For the second year in a row the state is threatening to take the county’s portion of the Transient Accommodation Tax and although last year the governor rightly opposed the idea, this year she is recommending it. If this happens
For the second year in a row the state is threatening to take the county’s portion of the Transient Accommodation Tax and although last year the governor rightly opposed the idea, this year she is recommending it.
If this happens it will be bad for the people of Kaua‘i. Because of our unique circumstances this move will have a greater impact on Kaua‘i than it will on the other counties in our state.
The TAT is collected from visitors as a tax on their overnight accommodations. For years a portion of this tax has gone to the county because visitors have a large impact on county services such as police, fire, parks, and roads, etc. In fact on Kaua‘i visitors are roughly 25 percent of the population on any given day. In contrast visitors represent just 8 percent of the population on O‘ahu. Because of our smaller population and the high percentage of visitors, TAT is a bigger percentage of our county budget than it is on any other island. The loss, if it comes, will hit us harder than others.
It is logical and appropriate that visitors contribute to the services we provide them. Yet powerful members of the legislature are considering taking all of this revenue, so visitors will contribute nothing to county services; they want us to tax you instead! They are proposing to give the authority to the counties for a new sales tax that will increase the cost of everything you buy everyday. Sales tax is a regressive tax that hits low and middle income working families the hardest. Under this plan what has been a tax on visitors for visitor service becomes largely a tax on Kaua‘i’s citizens for visitor services.
With revenues declining there is no question that these are difficult times for government in Hawai‘i both at the state and county level. As the state has dealt with budget shortfalls the governor has largely relied on across-the-board budget cuts without a thoughtful analysis of the impact of each cut. In the real world some government services are more essential than others. Providing services related to health and welfare, public safety and education are more important than maintaining the same level of equipment replacement for instance. The state should make the difficult decisions the counties are already making not dump their responsibilities on us and in the process create a crisis for county government.
On the county level our mayor in collaboration with the Council has already responded to decreasing revenue by thoughtfully cutting the county budget and making tough decisions. We have significantly reduced the workforce and cut spending in many areas. But cuts can only go so far. Large additional budget cuts or furloughs in police and fire are unacceptable, for instance; compromised public safety is not an option.
Kaua‘i County has cut spending proactively in large part by reducing the workforce. We have dollar-funded numerous position and are filling only the most essential vacancies. As a result our current employees are stepping up and working hard to maintain a basic level of service with fewer people. If possible I believe the county should try to limit or even avoid the employee furloughs the state has relied on. Furloughs hurt all of us not just the government workers who are having their hours and pay cut. These employees are our friends’ neighbors and family and represent a significant portion of the middle class customers the private sector relies on. If the county is forced to furlough our already pared back workforce our local economy will take yet another hit resulting in the loss of more businesses and private sector jobs.
Our county should continue to educate people and advocate for our fair share of the TAT tax. We should not trade it away for new taxing authority. We should try our best to avoid additional taxes on our citizens. If the governor and Legislature act irresponsibly and pass the buck to the counties we may be forced to raise revenues much more than we would otherwise. If it comes to that we need to do it fairly and equitably and not place the biggest burden on those less able to shoulder it. Now is the time to contact our state legislators and expect them to do the right thing.
• Kapa‘a resident Tim Bynum is a member of the Kaua‘i County Council.
