Hawaii Senate Proposed Conference Draft Amendment Protects Neighbor Islands TAT Funds

Calling the House proposed conference draft (CD2) on SB1183 SD2 HD2 an “innovative and creative approach” to funding Honolulu’s rail project and addresses the concerns that have been raised throughout the process, the Senate today offered a counter proposal to the House CD2 which would reduce the distribution of the transient accommodation tax (TAT) funds to only the City and County of Honolulu, thereby allowing the neighbor island counties to keep their share of the TAT.  The House CD2 removes the 2-year GET extension and proposes to raise the TAT by 2.75% which is expected to raise $1.3 billion by 2027.

In introducing the amendment, Senate Ways and Means chair Sen. Jill Tokuda said that removing the TAT split was “only fair given this is a City and County of Honolulu project and would not disproportionately impact the neighbor island counties.”

“Overall, this is a grand compromise. We’ve given the city more money up front and provides a pathway to do bonding,” said Senate Majority Leader, Sen. J. Kalani English. “Essentially, we’ve given the city a lot of tools to work with to finish the rail project without impacting the low-income and elderly citizens of our community through GET extensions or property tax increases.”

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