It was less than a year ago that our Legislature held a special session to shore up the rail project. One innovative proposed funding source was to increase the transient accommodation tax, or TAT, as that would affect in-state people less and target tourists the most.
That part made sense. The part that did not make sense to me and many of my fellow neighbor-island legislators was that the increase on the TAT paid for accommodations on the neighbor islands would go to rail rather than the counties where it was paid.
This was especially true because Honolulu Mayor Kirk Caldwell was complaining about having to raise property taxes on his voters if the Legislature didn’t give him the money he wanted. Because the TAT increase did not lead to a meaningful increase for the neighbor islands, the Big Island did have to raise property taxes, fuel taxes and vehicle weight taxes. For those reasons, I voted no, as did Big Island Reps. Cindy Evans, Nicole Lowen and Chris Todd.
Fast forward to this legislative session and, with pressure from neighbor island legislators, mayors, and county councils, SB648 was amended to give the neighbor islands a big chunk of that TAT increase. The Big Island would have received over $12 million more each year. It passed the House and Senate in different versions, but the Senate then killed the bill.
The heavens opened, Kauai was flooded and the Legislature in the last moments of this session provided $100 million in aid to Kauai.
Now Madam Pele has been aroused and the Big Island is being assaulted by lava, ash and laze. Tourism revenues and property taxes are diving, county expenses are soaring, and the county budget is trashed.
We need another special session and I am asking our governor to call one.
We hope that in addition to substantial emergency funding, the TAT bill will be passed and that long-term increase in the county revenue stream will be accomplished. The ability to raise the GE tax should be extended with fewer restrictions. Ideally, it would only be raised for a limited number of years and then sunset.
It appears very likely that we may lose a quarter of the Big Island’s power source if the geothermal plant is overrun or made inoperable by lava. One possible partial solution to that is mandating an extension of the feed-in tariff to encourage more solar power and passing a tax credit for storage batteries bill that would decrease the peak demand on the power grid.
Desperate times call for desperate measures, but these measures all make sense and we can do them expeditiously in a special session. Call your legislators. Call the governor. Let’s save our island, together!
Richard Creagan, M.D., is a State Representative, District 5