Plan to raise hotel room tax for climate change among surviving bills

A bill that would generate new revenue for the state to address climate change and reduce the risk of future wildfires by increasing the state hotel room tax remains alive at the midpoint of the 2025 Hawaii legislative session.

Perennial efforts to allow different forms of gambling, such as a lottery, and legalize adult recreational marijuana use, however, once again appear dead, among hundreds of other bills that have stalled.

Others remain alive that are intended to curtail the use of illegal fireworks following the deadly New Year’s explosion in Ahuimanu that killed six people, including a 3-year-old boy, and maimed dozens of others.

Legislators introduced a total of 3,172 House and Senate bills since the session began Jan. 15.

Out of all of them, 309 passed out of the Senate and 376 from the House last week and into the other chamber, meaning they’ll continue to be considered at least at some point during the next half of the legislative session that’s scheduled to end May 2.

Several remaining bills are designed to further reform government, addressing state elections, campaign fundraising, lobbying and nepotism. But bills have died that would impose term limits on state legislators, the only officials elected to state offices who are able to serve indefinitely.

Many of the reform bills were proposed by the state Campaign Spending Commission and state Elections Commission, which continue to pursue government transparency and election, campaign and lobbying reform.

Even some bills that passed out of the House and Senate last week, however, typically die quickly and quietly once they cross over into the opposite chamber.

Following the end of the 2023 legislative session, Gov. Josh Green signed 263 bills into law, followed by 253 in 2024.

Both House Speaker Nadine Nakamura and House Republican Minority Leader Lauren Matsumoto earlier this session said this year represented unprecedented cooperation between the Democratic majority and Republican minority, especially when it comes to making life more affordable for struggling residents.

In a small indication of whether the bipartisan support would produce tangible results, the nine-member House Republican Caucus for the first time in at least 15 years saw one of its bills pass out of the 51-member House and into the Senate last week.

The latest version of the Republicans’ bill, House Bill 286, would increase the maximum annual deduction for contributions to, and the maximum account levels for, individual housing accounts.

Matsumoto wrote in a text to the Honolulu Star-­Advertiser that it’s “unfortunate” that more Republican-­­s­ponsored bills don’t pass through the Legislature “because they are great ideas that will help the people of Hawaii.” She described HB 286 as “a strong bill that will help local families be able to afford a down payment for their first home.”

Taxes on tourists

The 2025 legislative session represents Green’s third consecutive attempt to raise new revenue to pay for the estimated $500 million the state needs annually to respond to climate change and reduce the risk of future wildfires across the state.

Before the August 2023 Maui wildfires, Green had proposed putting the cost predominantly on tourists, which then morphed into a wide range of ideas in the Legislature that included annual tourism climate impact “licenses,” charging visitors each time they entered Hawaii’s most popular state sites, trails and beaches, and increasing the transient accommodations tax that both tourists and residents pay when staying in hotels, short-term vacation rentals and Airbnbs on all islands.

The concept died during Green’s first legislative session as governor but took on sudden urgency months later when a wind-whipped wildfire inferno killed 102 people and all but obliterated Lahaina on Aug. 8, 2023.

“We know we have to raise money to mitigate the risk,” Green told the Star-Advertiser last week in his fifth-floor office atop the state Capitol.

Hawaii’s tourism industry continues to push back against increasing fees and taxes for tourists, arguing the extra expenses will discourage visitor arrivals.

The latest version of Senate Bill 1396, the lone surviving bill that would increase the TAT to address climate change, offers no specific increase. In response to opposition from the visitor industry, Green said he wants a “modest” hike of 1% compared to his original hope to raise the TAT 1.7%.

He argued that requiring hotel guests to pay another $5 to $8 per night won’t discourage tourists from visiting Hawaii.

“People will still come,” Green said. “People are still coming in giant droves. I’m meeting the hotel industry halfway.”

He called increasing the TAT to pay for climate change and fire mitigation “necessary” and “a compromise.”

Working to reduce the effects of climate change and prevent wildfires also will lower insurance rates across Hawaii, Green said.

More kauhale funding

This year, the governor also proposed dedicating all of the annual estimated $60 million in interest earned on the state’s billion-dollar “rainy day fund” to be dedicated to address climate change and wildfire mitigation.

SB 1395 crossed into the House last week and would divert all of the interest earned from the rainy day fund. It would generate about $60 million annually with another $80 million or so through increasing the TAT — far short of the annual need for $500 million.

But, Green said, “you can still do a lot with $100 million to $200 million” annually to better prepare Hawaii for the next 20 to 30 years.

His ongoing effort to build more tiny home villages, or kauhale, to get homeless people off the street and provide them with services also continues to receive support midway through the session.

Economic realities

Ultimately, how much legislators will have to spend at the end of the legislative session will come down to two unknown variables, particularly how President Donald Trump’s continuing campaign to slash federal spending, programs and employees will affect every state, including Hawaii.

Hawaii relies on federal help to maintain services to island residents and support the work of nonprofit groups. Green said that whatever happens could add up to millions of dollars in lost federal services and funding that Hawaii cannot cover.

The other economic variable came last week when the state Department of Business, Economic Development and Tourism lowered its projections for economic growth, citing the likelihood of federal spending cuts, rising inflation and a sluggish rebound in visitor arrivals that surpassed 10 million just before the start of the COVID-19 pandemic five years ago.

DBEDT had previously forecast economic growth of 2% for the first four months of this year, but dropped that figure to 1.7%.

The House version of the state budget includes $200 million set aside for unforeseen spending needs that House leaders cannot predict right now.

In a statement to the Star-Advertiser, House Finance Chair Kyle Yamashita said, “We must balance our immediate needs with the responsibility to be prepared as much as possible for the uncertainty stemming from turmoil in Washington, D.C. The $200 million allocated in the state budget will not be enough to cover everything, but it will serve as a contingency if we need to pull that lever.”

Fireworks enforcement

Fireworks-related bills that crossed over and remain alive include the latest version of HB 1483, which includes increased penalties if someone suffers serious injuries or death.

The latest version of another bill, SB 222, would fund another five years of operations for the Illegal Fireworks Task Force, while the latest version of SB 227 would create the Illegal Fireworks Enforcement Division within the Department of Law Enforcement to work with the task force on enforcement.

Under the latest version of SB 1324, new criminal offenses would be created for people who send or receive fireworks by air and distribute them to people who lack permits. It would also increase penalties for fireworks offenses, especially if someone gets injured or killed.

The bills passed out of the Senate Committee on Public Safety and Military Affairs chaired by state Sen. Brandon Elefante, who said in a statement that extending the Illegal Fireworks Task Force and creating a new enforcement division “will ensure that our laws are being upheld, and that those who break them face the consequences they deserve. We must continue to prioritize the safety of our people, and these bills are a key part of that commitment.”

A range of needs

The latest version of HB 428 and its Senate companion, SB 1250, are intended to address food shortages in Hawaii that leave one in three households in need of food, meaning 30% of island children grow up in “food insecure” homes, according to the bills.

Native Hawaiians and Pacific Islanders disproportionately suffer, with more than 40% of those households experiencing food insecurity.

The “Farm to Families” bills would provide state funding for food banks while also giving local farmers a bigger, local market and additional sources of revenue.

In an attempt to expand preschool education across the state, the latest version of HB 429 would fund salaries for preschool teachers and teacher assistants, equipment and other services.

The latest version of HB 433 would provide the state Department of Corrections and Rehabilitation with funding to help newly released inmates with community-based services to prevent them from becoming homeless and committing future crimes.

Services would address employment, clean and sober housing, substance abuse and mental health, among other issues.

Failed proposals

Notable bills that appear dead include the latest versions of SB 1613 and HB 1246, which would allow adult recreational use of marijuana.

Also apparently failing to advance are HB 728 and SB 297, which would have let voters decide if they want to approve an amendment to the state Constitution enshrining reproductive rights, proposed in response to a U.S. Supreme Court ruling that left the question of abortion rights up to individual states.

Abortions remain legal in Hawaii. Additionally, doctors and other health care workers who perform them on local residents as well as those who arrive from states that ban abortions are immune from prosecution in other states under a bill passed by the Legislature and signed into law by Green following the U.S. Supreme Court’s 2022 decision in Dobbs v. Jackson.

Also failing to advance this legislative session is SB 1618, which would have created a Journalistic Ethics Commission attached to the state Department of Commerce and Consumer Affairs and a Journalistic Ethics Review Board to consider complaints against journalists, including alleged ethical violations, and issue penalties for violations of an unspecified “Journalistic Code of Ethics.”

SB 1618 was introduced by seven Democratic and one Republican senators, including veteran Democratic state Sens. Donna Kim, Donovan Dela Cruz and Glenn Wakai, a former television journalist.

It died without being scheduled for a hearing in the Senate.