Intestine-and-replace invoice threatens Tourism Authority funding

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The Hawaii Tourism Authority, which is responsible for the recovery of tourism on the islands, runs the risk of losing money again due to maneuvers in the eleventh hour with the state legislature.

Some Senators from Hawaii have introduced a version of HB 862 (808ne.ws/HB862), which cores and replaces the third section of an aerospace law with a proposal to amend Section 201B-2 of the Revised Hawaii Bylaws that would make sweeping budgetary and other changes to the HTA.

The Senate Methods and Committees, as well as the Senate’s Trade and Consumer Protection Committees, are due to hold a public hearing on this measure today at 10:30 a.m. (808ne.ws/hearingnotice).

At the same time, the Senate proposed reducing the current allocation of HTA in HB 200, the budget bill, from USD 79 million to USD 48 million.

If these measures move forward, they would cut HTA’s current budget by more than 60%. They would eliminate HTA’s annual temporary housing tax payout, forcing the agency to seek annual funding from state lawmakers.

HTA’s new mandate would focus the agency and its resources on its original marketing and branding functions, one of its four pillars, rather than prioritizing new pillars such as Hawaiian culture, environment and community. The change would be a major shift from the agency’s hub to a stronger role as destination manager after Hawaii exceeded 10 million visitors and the impact of some areas of community and state law being rolled back.

John De Fries, President and CEO of HTA, declined to be interviewed until after the hearing. However, he presented strong testimony against the bill which, he said, “brings a sledgehammer to HTA and three of its four strategic pillars (Hawaiian culture, natural resources and community) as we launch our tourism recreation strategies will help our ruined economy heal from the effects of the COVID-19 pandemic. “

This recent attempt to reduce HTA and make it less autonomous follows a difficult period for the agency, which struggled to strike a balance as tourism arrivals went from boom to, and only now, a pandemic-related bust Spring began to recover.

Governor David Ige issued an order earlier in the pandemic to suspend temporary lodging tax payments to HTA.

HTA received $ 79 million in TAT funding in 2019 and an additional $ 16.5 million for the Hawai’i Convention Center. In fiscal 2020, HTA only received the first four months of its TAT ​​distribution and reduced its household budget from $ 86 million to $ 48 million in September and to $ 41 million in November.

Ige pledged his support for the full restoration of HTA’s TAT ​​when he joined De Fries and the HTA board at a special meeting in February.

This was a relief to the agency, which had stated that without a TAT infusion, their funds would be down to just $ 10 million by June 30, the end of fiscal year 2021. However, the latest move by the Senate has once again made the agency’s future unclear.

Senator Glenn Wakai, chairman of the Senate Committee on Energy, Economic Development and Tourism, said Thursday that he is supporting the restoration of some TAT at HTA. However, Wakai is among the senators advocating a reduction in HTA funding and urging the agency to shift its core functions back to marketing and branding.

“The courage of the bill is to remove three of the four pillars. We’re taking away natural resources, responsibility for culture and community – there are other government agencies that can do this, ”Wakai said. “HTA will focus on branding and research. We will return to what they were originally founded to do. “

Wakai said the bill resulted from the need to reduce the size of the government and its budget while making government agencies more efficient and accountable to the public.

Earlier this year, Wakai criticized the way HTA had used its dwindling resources. For example, for every visitor from Japan who flew into the state in April, the worst month of the pandemic-related collapse, the marketing cost around $ 15,614 in marketing costs.

Wakai also questioned HTA’s decision to put an additional $ 250,000 into the Hawaiian Music and Dance Center when resources become scarce.

“It just comes down to trying to hold HTA accountable for public dollars,” he said. “When the house sees that everything is in order, we will negotiate over the table. From the Senate’s point of view, we would at least like to have the discussion and shed light on some of HTA’s spending practices. “

De Fries said the proposed cuts and operational changes come at a time when tourism is at a critical juncture.

In fiscal 2019, HTA helped bring $ 631 million in TAT collections to the state. While tourism has recovered over the spring break, full recovery is still a few years away.

State economist Eugene Tian said the Hawaii Council on Revenues in March estimated the TAT at $ 560.6 million for fiscal 2020 and just $ 184.5 million for fiscal 2021.