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House of Representatives Honored to Host French Legion of Honor Presentation to World War II 442nd Veterans

The Hawaii House of Representatives was honored today to host the presentation of the French Legion of Honor decoration to three Nisei veterans of US Army’s 100th Infantry Battalion, 442nd Regimental Combat Team for their service during World War II.

Rep. Mark M. Nakashima (from left), Futao Terashima, Vice Speaker Della Au Belatti, Dale Tateishi holding a photo of his father Tetsuo Tateishi, Harold Zenyei Afuso, and Rep. Scott Y. Nishimoto.

The veterans: Harold Aenyei Afuso, 442nd RCT, 2nd Battalion, H Company; Tetsuo Tateishi (posthumously) 442nd RCT, 100th Battalion, A Company; and Futao Terashima, 442nd RCT, 3rd Battalion, I Company; were presented their medals by Guillaume Manan, Honorary Consul of France in Hawaii.

“The House of Representatives and Speaker Scott K. Saiki are so happy that our chamber could serve as the venue to honor these brave men,” said Vice Speaker Della Au Belatti. “The Legion of Honor is France’s highest award and it recognizes the bravery and sacrifice that these men made to protect the freedoms that we enjoy today.”

The 100th Infantry Battalion, 442nd Regimental Combat Team was comprised of Japanese Americans, most of them from Hawaii. The men volunteered and fought in Europe during the war, becoming the most highly decorated unit in the history of the United States for its size and length of service.

Representatives Scott Y. Nishimoto and Mark M. Nakashima also attended the event and presented lei to the honorees.

Hawaii Senate Holds Special Session to Confirm Judiciary Appointments

A Special Session of the Hawai‘i State Senate is scheduled for September 25 – 26, 2017 to consider two judicial appointments for the Circuit Court of the Third Circuit – Hawai‘i Island.

On Wednesday, August 30, 2017, the Senate received two letters of appointment from Governor Ige naming current District Family Court Judge of the Third Circuit, Henry T. Nakamoto, to the Third Circuit Court (Hilo) and attorney Robert D. S. Kim to the Third Circuit Court (Kona). Both appointees were chosen by Governor Ige from a list of candidates selected by the Judicial Selection Committee.

Pursuant to Article VI, Section 3 of the Hawai‘i State Constitution, the Senate has 30 days from the date of the appointment to advise and consent on the two appointees. Therefore, the Senate will convene a two-day Special Session at 10:00 a.m. on Monday, September 25, 2017 to consider both appointments.

Informational Briefing on Hawaii’s Planned Response to Potential Regional Military Threats

In light of recent concerns regarding North Korean nuclear and missile tests, Senator Clarence Nishihara, Chair of the Senate Committee on Public Safety, Intergovernmental, and Military Affairs will be holding an Informational Briefing on contingencies and planned responses to potential regional military threats to the State on Thursday, September 21, 2017 from 10:30 a.m. – 12:00 p.m. in the State Capitol Auditorium.

Representatives from the Hawai‘i Emergency Management Agency will be providing a presentation on preparation and planning efforts being conducted between the counties and other Federal and State agencies and departments.
To view the hearing notice: http://www.capitol.hawaii.gov/session2017/hearingnotices/HEARING_PSM_09-21-17_INFO_.HTM

Notices to Women Regarding Access to Family Planning Services Must Be Allowed, State Argues

Yesterday the Department of the Attorney General filed a memorandum opposing an attempt by certain religiously-affiliated organizations to prevent a new law concerning women’s access to information regarding reproductive health services from being enforced. The law, Senate Bill 501 (2017), was passed by the Hawaii state legislature on May 4, 2017, and signed into law as Act 200 on July 12, 2017. It requires limited service pregnancy centers to notify women in writing regarding the availability of state-funded reproductive health services.

The Department’s memo argues that the Ninth Circuit Court of Appeals, the federal appeals court with jurisdiction over several Western states including Hawaii, already upheld a similar law passed by California in 2015.
The opposition memo states in part:

The Legislature has found that “[m]any women in Hawaii … remain unaware of the public programs available to provide them with contraception, health education and counseling, family planning, prenatal care, pregnancy-related, and birth-related services.” To address this concern, [Act 200] was enacted into law. It requires “limited service pregnancy centers,” as defined in the Act, to disseminate a written notice to clients or patients informing them that Hawaii has public programs that provide immediate free or low-cost access to comprehensive family planning services.

A similar filing was made in a related case yesterday as well.

Hawaii Senate Adjourns Special Session

Members of the Hawai‘i State Senate adjourned Special Session today after the House of Representatives passed Senate Bill 4 to provide funding for the completion of the City and County of Honolulu’s rail transit project and bills to approve collective bargaining costs.

During this Special Legislative Session, as part of its constitutionally mandated duties, the Senate considered for advise and consent and approved a total of 50 gubernatorial appointments to 34 boards and commissions and one deputy director position.

Among those confirmed this week:

  • James Griffin, to the Public Utilities Commission
  • Douglas Shinsato to the U.H. Board of Regents
  • Robert Masuda as Deputy to the Chairperson of the Department of Land and Natural Resources
  • Marcus Oshiro as the Chairperson and Representative of the Public of the Hawai‘i Labor Relations Board

A complete list of actions taken during the Special Legislative Session can viewed at capitol.hawaii.gov.

Hawaii House Passes Rail Funding Bill in Special Session

The Hawaii House of Representatives voted in Special Session today to pass Senate Bill 4 to fund the City’s $8.2 billion rail project. The vote was 31 yes, 15 no and five excused.

The Senate passed the measure on Wednesday. The bill now goes to Governor David Ige for his consideration.

The bill will provide about $2.39 billion to complete construction of the rail project to Ala Moana and provide a secure funding source to ensure continued federal support.

House Speaker Scott K. Saiki (Kakaako, Downtown) said after passing this funding bill, it is now up to the City to manage the project in a way that is both accountable to the taxpayers and completed within its budget.

“The legislature has taken on the responsibility of finding a way to fund rail and to secure federal funding,” Saiki said. “I want to thank our lawmakers for working together to reach this compromise.”

The bill will:

  • Extend the general excise tax surcharge on Oahu for three additional years, from December 31, 2027 through December 31, 2030. This will provide $1.25 billion.
  • Raise the hotel room tax charged to visitors (Transient Accommodation Tax) by one percent from 9.25 percent to 10.25 percent for 13 years, from January 1, 2018 to December 31, 2030. This also applies to timeshares. This will provide $1.25 billion.
  • The hotel room tax is collected statewide and goes directly into the general fund, not to the island where it is collected. Each county receives an allocated proportional share of the tax regardless of total amounts collected. Raising the tax does not change that amount.
  • Permanently increase the counties share of the TAT from its current $93 million base to $103 million.
  • Reduce the State Department of Taxation’s administrative fee on the GET surcharge from 10 percent to one percent.
  • Require a state run forensic audit of the rail project and annual financial reviews.

The bill also provides that funds collected for rail go into a new Mass Transit Special Fund and rather than simply give the money to the City, and requires the State Comptroller to certify HART’s invoices for capital costs as the project moves forward. This will allow the state to keep track of both spending and construction progress.

This bill addresses the immediate rail construction shortfall by collecting funds upfront through a small TAT increase instead of adding additional years of GET surcharge on the back end. This will reduce the financing costs of the project by hundreds of millions of dollars.

A rail bill that relies solely on GET will continue to tax the poor and increase the cost to taxpayers in the long term. By substantially relying on the TAT, visitors will now bare a significant portion of the financing burden.

Rep. Sylvia Luke (Pauoa, Punchbowl, Nuuanu), Chair of the House Finance Committee, said careful thought and consideration went into this bill.

“After hearing testimony from city officials, neighbor island residents and the public, we looked in detail at how to fund rail while creating the least amount of increase on our taxpayers,” Rep. Luke said.

Rep. Henry Aquino (Waipahu) said it is important to support the rail project to relieve traffic congestion for West Oahu residents.

“This bill is a compromise that provides the funds to get rail built. When completed, rail will be a great relief for the thousands of people stuck in traffic every day,” Rep. Aquino said. “This bill not only provides much needed oversight on spending by the State Comptroller, it also mandates accountability though audits and financial reviews.”

House Transportation and Finance Committees Pass Rail Funding Bill

The House of Representatives committees on Transportation and Finance today passed SB4, a critical step in moving the bill forward to provide the funds needed to complete the City’s rail project.

Senate Bill 4 Report Title:  County Surcharge on State Tax; Extension; Transient Accommodations Tax; Appropriations:

Authorizes a county that has adopted a surcharge on state tax to extend the surcharge to 12/31/2030. Authorizes a county to adopt a surcharge on state tax before 3/31/2018, under certain conditions. Decreases from 10% to 1% the surcharge gross proceeds retained by the State. Allows the director of finance to pay revenues derived from the county surcharge under certain conditions. Clarifies uses of surcharge revenues. Establishes a mass transit… (See bill for full description.)

Stakeholders and the public testified at the State Capitol today including City, State and HART officials before both committees voted to pass the bill. Transportation voted 4 to 2 in favor with one excused, and Finance voted 8 to 6 in favor of the bill with one excused.

Transportation members voting yes were: Henry Aquino, Nadine Nakamura, Joy San Buenaventura (with reservations), and Bob McDermott. Voting no were: Sean Quinlan and Tom Brower. Mark Hashem was excused.

Finance members voting yes were: Sylvia Luke, Ty J.K. Cullen, Cedric Asuega Gates, Daniel Holt, Jarrett Keohokalole, Matt LoPresti, Nadine Nakamura and Kyle Yamashita. Voting no were: Romy Cachola, Bertrand Kobayashi, Lynn DeCoite, Nicole Lowen, Andria Tupola and Gene Ward. Beth Fukumoto was excused.

The bill contains two funding mechanisms: a three-year extension of the 0.5 % GET surcharge on Oahu and a 13-year 1% increase in the TAT statewide. This bill ensures that the City’s rail project will be sufficiently funded and reaches Ala Moana.

Finance Committee Chair Sylvia Luke said the bill also mandates accountability for hard-earned taxpayer money.

“This bill will provide enough money to fund the City’s rail project to Ala Moana and require the City to be transparent about how they are spending that taxpayer money,” Rep. Luke said.

The bill provides accountability by requiring a state-run audit and annual financial reviews of the rail project, and requires the State Comptroller to certify HART’s invoices for capital costs. The bill also requires the Senate President and the House Speaker to each appoint two non-voting, ex-officio members to the HART board of directors.

Transportation Committee Chair Henry Aquino said not depending solely on the GET to fund rail will save taxpayer money.

“By adding the hotel room tax to the mix, which provides and immediate cash flow to the project, we are saving taxpayers hundreds of millions of dollars that would be spend on financing fees,” Rep. Aquino said.

The bill now moves to the full House for a vote on second reading tomorrow.

Senate Roll Call – Who Voted for What When It Came Down to the Rail

Today at the Hawaii State Capitol Building in Honolulu, the Senate voted 16-9 in favor of moving Senate Bill 4 over to the House of Representatives.

Senate Bill 4 Report Title:  County Surcharge on State Tax; Extension; Transient Accommodations Tax; Appropriations:

Authorizes a county that has adopted a surcharge on state tax to extend the surcharge to 12/31/2030. Authorizes a county to adopt a surcharge on state tax before 3/31/2018, under certain conditions. Decreases from 10% to 1% the surcharge gross proceeds retained by the State. Allows the director of finance to pay revenues derived from the county surcharge under certain conditions. Clarifies uses of surcharge revenues. Establishes a mass transit… (See bill for full description.)

Many folks were wondering who voted yes and no on moving this bill forward and I was able to obtain the following roll call sheet from today’s hearing and for what it’s worth… all four Big Island Senators voted against moving this bill forward:

Hawaii Senate Passes Rail Bill

Members of the Hawai‘i State Senate today passed Senate Bill 4 on third reading by a vote of 16-9 to provide funding to complete construction on the City and County of Honolulu’s rail transit project.

SB4 addresses the City and County of Honolulu’s rail construction shortfall of $2.378 billion by extending the General Excise Tax on Oahu for three additional years through December 31, 2030 which will provide $1.046 billion. It also raises the Transient Accommodation Tax (TAT) by one percent to 10.25 percent for 13 years, to December 31, 2030. This will provide $1.326 billion. SB4 permanently increases the counties’ share of the TAT from $93 million to $103 million. The measure reduces the State Department of Taxation’s administrative fee on the GET surcharge from 10 percent to one percent. The measure creates a Mass Transit Special Fund to review and disburse funds to the city for its costs on the rail project. It also requires a state run audit of the rail project and annual financial reviews.

SB4 now crosses over to the House for their consideration.

A complete schedule of the hearings can be viewed at www.capitol.hawaii.gov

Hawaii Lawmaker Elated With the Establishment of the Health and Human Services Committee

Representative John Mizuno (D-Kalihi, Kamehameha Heights), was confirmed today as the first Chairman of the newly combined committees of Health and Human Services through the passage of House Resolution 4 and 5. The resolutions amend the standing committees and committee assignments, and the Rules of the House of Representatives of the Twenty-Ninth Legislature of the State of Hawaii to Establish the Committee on Health and Human Services.

Rep. John Mizuno

“I am humbled by the passage of House Resolutions 4 and 5 and for the kind assignment and trust displayed by Speaker Scott K. Saiki, the leadership team and the caucus members to place me as the Chairman of the newly established Committee on Health and Human Services,” said Rep. Mizuno. “I am extremely thankful for the opportunity to Chair the combined committee and I anticipate a substantial workload for the upcoming 2018 session. With issues such as homelessness, possible cuts in Medicaid funding from the Federal government, compassionate care for our elderly and disabled, and a focus to be more efficient in the entire healthcare system in Hawaii, this will be an opportunistic 2018 session.”

“I will do my best to display careful, thorough thought in drafting sound policy and hearing good Legislation, which is congruent to Speaker Saiki, our leadership team, the majority caucus, as well as the GOP and the people of Hawaii. I look forward to a fruitful 2018 legislative session.”

Governor Nominates Representative Marcus Oshiro to the Hawaii Labor Relations Board 

Gov. David Ige today announced that he has nominated State Rep. Marcus Oshiro (D-House District 46) to the Hawaii Labor Relations Board as Chairperson and Representative of the Public. Oshiro will be completing the term left vacant by the resignation of Kerry Komatsubara, which ends June 30, 2018, and he is also being appointed for a six-year term which ends June 30, 2024.

State Rep. Marcus Oshiro

“Marcus is a respected leader who knows and understands the issues, and he has the background and experience to step right in to fill this very important role,” said Gov. Ige. “This will be a new opportunity for him to use his talent and skills on behalf of the public, and I have every confidence in him.”

“I am humbled by Gov. Ige’s nomination to serve as the chairperson of the Hawaii Labor Relations Board. With the Senate’s approval, I look forward to ensuring our labor laws are applied fairly and consistently with the principles of collective bargaining in promoting the harmonious and cooperative relations between the parties.”

Oshiro has served in the State House of Representatives since being elected in 1994. He is a former vice speaker, majority leader, and is past-chair of the committees on finance and labor. He is an active member of the community,

Oshiro earned his Juris Doctorate at Willamette University College of Law after completing his undergraduate work at the University of Hawaiʻi at Mānoa. He is a graduate of Leilehua High School.

Both nominations to fill Komatsubara’s term and to the additional six-year term are subject to Senate confirmation.

Mayor Harry Kim Opposed to Permanent Cap on Counties’ Transient Accommodation Tax


Testimony by Harry Kim, Mayor, County of Hawai’i before Senate Ways & Means Re: SB 4:

The County of Hawai’i opposes the permanent cap on the counties’ share of the Transient Accommodation Tax (TAT). This cap is unnecessary to achieve all other aspects of the bill to finance Honolulu’s rail. The bill proposes to finance rail by extending the General Excise Tax (GET) surcharge period to 12/31/2030, increasing the share of the surcharge that goes to rail by decreasing the administrative charge retained by the State, and increasing the TAT rate by 1% and dedicating all of that increase to rail. There is no reason related to rail financing to cap the share of the TAT to the counties.

A cap on the counties’ TAT share is contrary to the Legislature’s own working group report and the original intent of the TAT tax summarized as follows:

  • Working Group Recommendation. The working group recommended the Tourism Special Fund receive $82 million in FY 2016 and increase in subsequent years in line with the Consumer Price Index for Honolulu, $31 million constant for the Convention Center-Turtle Bay-Special Land Develop Fund, and the remainder split between the State and counties at 55% for the State and 45% for the counties. Based on total TAT revenues in 2016 of $444 million, the $103,000,000 cap represents 31% of the remainder of the TAT after allocations to the Tourism Special Fund ($82 million) and the Convention Center-Turtle Bay-Special Land Development Fund ($33 million). As a result of the cap, the counties’ share will only get worse as tourism grows.
  • Nexus to Tourism Services. The incidence of the TAT is primarily on visitors, so the TAT tax revenues should fund public services which benefit visitors. The UH Economic Research Organization (UHERO) estimated that the counties pay for 53% of the services for which visitors directly benefit (UHERO Working Paper No. 2016-4). These services include police and fire protection, rescue, parks, beaches, water, roads, and sewer systems.
  • Act 185 (1990). Recognizing that “many of the burdens imposed by tourism falls on the counties,” the legislature created the TAT as a “more equitable method of sharing state revenues with the counties” (Conference Committee Report 207 on HB No. 1148). The legislature deemed at that time that the fair allocation was 95% of the total TAT revenues to the counties.

The State has multiple sources of revenues. The counties only have property tax, motor vehicle weight tax, and public utility franchise tax. Our out-of-control homeless problems are a symptom of the soaring cost to rent or own a home in Hawai’i. And you want to offer us the power to increase the GET tax, the most regressive form of taxation that impacts the lower income the greatest. We already had to increase our property tax to make ends meet. With the collective bargaining decisions dominated by the State, we again will face possible increases. We ask only for our fair share as recommended by the Working Group, to maintain quality services that uphold the tourism industry and affordability for our people.

Hawaii House of Representatives Adopt Resolution Formalizing New Committee Assignments

The Hawaii House of Representatives today adopted a resolution formalizing new committee assignments.

The new committee assignments are part of a broader House reorganization and administrative housekeeping that naturally follows from the change in Speaker at the end of the 2017 regular session.

There were more than 50 of changes made to committee assignments based on:

  • Member requests;
  • Changes to caucus;
  • GOP caucus asking for changes; and
  • Committees reorganized.

Committee assignments are as follows:

Agriculture

Chair Richard P. Creagan
Vice Chair Lynn DeCoite

Cedric Asuega Gates
Kaniela Ing
Matthew S. LoPresti
Calvin K.Y. Say
Gregg Takayama
Cynthia Thielen

Consumer Protection & Commerce

Chair Roy M. Takumi
Vice Chair Linda Ichiyama

Henry J.C. Aquino
Ken Ito
Aaron Ling Johanson
John M. Mizuno
Calvin K.Y. Say
Chris Todd
James Kunane Tokioka
Ryan I. Yamane
Bob McDermott

Economic Development & Business

Chair Mark M. Nakashima
Vice Chair Jarrett Keohokalole

Sharon E. Har
Daniel Holt
Linda Ichiyama
Aaron Ling Johanson
Kyle T. Yamashita
Lauren Kealohilani Matsumoto

Education

Chair Justin H. Woodson
Vice Chair Sharon E. Har

Richard P. Creagan
Mark J. Hashem
Kaniela Ing
Sam Satoru Kong
Angus L.K. McKelvey
Takashi Ohno
Rickard H.K. Onishi
Sean Quinlan
Lauren Kealohilani Matsumoto

Energy & Environmental Protection

Chair Chris Lee
Vice Chair Nicole E. Lowen

Ty J.K. Cullen
Sam Satoru Kong
Angus L.K. McKelvey
Ryan I Yamane
Bob McDermott

Finance

Chair Sylvia Luke
Vice Chair Ty J.K. Cullen

Romy M. Cachola
Lynn DeCoite
Beth Fukumoto
Cedric Asuega Gates
Daniel Holt
Jarrett Keohokalole
Bertrand Kobayashi
Matthew S. LoPresti
Nicole E. Lowen
Nadine K. Nakamura
Kyle T. Yamashita
Andria P.L. Tupola
Gene Ward

Health & Human Services

Chair John M. Mizuno
Vice Chair Bertrand Kobayashi

Della Au Belatti
Marcus R. Oshiro
Chris Todd
Andria P.L. Tupola

Higher Education

Chair Angus L.K. McKelvey
Vice Chair Mark J. Hashem

Richard P. Creagan
Sharon E. Har
Kaniela Ing
Sam Satoru Kong
Takashi Ohno
Richard H.K. Onishi
Sean Quinlan
Justin H. Woodson
Lauren Kealohilani Matsumoto

Housing

Chair Tom Brower
Vice Chair Nadine K. Nakamura

Henry J.C. Aquino
Mark J. Hashem
Sean Quinlan
Joy A. San Buenaventura
Bob McDermott

Intrastate Commerce

Chair Takashi Ohno
Vice Chair Isaac W. Choy

Romy M. Cachola
Beth Fukumoto
Ken Ito
Richard H.K. Onishi
James Kunane Tokioka
Justin H. Woodson
Gene Ward

Judiciary

Chair Scott Y. Nishimoto
Vice Chair Joy A. San Buenaventura

Tom Brower
Chris Lee
Dee Morikawa
Mark M. Nakashima
Marcus R. Oshiro
Gregg Takayama
Bob McDermott
Cynthia Thielen

Labor & Public Employment

Chair Aaron Ling Johanson
Vice Chair Daniel Holt

Sharon E. Har
Linda Ichiyama
Jarrett Keohokalole
Mark M. Nakashima
Kyle Yamashita
Lauren Kealohilani Matsumoto

Legislative Management

Chair Bertrand Kobayashi
Vice Chair Della Au Belatti

Isaac W. Choy
Cindy Evans
Dee Morikawa
Andria P. L. Tupola

Ocean, Marine Resources & Hawaiian Affairs

Chair Kaniela Ing
Vice Chair Cedric Asuega Gates

Richard P. Creagan
Lynn DeCoite
Matthew S. LoPresti
Calvin K.Y. Say
Gregg Takayama
Cynthia Thielen

Public Safety

Chair Gregg Takayama
Matthew S. LoPresti

Richard P. Creagan
Lynn DeCoite
Cedric Asuega Gates
Kaniela Ing
Calvin K.Y. Say
Cynthia Thielen

Tourism

Chair Richard H.K. Onishi
Vice Chair Beth Fukumoto

Romy M. Cachola
Isaac W. Choy
Ken Ito
Takashi Ohno
Justin H. Woodson
Gene Ward

Transportation

Chair Henry J.C. Aquino
Vice Chair Sean Quinlan

Tom Brower
Mark J. Hashem
Nadine K. Nakamura
Joy A. San Buenaventura
Bob McDermott

Veterans, Military & International Affairs & Culture and the Arts

Chair Ken Ito
Vice Chair James Kunane Tokioka

Romy Cachola
Isaac W. Choy
Beth Fukumoto
Takashi Ohno
Richard H.K. Onishi
Justin H. Woodson
Gene Ward

Water & Land

Chair Ryan I. Yamane
Vice Chair Sam Satoru Kong

Ty J.K. Cullen
Chris Lee
Nicole E. Lowen
Angus L.K. McKelvey
Cynthia Thielen

Big Island Workshops on the Legislature – Make Your Voice Heard

You can add your voice at the State Capitol! Tell legislators what you want them to focus on when Regular Session begins in January and be ready to offer your testimony when things get rolling. To help, the Legislature’s Public Access Room (PAR) is offering “Your Voice,” a free 1- hour workshop at numerous locations on the Big Island.

Topics include understanding the legislative process, deadlines, and power dynamics, as well as tips on effective lobbying, testifying, and communicating with Senators and Representatives. “How-To” guides, informational handouts, and other resources will be available.

“Your Voice” – Free One-hour Workshops:

  • Mon Sept 11 6:00 p.m. Kailua-Kona – West Hawai’i Civic Center Community Hale; 74-5044 Ane Keohokalole Highway
  • Tue Sept 12 6:00 p.m. Waimea- Thelma Parker Memorial Library; 67-1209 Mamalahoa Highway
  • Wed Sept 13 5:30 p.m. Hilo Public Library; 300 Waianuenue Ave.
  • Thu Sept 14 5:30 p.m. Pahoa Community Center; Kauhale Street

For additional information, or to ask about additional workshops during this visit, contact PAR ─ 808/587-0478 or par@capitol.hawaii.gov.

Discussion of Issues Relating to Special Session on Rail Funding, By Chairman of Maui’s County Council

The Chairman for the Maui County Council, Mike White, sent me the following document entitled “Discussion of Issues Relating to Special Session on Rail Funding:”


Mike White, Chairman of Maui County Council

Both the Hawaii State Association of Counties (HSAC) and the Hawaii Council of Mayors (HCOM) stand in support of the position to fund rail by extending the .5% GET surcharge.

  • The Proposal extends the GET surcharge for just three years to 2030.
  • The $1.3 billion raised by the TAT increase would be unnecessary if the GET was extended through 2033. The 3 additional years of surcharge would generate the same $1.3 Billion.
  • If the use of TAT fails the stress test of the Federal Transit Authority and is disqualified as a source to fund rail, will the TAT increase be reversed?

The promise to make permanent the $103 million to the Counties is questionable.

  • The Legislature’s history on keeping promises is weak. We all know that any action taken by today’s body can be reversed in any future session.
  • There was a promise that the 2% increase in TAT after the recession in 2008 would sunset after 5 years. It is not likely it will ever sunset.
  • The $103 million to the Counties still falls short in terms of the Counties being awarded their fair share.

There was hope that the recommendations of State-County Working Group would be taken seriously

  • The Counties’ share of the TAT would have been $184 million this past year if the legislature accepted the findings of the working group they established.
  • The working Group found that Counties provided 56% of visitor related expenditures from State or County general funds
  • Counties were willing to accept the lower 45% share compromise reached in the working group.
  • The Legislature has ignored the Working Group findings, maintained the cap and taken all of the increased revenue.

The State has already grown their share of the TATsignificantly.

  • TheState has increased its share of TAT from $17.1 million to $291.1 million since 2007
  • Since then the Counties share has dropped to $93 million, a loss of $7.8 million
  • The cost of Police, Fire and Parks departments in the four counties has increased by $264 million while Counties share has been reduced.
  • Without a rate increase State share will likely increase to $326 million in FY2018
  • With a 1% rate increase, State share will likely increase by another $58 million to $384 million.

Distribution to Local governments of taxes generated from Lodging Revenues

  • Nationwide, taxes on lodging have been established to cover the cost of services and infrastructure needed to support the visitors.
  • Nationwide, 67% of ALL taxes (GET & TAT) on Lodging revenue go to the local government.
  • In Hawaii, only 14% of GET & TAT generated is given to local Governments
  • The Hawaii TAT accounts for about 68% of the taxes on lodging. If we were to get the Average Local government share we would get almost all of the current TAT revenue.

Hawaii is not the only small state with large expenditures on Education and other government functions, but tax distribution is very different.

  • With similar populations to Hawaii, state expenditures on education in West Virginia and Idaho are close to Hawaii’s.
  • When Hawaii spent $1.6 billion or 23% of its General Fund (GF) on education, Idaho spent $1.6 billion (51% of GF)and West Virginia spent $1.9 billion (43% of GF) on education.
  • West Virginia has a 6% state sales tax and a 6% room tax (TAT)on lodging revenue. All proceeds from the 6% room tax go to the local government.
  • Idaho also has a 6% state sales tax and authorizes local government to impose “local option” taxes on lodging accommodations, drinks by-the-glass, retail sales, etc. The total taxes in resort areas appear to be about 12%. The state receives the 6% sales tax and the local government receives the rest.
  • This type of comparison deserves a closer look if we hope to bring a stronger sense of “partnership” to the relationship between our state and counties.

Our Legislators push the counties to increase property taxes instead of asking for more TAT.

  • Hawaii has lower property tax rates, but significantly higher home values.
  • Hawaii’s median home value is 5 times higher than West Virginia and three time higher than Idaho.
  • Even with lower rates, the average tax on the median home value is $1,430 in Hawaii vs $1,250 in Idaho and $660 in West Virginia.
  • Hawaii property taxes represent 2.1% of median household income. This compares to 2.6% in Idaho and 1.5% in West Virginia.

Neighbor Islands are again being offered the opportunity to pass the same .5% GET Surcharge for our transportation needs.

  • The concern that the neighbor islands have had for years is that once we pass the GET surcharge, the Legislature will take away ALL of our TAT revenue.
  • Some of us have been told directly over the years that this is their intension.
  • The Neighbor Islands favor keeping a visitor-generated TAT to pay for visitor–related services. It makes no sense to shift the cost of visitor services to our resident population through either GET or property taxes when the visitors have already paid their fair share.
  • The GET generated by the .5% surcharge would be just slightly higher than the amount of TAT we are currently getting.

Impact of TAT on Neighbor Islands

  • Oahu occupancy rates are 10 points ahead of Maui, 13 ahead of Kauai and nearly 20 points ahead of Big Island
  • From CY 2006 to CY 2016, Oahu GET base grew by 15% while Neighbor Islands remain below 2006 levels
  • One percent increase in TAT would remove over $30 million from our Neighbor Island communities and economies.

State should work on ensuring all TAT taxing options and compliance issues are addressed before simply increasing the rate

  • The State is not receiving a significant portion of the TAT revenue even though the visitors are paying the TAT or an equivalent.Amend TAT statute to ensure collection of taxes from accommodation remarketers instead of just operators.  Maui County has drafted a bill to correct the problem, and it will likely be part of the HSAC package. $60-80 million in added revenue.
  • Increase the basis of the calculation of TOT on Timeshares from 50% of maintenance fee to a higher percentage.
  • Work with Counties to ensure vacation rentals are operating legally and paying both State and county taxes. Maui County will be contracting with internet service that will identify location and ownership of rentals being advertised on the internet.
  • Instead of TAT, evaluate a Rhode Island-type 1% tax on food and beverages consumed at restaurants, bars and hotels. Restaurant Association estimates the Hawaii base at $4.6 billion. $46 million in added tax revenue

Tax Review Commission recommendations would increase revenues by over $300 million per year

  • Not all the recommendations are popular
  • Sugary beverage tax of $.02 per ounce – $50 million
  • Increase collection of taxes on e-commerce/online retail sales – $30-40 million

Mike White,
Maui County Council Chairman

Information for 2017 Hawaii Legislature Special Session – How to Submit Testimony

The Legislature’s webmasters have set up a webpage for information on the 2017 Special Session called for Monday, August 28th. It can be found here: http://www.capitol.hawaii.gov/splsession.aspx?year=2017a.

This is where you’ll find links to the rail transit funding bill, “SB1 Relating to Transportation Financing”, and the notice for Monday’s 11:30 a.m. 3:00 p.m. WAM hearing (link to hearing notice). The hearing notice lists special email addresses for submitting your testimony.

Note: The hearing will be broadcast on Olelo on channel 49, will go out live to neighbor island PEG access TV channels, and can be viewed live online on the Senate webcasts page (http://olelo.granicus.com/ViewPublisher.php?view_id=13).

It appears that a number of nominations subject to Senate confirmation will also be considered during the Special Session, as numerous Governor’s Messages appear on the Special Session page.

Any subsequent hearing notices will also appear on the 2017 Special Session webpage.

Please don’t hesitate to contact the Public Access Room (PAR) with any questions.

President of Hawai’i Island Chamber of Commerce Statement on Pending Special Session on Honolulu Rail Project

Hawai‘i Island State Representatives and Senators

Re: Honolulu Area Rapid Transit system funding

Dear Representatives and Senators,

From August 28 to September 1 the Hawai‘i Legislature will be in session to assist the City and County of Honolulu with the capital for funding the Honolulu Area Rapid Transit system. We thank you for this opportunity to voice our concern and opinion in this matter.

We understand that the Legislature will be considering proposals including:

  • Maintaining the current general excise tax (“GET”) rate premium for applicable Oahu transactions through 2037.
  • Increasing the transient accommodations tax (“TAT”) rate for applicable services on Oahu.
  • Increasing the TAT rate for applicable services on all islands
  • Assessing premium GET taxes on a statewide basis.

The Hawai‘i Island Chamber of Commerce strongly recommends funding the capital shortfall for the Honolulu Area Rapid Transit system by extending the GET for transactions in the City and County of Honolulu only. We note the following:

  • Uncomfortable as it is to point out, the shortfall is primarily the result of management decisions made by an agency of the City and County of Honolulu. Neighbor islands were not part of either the management or the process. Asking the residents and visitors of the neighbor islands to pay for this process gone awry is not reasonable. Services provided by HART will be provided only on Oahu benefitting primarily Oahu residents and not the residents of the neighbor islands. We believe any impact should be borne by the future users of HART.
  • A major argument against simply allowing the GET on Oahu to continue is that this tax is regressive. However, this argument glosses over several economic realities that businesses face every day. Taxes of any kind increase the total price paid by the buyer. Higher prices for any good or service result in some level of reduced demand – if not for that service, for other services where those dollars may have been spent:
  1. While we do not know the number of travelers who will choose not to travel to Hawaii because of a higher TAT – there is no doubt that at the margin some will choose not to come here or to delay a trip.
  2. Some of those who do come will find that they must curtail their spending while here in order to stay within their budget.

In either of these cases, the dollars spent on goods and services in Hawaii will be reduced. The ripple effect of reduced spending will be a reduction in employee hours (and jobs) absorbed almost exclusively by employees at the lowest rung on the employment ladder. In short, these employees will suffer by losing income much more dramatically than they would if the current 0.5% premium in GET taxes is maintained on Oahu.

Beyond this, there is the simple equity issue. Should we be charging those who have no vote (tourists) for services that they are not likely to use – simply because they have no vote? This is not the right decision.

  • Finally, the City and County of Honolulu – most affected by Rail – has stated firmly that its choice is to fund by extending the GET through 2037. If that is their choice, it is not clear to us why we should over reach to further manage their decision.

Sincerely,
Bill Walter, President

Cover Sheet to Pending Rail Bill to Be Voted On

Here is the cover sheet of the Senate version of the rail bill that Hawaii Legislators will be voting on during the upcoming session on the Honolulu Rail Transportation Project.

It basically calls for:

  • 3 Year General Excise (GE) surcharge extension on Oahu
  • 1% Transient Accommodation Tax (TAT) Statewide (Increase hotel tax on all islands for everyone)
  • $103 million TAT to the Counties to be made permanent.

I should re-poll those that refused to answered my survey because they said they haven’t seen the bill, and ask them if they are now voting YES or NO on increasing the TAT Statewide… but I simply don’t have the time!

Representative Mark Nakashima’s Response to Questions on Special Session on Honolulu Rapid Transit System

Representative Mark Nakashima

Dear Mr. Tucker:
Thank you for your recent email expressing your interest in the up-coming special session on the Issue of Honolulu’s rail system.  Please be assured that I share your concern.  As you know, the decision by the Hawaii Legislature was made before I joined the body, and I believe that questions regarding the state’s commitment to the program as well as other issues regarding the design have already been made.

The House of Representatives voted on the last day of the 2017 Regular Session on an amendment agreed to by with our Senate colleagues on an amendment that would have increased the Transient Accommodation Tax (TAT) by 1% for eleven years, extended the 0.5% General Excise Tax (GET) surcharge on Oahu for an additional year until 2028, restored $10 million to the county’s portion of the TAT allocation, and create a special fund for education.  Unfortunately, this agreement was not agreed to by the Senate as a whole and the bill died for lack of agreement.

One of the major rationales supported by the City and County of Honolulu for using the GET was the fact that approximately 30% of this cost was borne by visitors who paid the GET during their stay in the islands.  The TAT or hotel room tax is paid only by hotel guests while staying in a hotel room, and as such, the vast majority of this revenue would be paid by visitors with the exception of the local residents travelling inter-island and staying in a hotel.

Much has been said bout not wanting to pay for a project on another island, however I think many people miss the point that the City and County of Honolulu pays the vast majority of GET which then subsidizes the state hospitals and neighborhood schools – a system which work on a group of island where the vast differences in real property tax incomes would otherwise cause great inequities from island to island.

I regret that I will not participate in speculation on the final form of the bill to be considered the legislature until one has been written, as percentages and duration becomes meaningless until I am able to see the justification and rationale for these positions.

Finally, I will reiterate that only people who stay in hotel rooms pay the TAT.  Most residents will never pay this tax.  Everyone in Hawaii pays the GET.

Aloha and Best Wishes.

Sincerely,
Mark Nakashima
District 1


Aloha Rep. Nakashima,
Mahalo for representing the Big Island in legislative issues. I have some questions for you folks and hope you will respond to me by Wednesday, August 23rd, 2017
Questions:
1. Will you vote YES or NO on a 1% STATEWIDE increase to the Transient Accommodations Tax (9.25% to 10.25%) to help fund the Honolulu Rapid Transit System in the upcoming legislative special session?
If your answer is YES, please explain why? If your answer is NO, please explain why?
2. Would you support a 6 year extension of the Honolulu General Excise Tax Surcharge of 0.5% from 2027 to 2034 if this will help fully fund the Honolulu Rapid Transit System without raising the Transient Accommodations Tax STATEWIDE?
YES or NO
3. Would you support an increase of the Honolulu General Excise Tax Surcharge of 0.5% to 0.62% and a 3 year extension of the Honolulu General Excise Tax Surcharge from 2028 to 2030 if this will fully fund the Honolulu Rapid Transit System without raising the Transient Accommodations Tax STATEWIDE?
YES or NO
Thank you for your participation in this quick and important decision that will affect all of us on this island.

Representative Nicole Lowen’s Response to Questions on Special Session on Honolulu Rapid Transit System

Representative Nicole Lowen

Damon,
I can’t give a yes or no answer about my vote on a bill that I haven’t seen yet, but I appreciate your concern about this and I intend to keep the interests of the Big Island and of my constituents at the forefront. I will be advocating to increase the share of TAT to the counties and for a bill that is in the best interests of taxpayers in my district and across the state.

Mahalo,

Nicole Lowen

——————-

Aloha Rep. Lowen,

Mahalo for representing the Big Island in legislative issues. I have some questions for you folks and hope you will respond to me by Wednesday, August 23rd, 2017
Questions:
1. Will you vote YES or NO on a 1% STATEWIDE increase to the Transient Accommodations Tax (9.25% to 10.25%) to help fund the Honolulu Rapid Transit System in the upcoming legislative special session?
If your answer is YES, please explain why? If your answer is NO, please explain why?
2. Would you support a 6 year extension of the Honolulu General Excise Tax Surcharge of 0.5% from 2027 to 2034 if this will help fully fund the Honolulu Rapid Transit System without raising the Transient Accommodations Tax STATEWIDE?
YES or NO
3. Would you support an increase of the Honolulu General Excise Tax Surcharge of 0.5% to 0.62% and a 3 year extension of the Honolulu General Excise Tax Surcharge from 2028 to 2030 if this will fully fund the Honolulu Rapid Transit System without raising the Transient Accommodations Tax STATEWIDE?
YES or NO
Thank you for your participation in this quick and important decision that will affect all of us on this island.