Mufi's Message, May 04th, 2018

40th Annual Visitor Industry Charity Walk! 

2018 Hawai‘i State Legislature Adjournment Sine Die
 
Yesterday officially marked the close of the 2018 Hawai‘i State Legislative Session, also known as adjournment sine die.  Both the State House of Representatives and the State Senate convened the final floor sessions of the 29th Hawai‘i State Legislature. During these floor proceedings, each respective chamber closed out any outstanding business for the year and voted on all remaining measures that made their way out of conference committee.  It was an interesting session at the State Capitol, especially during an election year, and one that was full of twists and turns for many measures.
 
Allow me to take this opportunity to apprise you on the status of HLTA’s priority issues.  First, let me begin by noting that 2018 marks the third year that the Hawai‘i State Legislature has missed the target on two major issues for the visitor industry: the establishment of an Airports Corporation and the taxation/regulation of transient vacation rentals (TVRs).  Regarding the Airports Corporation, the House did not agree with the Senate’s position to keep the procurement exemption in the bill’s language and pulled their conference conferees, which led to the measure being killed in committee. 
 
On the issue of TVRs, the House and Senate had conflicting approaches to the method on how the State should collect taxes from the short-term online rental market and the assistance to the counties’ enforcement efforts.  The visitor industry remained consistent in rallying behind the Senate’s version of the bill, which included comprehensive language seeking strict transparency, accountability, enforcement, and suitable penalties. House Bill 2605 HD2 SD2, which mirrored Senate Bill 2963 SD1, had passed out of the Senate with full support, but due to disagreements from the House, found itself also dead in conference committee.
 
I have said for some time now that if the State fails to deliver again , we will focus our energy on the county fronts , especially Honolulu . And a result of the State missing out on these millions of potential dollars , the Legislature has turned to other options to make up for the pukas in the State’s budget.  One such source of revenue that both houses agreed to this session is the implementation of the transient accommodations tax (TAT) on mandatory hotel resort fees despite our industry’s continuous opposition to this matter, Senate Bill 2699 now heads to the Governor for his signature and approval. Some key legislators felt that with all the records that are being broken on the tourism front in terms of visitors arrivals and spending , this fee increase would not hurt the  industry as much as we claimed. 
In the realm of legislative victories, we were able to implement legislation to appropriate matching state funds to homelessness programs, as well as defend our industry from additional attempts to further raise the cost of doing business.  
 
With homelessness a major priority for HLTA we have advocated, for the second year, for a measure that would allocate up to $1 million from the State’s general TAT fund to match private sector contributions to homelessness programs in tourism-impacted areas.  We are pleased these funds will be provided to the Hawai‘i Tourism Authority who, in conjunction with HLTA, will identify the programs and charitable organizations that can utilize these funds.  This language was inserted in what members have coined as the “HTA bill,” or House Bill 2010.  As this bill headed to conference committee, it sought to reduce responsibilities and funding to the HTA by nearly $22 million.  As I had stated in an earlier Mufi’s Message, our understanding was that the House would not allow for this decrease in funds. This was reflected in the conference committee’s decision to shave off a mere $3 million.
 
In addition to this big victory in funding homelessness, we would like to report that we were able to stave off a Transient Occupancy Tax increase to our timeshare partners. We also saw the controversial family leave bill shift from legislation to a study to be conducted by the Legislative Reference Bureau, a point that we openly expressed in our testimony. 
 
Lastly, this legislative session we were successful in eliminating language from Constitutional Amendment measure Senate Bill 2922 that would have granted the legislature the ability to establish a new surcharge, specifically targeted at the hotel and resort industry, to help fund public education.  SB2922 will now propose a ballot vote to the public to allow the legislature, as provided by law, the establishment of a surcharge on investment real property.  If the original language were adopted, the public would have been pressed to vote for the visitor industry shouldering yet another cost.
 
It has often been said throughout the halls of government that politics is the “art of compromise.” We will win some and we will lose some, but let us use this as a reminder of who our champions are as we head into the 2018 elections.  We send our mahalo to all of you who have engaged with our advocacy efforts this legislative session and we ask for your continued support . 
     
Kokua for Kaua‘i
 
As headlines fade, it is easy to forget that natural disasters have long-lasting ramifications. And though the Kauai flooding may have faded from the front page and our immediate view, we here at HLTA, and certainly those on Kauai, have not forgotten. The restoration efforts will take months, maybe years, and there are still many facing substantial damages - or in extreme cases, are houseless.  Once news broke, help from all over the state began pouring into Kauai, and none moreso than from the Kauai community itself.  Our industry partners from across the island have been more than generous, with thousands of dollars donated both via supplies and direct monetary donations. There is much more to be done, and we would like to do our part as well.  HLTA is proud to announce that we will be partnering with a local nonprofit group whom we’ve had a successful relationship with to directly benefit families from the hospitality industry who have been impacted by the floods. We are grateful to be in a position to help those in need, and look forward to updating you on our progress.