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The Hawaii Tourism Authority, the agency tasked with leading the recovery of tourism to the islands, is at risk of losing funding again due to 11 a.m. maneuvers in the state legislature.
Some Hawaii senators introduced a version of the HB 862 (808ne.ws/HB862) that guts the third section of a primarily aerospace bill and replaces it with a proposal to amend Section 201B-2 of the Revised Hawaii Laws, which would make sweeping budgetary and other changes to HTA.
The Senate Ways and Means Committees and the Senate Commerce and Consumer Protection Committees are scheduled to hold a public hearing on the measure today at 10:30 a.m. (808ne.ws/hearingnotice).
At the same time, the Senate proposed reducing HTA’s current appropriations in HB 200, the budget bill, to $48 million from $79 million.
If these actions go ahead, they would reduce HTA’s current budget by more than 60%. They would eliminate HTA’s annual transient lodging tax disbursement and require the agency to seek annual funding from state legislators.
HTA’s new mandate would refocus the agency and its funds on its original marketing and branding functions, one of its four pillars, instead of prioritizing new pillars like Hawaiian culture, the environment and community. The change would be a significant shift from the agency’s pivot to more of a destination management role after Hawaii surpassed 10 million visitors and the impacts generated pushback from some pockets of the community and legislature. of State.
HTA President and CEO John De Fries declined to be interviewed until after the hearing. However, he submitted testimony in strong opposition to the bill, which he said “takes a hammer on HTA and three of its four strategic pillars (Hawaiian culture, natural resources and community), just as we do.” let’s launch our tourism recovery strategies that will help our devastated economy recover from the effects of the COVID-19 pandemic. »
This latest attempt to reduce the HTA and make it less self-sufficient follows a difficult period for the agency, which has struggled to find a balance as tourist arrivals have gone from a boom to a linked collapse. to the pandemic and it was only this spring that they began to recover.
Governor David Ige issued an executive order earlier in the pandemic ending transient accommodation tax payments to HTA.
In 2019, HTA received $79 million in TAT funds and an additional $16.5 million for the Hawai’i Convention Center. In fiscal 2020, HTA received only the first four months of its TAT distribution and reduced its fiscal budget in September to $48 million from $86 million and then 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.
It was a relief for the agency, which had said that without a TAT injection, its funds would drop to just $10 million by June 30, the end of fiscal 2021. But the latest push from the Senate has once again made the agency’s future uncertain.
Senator Glenn Wakai, chairman of the state Senate Committee on Energy, Economic Development and Tourism, said Thursday that he supports restoring part of the TAT to HTA. However, Wakai is among senators advocating for a cut in funding for HTA and calling on the agency to refocus its core functions toward marketing and branding.
“The heart of what is in the bill is to remove three of the four pillars. We’re taking away natural resources, culture and community responsibility — there are other state agencies that can do that,” Wakai said. “HTA will focus on branding and research. We’ll go back to what they were originally created for.
Wakai said the bill stemmed from a need to reduce the size of government and its budget, while making state agencies more efficient and accountable to the public.
Earlier this year, Wakai criticized the way HTA spent its dwindling resources. For example, it cost HTA about $15,614 in marketing for every visitor from Japan to the state in April, which was the worst month for the pandemic-related tourism slump.
Wakai also questioned HTA’s decision to invest an additional $250,000 in the Center for Hawaiian Music and Dance at a time of limited resources.
“It’s just up to us to try to hold HTA accountable at public expense,” he said. “If the House sees that things are going well, then we will negotiate this from the other side of the table. From the Senate’s perspective, we want to at least have the discussion and shed some 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 year 2019, HTA helped bring $631 million in TAT recoveries to the state. But while tourism has seen a spring break rebound, full recovery is still a few years away.
State Economist Eugene Tian said the Hawaii Council on Revenues in March estimated the TAT for fiscal year 2020 at $560.6 million and only $184.5 million for fiscal year 2021.
