Wednesday, January 17, 2018
Hawai'i Free Press

Current Articles | Archives

Sunday, September 03, 2017
Rail:  I Dunno About TAT
By Tom Yamachika @ 5:01 AM :: 1504 Views :: Rail, Taxes, Tourism

Rail:  I Dunno About TAT

by Tom Yamachika, President Tax Foundation of Hawaii

We are getting closer to the special session that our Legislature has scheduled to continue its discussion about funding Honolulu rail.  During this past session, the House and Senate were unable to agree on a common version of a bill to continue rail funding.

The two chambers disagreed about whether to use our Transient Accommodations Tax (“TAT”).  The TAT is a statewide tax.  A large portion of it is shuttled off to special funds, $93 million a year is shared with the counties, and the remainder goes to the state general fund.

One frequently voiced comment about using the TAT is that “Neighbor Islands should not pay for rail in Honolulu.”  This was the headline of Maui Council Chair Mike White’s analysis, recently published in The Maui News, which said:

For fiscal year 2018, in what has now become a common occurrence, the Legislature raided the counties’ TAT share by reducing it from $103 million to $93 million.  The counties’ share was reduced at a time when TAT revenues are at an all-time high, with anticipated revenues nearing or exceeding $533 million in the coming year.  By the end of this fiscal year, the state will have harvested $96 million more in TAT since FY 2016, or a 42 percent increase.

The state has increasingly taken more TAT revenues to help balance its own budget at the detriment of counties.  Now the Legislature wants to raise the tax to fund rail?

Neighbor Islands receive no benefit from the Honolulu rail, and a TAT increase has major implications on the economy. . . .

Members of the [Maui] County Council also agree that increasing the TAT is not the solution, and passed a resolution this past week urging the Legislature to extend Oahu’s GET surcharge instead.  The hope is that legislators will have a change of heart and avoid pulling the Neighbor Islands into the rail project and draining resources the counties need for their own projects.

Chair White seems to be arguing that the counties have a right to TAT money.  Really?  The TAT, when it was enacted in 1986, was primarily meant to fund the Hawaii Convention Center, which happens to be on Oahu.  (The tax at that time was 5% and it was billed as a temporary tax that would go away once the convention center got built.  Now it’s a 9.25% tax, and it’s permanent.  I have ranted about that before.)  The Hawaii Constitution explicitly says that the legislature shall have the power to apportion state revenues among the several political subdivisions.  State lawmakers have a right to send state revenue from a state tax wherever they see fit. 

State taxes fund all kinds of projects on all islands.  Guess how the Maui Memorial Hospital was built and maintained, for example?  Or Honoapi’ilani Highway?  If the 80% of Hawaii’s population on Oahu decided that they didn’t want “their” state taxes to fund any projects on any other islands, Maui County would be very different today. 

Also, Maui County has its own taxing power.  If revenue is needed to run county government, the county can tinker with real property tax, fuel tax, vehicle weight tax, vehicle registration charges, user fees, and other revenue sources.  (Honolulu has that power too, and it will probably have to use it to operate and maintain the train…unless it can persuade state legislators to use state money or state taxing authority to make Honolulu’s job easier.)  If Maui County doesn’t want to because their politicians fear political backlash from their electorate, Oahu and the State shouldn’t be blamed for that.

The Tax Foundation of Hawaii is not endorsing any particular tax to be tapped for rail.  We just want to make sure that any decision made is not based on misinformation.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ACCE

ALEC

Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A'ole Eradication

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Friends of Lanai

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

GoGoGMO!

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii Open Budget

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Senate Informer

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Hawaii Votes

Heritage Foundation

HI Coalition Against Legalized Gambling

HIEC.Coop

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu TEA Party

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube

HPACC

Hump Day Report

Hunting, Farming and Fishing Assoc.

I Vote Hawaii

If Hawaii News

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

No Hawaii Beverage Tax

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

OHA Lies

Ohana Policy Group

OpenHawaii.org

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SenatorFong.com

SIFE Remington

SIFE W. Oahu

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

TEA Party Maui

TFB Micronesia

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

United Veterans Hawaii

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

YAL UH Hilo 

Yes2TMT

 

 

 

Maui TEA Party
Maui TEA Party