Hawaii plans to increase hotel taxes to help it cope with climate change: NPR

On November 15, 2020, people were seen in the beach and water in front of the Kahala hotel and resort in Honolulu. Jennifer Sinco Kelleher/AP Closed subtitles

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Jennifer Sinco Kelleher/AP

Honolulu - Hawaiian lawmakers are ready to collect taxes levied by travelers who collect hotels, vacation rentals and other short-term accommodations and specify new funds for plans to deal with warming planets.

State leaders say they will use the funds to replenish sand on eroding beaches, help homeowners install hurricane clips on their roofs and remove invasive grass, just like the deadly wildfire that destroyed Lahaina two years ago.

The bill, which plans to vote on the House and Senate on Wednesday, will increase daily indoor taxes starting on January 1. It is almost certain that given Democrats hold super taxes in Chambers and party leaders, they have agreed to the measure. Gov. Josh Green said he would sign it into law.

Officials estimate that the increase will generate $100 million in new revenue each year.

"We had a $13 billion tragedy in Maui and we lost 102 people. This type of dollar will help us prevent the next disaster," Green said in an interview.

Green said Hawaii was the first state in the United States to do something along those routes. Andrey Yushkov, a senior policy analyst at the Washington, D.C.-based nonprofit Tax Foundation, said he was unaware that any other state had put on housing tax revenue for environmental protection or climate change purposes.

Increased already a substantial increase in taxes will increase short-term accommodations already have relatively large responsibilities. The state's existing 10.25% daily house price tax will rise to 11%. In addition, Hawaii counties have added their own 3% surcharge per county, and the state and county impose a general excise tax of 4.712% on goods and services, including hotel rooms. This will bring the tax rate to nearly 19%.

According to a report by global hotel consulting firm HVS, the only large city with high cumulative state and local tax rates is Omaha, with 20.5% in Nebraska and 19.3% in Cincinnati.

The governor has long said that 10 million visitors to Hawaii each year should help the state's 1.4 million residents protect the environment.

Green believes travelers will be willing to pay taxes because doing so will make Hawaii “keep the beaches perfect” and preserve favorite attractions such as Maui’s road to Hana and the coastline along the north shore of Oahu. After the Maui wildfire, Green said he heard thousands of people across the country ask them how they can help. He said this is an important way they can do it.

Hotel Industry, president of the Hawaii Hotel Alliance, which represents hotel operators in the state, said the industry was pleased that lawmakers did not adopt the higher growth originally proposed.

“I don’t think anyone in the tourism industry said, ‘Okay, let’s go out and get taxed.’ No one wants to see that,” Gibson said. “But our country needs money at the same time.”

Gibson said the silver lining is that the money should beautify the environment in Hawaii. If so, he said it would be worth it.

Hawaii has long struggled to pay for the huge environmental and conservation needs of these islands, from protecting coral reefs to herbicidal invasive plants to ensuring visitors do not harass wildlife, such as Hawaiian monk seals. The state also has to maintain a large network of trails, many of which have heavy traffic as more travelers choose to hike on vacation.

Two years ago, lawmakers considered asking visitors to pay a year-long permit or pass to visit state parks and trails. Green wants all visitors to pay $50 to enter the state.

Raising accommodation tax is their compromise solution, which is even more urgent for the Maui wildfires.

Now, a large Gapan advocacy group, CARE AINA CARE, calculates the $561 million gap between Hawaii’s conservation funding needs and the money spent each year.

Green admitted that the tax increase revenue was insufficient, but said the state would issue bonds to capitalize on the funds it raised. Most of the $100 million will be used to measures that can be processed within a one-to-two-year time frame, and $100-15 million of that will pay for bonds supporting long-term infrastructure projects.

Kāwika Riley, a member of the Governor's Climate Advisory Group, noted that Hawaiians said "only one day's stranger" to explain the new tax. This sentence means that visitors should help complete the job after the first day of becoming a guest.

“Literally, our visitors have to come here to work for us. But what we are saying is that it’s important to be part of the solution,” Riley said. “It’s important to care about what you like.”