Hawaii tourism impact fee appears dead, expected to be retooled

Apr. 21—The concept of charging a new fee for tourists to help offset their impact drew overwhelming support as the amended version of HB 2406 moved through the House before crossing over to the Senate.

An effort to increase the state hotel tax by $25 to offset the impact of visitors on the environment and climate change has stalled this legislative session but the concept of a "green fee " remains alive and will likely return with a new funding plan next session.

House Speaker Scott Saiki introduced House Bill 2406 on behalf of Gov. Josh Green that would have added another $25 to the state's transient accommodations tax that would go into a new Climate Health and Environmental Action Special Fund, "to minimize the impacts of, and respond to, climate crises, " the administration wrote in support of the bill.

The fund would be available for a wide range of uses including, "wildfire prevention and response strategies, flood prevention, emergency drinking water supplies, shoreline restoration and coastal management, and preparation of climate crises prevention and response strategies and plans, " according to testimony from the administration.

Tourism arrivals peaked at over 10 million before the 2020 COVID-19 pandemic, which led to wide-spread calls among island residents to limit visitors.

As arrivals continue to climb toward pre-COVID-19 levels, Green has said publicly that imposing another fee on tourists to help the environment and reduce climate change could help limit their numbers.

The concept of charging a new fee for tourists to help offset their impact drew overwhelming support as the amended version of HB 2406 moved through the House before crossing over to the Senate.

Support came from several state agencies and organizations and businesses concerned about protecting Hawaii's fragile ecosystem and the effects of climate change.

Arwen Revere, a Le Jardin Academy high school senior representing the environmental organization Wild Kids, wrote in support that HB 2406 represents a "crucial step toward addressing the pressing issues posed by climate change in Hawaii. Hawaii's natural environment is facing unprecedented challenges, including wildfires, coastal erosion, loss of reefs, and pollution of air and water supplies. The recent Lahaina wildfire tragedy on Maui serves as a stark reminder of the urgency to take significant action to prevent and mitigate climate crises. As a young person born and raised in Hawaii, I have witnessed the increasing impact of climate change on our natural resources and cultural landscapes."

He urged passage of HB 2406 to "prioritize the well-being of Hawaii's natural environment, cultural heritage, and the future of its residents. By taking decisive action now, we can work towards building a more resilient and sustainable future for Hawaii."

The Nature Conservancy wrote in support that conservation efforts are needed "to maintain Hawaii as a healthy, sustainable home for future generations, as well as a world class visitor destination. Our natural resources sustain our way of life, feed our families, and drive our local economy. Although Hawaii's natural beauty is a top tourist attraction, conservation efforts receive less than 1 % of the state's annual budget. The $25 tax on transient accommodations could help close Hawaii's conservation funding gap, which has been estimated at $360 million annually. Hawaii's people and natural resources are being directly affected by climate change. We are experiencing increased flooding, coastal erosion, sea level rise, coral bleaching, loss of native forest, rising temperatures, increased threats of extinction for endangered species, and other impacts from the changing climate. ... By investing in our environment today and into the future, we can ensure that residents and visitors are able to enjoy our incomparable natural environment and island lifestyle for generations to come."

But HB 2406 failed to get a hearing in any of the four Senate committees that were assigned to hear it. The bill all but died last month.

Another bill that also appeared to die last month—the latest version of Senate Bill 304—would have required the state Department of Land and Natural Resources to collect a visitor fee for a "license " to visit "a state park, forest, hiking trail, or other state natural area " to go into a special fund for a "visitor impact fee program."

In the legislation and among the public, "There's a lot of support in principle, " said Colin Moore, who teaches public policy at the University of Hawaii and is an associate professor at the University of Hawaii Economic Resource Organization.

"It may just be an idea that the (Legislature ) wanted to hear another time to understand the details, " Moore said. "They want to figure out the right model. ... This is a hard thing to get right. It's very important to the visitor industry and there are potential legal challenges."

An increase in the TAT also theoretically could apply to residents staying in lodging while visiting friends and family on other islands, Moore said.

He predicted that, "we will eventually get something like this but the details are difficult. This is an instance where the Legislature's caution is understandable because it's yet another tax."

Push back to raising the TAT came from some segments of Hawaii's tourism and lodging sectors.

Jerry Gibson, president of the Hawai 'i Hotel Alliance, wrote in opposition to HB 2406, that it "will further burden the tourism industry, which is still recovering from the impacts of COVID-19 and the Lahaina wildfire."

Gibson wrote that increasing the TAT would only apply to hotels and resorts and not illegal short-term vacation rentals or cruise ships.

Instead, Gibson suggested fees for the special fund could be levied "at tourists' point of entry, " such as airports and cruise ship ports.

Mufi Hannemann chairs the board of the Hawaii Tourism Authority and also serves as chief executive officer and president of the Hawaii Lodging &Tourism Association.

He said he believes Hawaii already has one of the highest TAT rates in the country, if not the highest, and opposes increasing it even more.

Hannemann does not oppose the idea of tourists paying extra to offset their impacts and cited a handful of a la carte state and city models, such as at Hanelei Beach Park on the north shore of Kauai that was rebuilt into a pay-as-you go model following the devastating 2018 floods ; Diamond Head State Monument and the city's Hanauma Bay nature preserve, which Hannemann championed as a member of the Honolulu City Council before being elected mayor.

Each exempts residents from having to pay to access the parks and fees go specifically to care for each attraction and "not into the general fund " where they can be spent "on every environmental concept under the sun, " Hannemann told the Honolulu Star-­Advertiser.

Or, visitors could pay specific fees to access both state and county parks and trails, for example, through an app that the HTA would have to develop under the latest version of HB 2563.

The app would allow visitors to make reservations and could be used to collect any fees, according to the bill.

In 2016, HTA launched its GoHawaii app that provides travel and other information on ocean activities, hiking, weather conditions, activities and cultural events on each of the major islands, along with web sites and contact information to get tourists "reliable information."

When it comes to tourists paying to offset their effects on the environment, Hannemann said, "I'm not opposed to the concept. It's the details. But increasing the TAT absolutely has to be off the table."