(BIVN) – Governor David Ige on Monday announced his intention to veto 28 of 268 bills passed by the Hawaiʻi lawmakers during the 2021 legislative session.
“The state’s economic position has significantly brightened since the beginning of the legislative session, and we no longer need to take some of the extraordinary revenue actions proposed,” said Gov. Ige in a news release. The governor cited the substantial federal funding made available in the Coronavirus Response and Relief Supplemental Appropriations Act of 2020 and American Rescue Plan Act of 2021, as well as the improving outlook of the Council on Revenues, which has increased its general fund revenue projections for fiscal years 2021 through 2027 by a total of $6.1 billion over this seven-year period.
On the Governor’s veto list is HB862, which makes significant funding and functional changes to the Transient Accommodations Tax (TAT) and the Hawaiʻi Tourism Authority (HTA).
Governor Ige says the bill uses American Rescue Plan Act appropriations, making funding less predictable and adding potential inefficiencies. Also, the measure’s “added 3% county TAT represents a significant increase that could have a major impact on Hawaiʻi’s nascent economic recovery.”
“I am very concerned that the funding and functional changes in this bill will severely damage HTA’s shift to destination management. We need to find ways to mitigate the impact of visitors on our islands, and this bill would make it impossible for the HTA to strike a more sustainable balance in our communities,” said Gov. Ige.
Hawaiʻi County Mayor Mitch Roth issued this statement on the potential veto of HB862:
“We are very pleased with the Governor’s intent to veto HB 862, which would create an additional 3 percent Transient Accommodation Tax (TAT) on our hotel industry and potentially price our locals out of staycations. TAT was originally established to provide dedicated funding to allow visitor spending to mitigate visitor impacts on our community, but has instead, for the last few years, been a failsafe funding source for statewide issues. The roughly $19 million TAT that we collect, as a county, every year helps us maintain county infrastructure, beach parks, community centers, gymnasiums, etc. As we begin to emerge from the COVID-19 pandemic, we cannot afford to put further strain on our hospitality industry, one of the largest employers in the state, by allowing them to continually foot the bill. We need to remember that visitors are not the only ones who use our hotels and facilities, and therefore it would not be only the visitors to suffer from the increased tax. We must do a better job of thinking outside the box to address our many budgetary issues. Otherwise, we will just keep kicking the can down the road.”
Also on the intent-to-veto list:
- HB54 HD1 SD1 CD1 – Relating to the State Budget, which appropriates federal stimulus funds for debt service, which the Governor says is not an allowable use of ARPA Coronavirus State Fiscal Recovery Fund (CSFRF) funds. “I support the Legislature’s intent to replenish the emergency fund to fix essential debt service appropriations,” said Gov. Ige.
- HB200 HD1, SD1, CD1 – Relating to the State Budget. The Governor plans to line-item veto CSFRF-related appropriations.
- HB613 HD2 SD2 CD2 – Relating to Education, which uses federal relief funds for the purposes of conducting various education related services. “The appropriations made in this bill do not comply with federal guidance for spending and put the state at risk of being in violation of federal rules, which could require the return of the funds,” said Gov. Ige.
The State says that all bills on the Intent to Veto List “are subject to veto, but inclusion on the list does not indicate that the governor will veto a bill.” The Governor has until July 6th to make his final decisions. The full list can be downloaded here.