HONOLULU (AP) — The Hawaii Tourism Authority has begun planning for the possibility that the organization could be funded by the state.
Officials from the agency tasked with leading the statewide tourism recovery say the authority is in dire financial straits, the Honolulu Star-Advertiser reported Monday.
The agency was created by the state legislature in 1998 to serve as the state’s lead tourism support agency.
Democratic Governor David Ige issued an executive order after the outbreak of the coronavirus pandemic ending transient accommodation tax payments to the authority.
In 2019, the agency received $79 million in tax funds for transient accommodations and an additional $16.5 million for the Hawaii Convention Center.
In fiscal year 2020, the authority only received the first four months of its tax distribution. The agency cut its fiscal budget in September to $48 million from $86 million, followed by another cut in November to $41 million.
The authority operates on funding from previous years and budget cuts, while rapidly burning through its reserves.
Without Ige’s restoration of funding, the authority said it would be reduced to $10 million by June 30, the end of fiscal year 2021.
“At $10 million with no additional funding. I would be in a downturn,” said authority chairman John De Fries.
De Fries said he and executive director Keith Regan were “examining what amount to some kind of doomsday scenarios.”
“We haven’t brought it to the board yet, but I mean, with that kind of dramatic loss of funding, it would end up limiting HTA in anything it could do,” De Fries said.
De Fries said he hopes to meet with Ige to ask for the full restoration of the agency’s budget.
The state Senate Committee on Energy, Economic Development, and Tourism sent a letter Jan. 4 to Ige advocating for the restoration of the transient lodging tax disbursement to reconstitute the agency.
“Funding them will mean that jobs for our neighbors will continue to evaporate,” Democratic Senator Glenn Wakai, chairman of the committee, wrote in the letter. “HTA is the pivot that will propel Hawaii out of its financial misery.”
Ige responded with a letter saying the state would reverse the tax holiday “as incomes improve.”
For most people, the novel coronavirus causes mild to moderate symptoms, such as fever and cough, that resolve within two to three weeks. For some, especially older people and people with existing health conditions, it can lead to more serious illnesses, including pneumonia and death.
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