It is a sad day when Democrat lawmakers shift the burden of closing a projected $2 billion revenue gap in our state budget to Hawai’i’s families and businesses. Yet, in voting to increase taxes, this is exactly what they’ve done.
At a time when a staggering number of residents are out of work and many businesses are shutting down or on the verge of doing so, legislators have essentially said to the people of Hawai’i, “Sorry, but we need more money.”
In contrast, Gov. Linda Lingle has laid out a responsible and fair plan to close the budget gap without tax increases or layoffs. Unfortunately, most Democrat legislators chose to ignore her common-sense approach.
The most troubling tax increase involves the hotel room tax, which they voted to increase by 2 percentage points over two years, to 9.25 percent. This would equate to more than $90 million over the next two years in new tax revenues! This is $90 million not going to restaurants, clothing stores, cultural shows or other businesses.
Don’t be fooled by those in the majority party’s leadership who say this won’t dissuade visitors from coming to our Islands. For a seven-night stay at $175 a night, one couple would have to pay a transient accommodations tax (TAT) of $113 — almost the cost of another night’s stay. Vacationing families and corporate conference planners will take the tax increase into account in deciding where to travel and spend their money.
Implementing this TAT increase would have a destructive effect on Hawai’i’s primary industry. And it would be simply a job killer.
This tax will also impact the many Hawai’i families who are choosing to vacation here at home to help our ailing economy. They, too, will be assessed this 28 percent tax increase when they stay at a local hotel while attending a wedding, a class reunion or enjoying time visiting family and friends on another island.
In addition, school sports and robotics teams and other student clubs that travel to other islands to compete will also be penalized with this increased room tax when they stay in a hotel.