Hawaii's climate battle receives a financial boost as lawmakers conclude the legislative session, approving an increase in taxes on hotel and cruise ship room rentals.
Rewritten Article
Hotel guests and cruise ship passengers will shell out around $90 to $100 million per year for Hawaii's climate adaptation efforts and wildfire prevention measures, thanks to a planned increase in the state's so-called hotel room tax. The proposed increase, set to take effect from January 1, passed through Legislature on the final day of the 2025 legislative session.
The hike follows the tragic August 2023 Maui wildfires that claimed 102 lives. But Governor Josh Green has been pushing for a new revenue source to combat climate change since his first term as governor three years ago.
This tax increase joins the 259 bills that Governor Green received during the final days of the legislative session, addressing a variety of issues both new and long-standing. Often, it takes the Legislature several sessions to pass bills that come up each year, according to political analyst Neal Milner, but action tends to happen following significant events.
In some cases this year, legislators made an effort to address public concern and demonstrate their commitment to addressing issues like illegal fireworks. Millions of dollars in new state funding have been allocated to fight illegal fireworks, action that followed several deaths and injuries during a New Year's Eve party in Aliamanu in 2023.
The approved state budget includes over $5.2 million and eight positions for an Explosive Enforcement Section "to disrupt the illegal fireworks trade in Hawaii by coordinating operations, seizures and sharing resources," said Representative Shirley Ann Templo (D, Kalihi-Kalihi Kai-Hickam Village) on the House floor. "Its focus is on reducing the availability and use of illegal fireworks, as well as combating related crime." Additionally, $2.4 million has been allocated for an "Illegal Fireworks Task Force to provide extra resources and support to help reduce the use of illegal fireworks, improving public safety and minimizing related hazards."
Tourism concerns
The tourism industry in Hawaii has been hesitant about the recent push to make tourists shoulder the cost for generating new revenue for climate change initiatives. Jerry Gibson, president of the Hawai'i Hotel Alliance, expressed concern about how increased taxation impacts occupancy rates.
If the TAT increase is approved, it will rise to 11% from the current 10.25%, adding to the 3% tax that each county already imposes, resulting in an overall 14% TAT. Gibson believes that Governor Green will support tourism on all islands, but he acknowledges that generating $500 million to $600 million annually to prevent future wildfires, offset the environmental impact of tourism, and adapt to climate change would be challenging with just the increased TAT revenue.
Planned allocation
The estimated $90 million to $100 million generated annually from the TAT increase will be divided into three main areas: natural resource management, climate-related disaster mitigation, and mitigating tourism impacts on the natural environment.
Believing that this money will help, Gibson has faith that Governor Green can leverage these funds through various funding mechanisms to nearly reach his $200 million annual goal.
Failed proposals
During the session, efforts for "clean government" were unfortunately abandoned by Legislature. Notable bills that died included creating a task force to study the possibility of creating a year-round Legislature, imposing term limits on Legislators, and increasing public funds for political candidates. Common Cause Hawaii, a prominent advocate for "clean government" reforms, was dismayed by the failure to pass any meaningful legislation to improve access to voting, return power to the people, and maintain the integrity of the campaign finance process.
A push for change
The desire for political and campaign reforms will likely continue to face resistance, alongside the annual attempts to legalize adult recreational marijuana, according to political analyst Neal Milner. However, an unexpected advance was made when a bill to collect state tax revenue from online sports gambling made it to the final days of the legislative session, potentially signaling a shift in Hawaii's stance on legalized gambling.
A new era for Hawaii may come if Green signs a bill allowing naming rights on the Hawai'i Convention Center and a new Aloha Stadium. By breaking Hawaii's ban on outdoor advertising, this bill represents a significant change for the state, but it remains to be seen how the Outdoor Circle, a powerful lobbying group against billboards, will respond.
Overall, Hawaii's push for increased tourism revenues to invest in climate change adaptation marks an ambitious effort to maintain the state's natural beauty while preserving its tourism industry. The success of these initiatives will greatly impact the future of Hawaii's environment and economy.
Sources: 1, 3, 5
- The tourism industry in Hawaii is concerned about an increase in the state's hotel room tax meant for climate adaptation efforts and wildfire prevention measures, as it may impact occupancy rates.
- Governor Green's efforts to generate new revenue for climate change initiatives include the proposed tax increase on tourism, which will be allocated towards natural resource management, climate-related disaster mitigation, and mitigating tourism impacts on the environment.
- While efforts for clean government, such as creating a task force to study a year-round Legislature and imposing term limits on Legislators, were abandoned during the legislative session, a bill to collect state tax revenue from online sports gambling made it to the final days, potentially signaling a shift in Hawaii's stance on legalized gambling.
- The success of Hawaii's initiatives to invest in climate change adaptation through increased tourism revenues will have a significant impact on the state's environment and economy, helping preserve its natural beauty while maintaining the tourism industry.
