements, which should help with addressing some of those concerns,” Morikawa said.
Another positive result from the session is that Long Term Care facilities will get increased Medicaid reimbursements from an inflationary adjustment, Morikawa said, which will be a “tremendous help to these facilities, who we know are struggling to survive.”
Though they’ve wrapped up this session, Morikawa said there’s still work to be done — especially on a bill for prescriptive rights for psychologists, which failed to pass at the very last vote.
“I felt that allowing psychologists to do that would have helped Kauai, since access to psychiatrists is difficult, especially in very rural areas,” Morikawa said. “Perhaps we need to try again next year to address the concerns raised by physicians and psychiatrists.”
Jessica Else, enviromental reporter, can be reached at 245-0452 or email@example.com.