Commentary: Consequences of HB1586 – Relating to Taxation

There will be unintended consequences if HB1586 passes, especially if the disbursement of transit accommodation tax revenue to the counties is eliminated. The County of Hawaii receives 19.5 million dollars in TAT funds. This is their second highest funding
source after property taxes.

The TAT revenue source is used to the mitigate the impact of tourism industry on each county. I firmly believe the residents of each county shouldn’t have to pay entire cost for lifeguard, police, fire, etc services used by these tourists.

The elimination of this funding source will force the county to increase taxes on all property classes, not just on properties owned by wealthy off island homeowners. This will undoubtedly passed on to homeowners, who rent out to individuals (and families) with lower incomes.

These individuals (and families) would be seeing relief in state taxes, but they’ll be seeing higher rental costs as a result. These folks are living on the edge and can ill afford to pay more for rental housing.

Aaron Stene
Kailua-Kona

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