Hawaii State lawmakers have tentatively agreed today to increase the state hotel room tax to 12 percent (from its current 9.25 percent) beginning in January 2018 to raise $1.3 billion by 2027.
This would make funds more readily available than if the state were to extend the excise surcharge by a half percent, which currently is funding most of the project for mass transit rail.
Hawaii State Senator Donna Mercado Kim is questioning if this proposal is legal, as it was never put out for a public hearing – something required according to the state Constitution. The senator said input should be gathered from the public, which includes the tourism industry. Also, the bill is supposed to go through three readings, which it has not, making it a target for legal challenges.
House Finance Chairwoman Sylvia Luke said: “We’ve been told time and time again that the tourists should pay for the rail, and that’s what the mayor (Kirk Caldwell) has continued to say. That’s why today, we’re ensuring the elderly and working poor are not taxed anymore with this new proposal.”
If Senate Bill 1183 is approved by the House and Senate, it will then move forward to Hawaii Governor David Ige, who can either sign it into law, veto it, or allow it to become law without his signature.
Revenue from the increased hotel room tax would also fund an education program to the tune of $50 million year.