Hawaii counties receive $10M injection from annual hotel tax revenue

In a major decision, Hawaii's four counties will receive an additional $10 million in annual hotel tax revenue under a plan state lawmakers approved.

According to the Greenfield Daily Reporter, all four of these counties had their shares capped at $93 million since 2011. These counties have sought a return to splitting 44.8 percent of the state's transient accommodation taxes, which took place prior to 2011. This would bring in an estimated $72 million more for the counties in 2015.

Of the $10 million bump, Honolulu will get $4.4 million, Maui County will get $2.3 million, Hawaii County will receive $2 million and Kauai County will get $2 million.

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Hawaii News Now reported that state lawmakers decided to raise the cap on tax collections rather than revive the bygone sharing structure in place prior to 2011. Rep. Tom Bower, a Democrat representing Waikiki and Ala Moana, told HNN the bill will also be used to provide funding for a study on how visitors to Hawaii use county resources. Future raises to the tax allotment may potentially require the counties demonstrate their effective use of the money and how it will be used to pay for operations by way of visitor funds.

Maui County Mayor Alan Arakawa issued a statement saying that the extra hotel tax funds, paired with some budget cuts, will reduce the need for an increase in property taxes in 2015. According to West Hawaii Today, Arakawa proposed property tax increases previously that averaged out to a 6.5 percent overall hike.

The $10-million bump still leaves Honolulu looking at other ways to fund its $2.1-billion operating budget, including possible property tax increases.