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The Hawaii Tourism Authority is once again in the legislative crosshairs, and its funding has fallen on the wire.
Speakers from the State House and Senate left HTA funding out of House Bill 1600 when approving their final version of the state’s $17 billion supplementary budget for the coming fiscal year Wednesday.
The agency could be funded by House Bill 1785 or Senate Bill 775; however, if none of these heavily amended bills advance, HTA will be defunded.
“In the State Legislature, our budget for fiscal year 2023 relates directly to two bills, which remain active at this time, and negotiations are still ongoing between the two houses,” he said Thursday. HTA President and CEO John De Fries to the HTA Board of Directors. “The future of this will be determined in the next 24 to 48 hours.”
Lawmakers must reach an agreement and pass at least one of the measures today, the deadline for tax bills.
Even if lawmakers reach a resolution, the fluidity of the situation could bring major changes affecting HTA, as well as the visitor industry and state taxpayers.
If HB 1785 passes, the tourist agency will face new legislative controls. The bill seeks to revamp HTA and designate what portion of its budget should be devoted to administrative costs and the agency’s “four pillars”: natural resources, Hawaiian culture, community, and brand marketing.
This is on top of a cut to the HTA budget in 2018 and major changes in 2021 when lawmakers overturned Governor David Ige’s veto of Bill 862, which removed the agency’s dedicated funding source. tourism and cut its annual budget to $60 million from $79 million.
The current version of SB 775 funds HTA without conditions but also creates an additional agency, a natural resources management commission, with an appropriation of $30 million.
There is a standoff between Sen. Glenn Wakai (D, Kalihi-Salt Lake-Aliamanu), who chairs the Senate Committee on Energy, Economic Development and Tourism, and Rep. Richard Onishi (D, South Hilo-Keaau -Honuapo), chairman of the House Labor and Tourism Committee.
“It’s imperative that one of the bills move forward or HTA will be canceled,” Wakai said. “We are not receptive to the idea of Onishi putting them into special funds, nor are we inclined to accept his $30 million (transient lodging tax) for a conservation fee. “
Wakai said Senate speakers support HB 1785, which Onishi introduced to create a new tourism governance model by 2025. Wakai’s committee, along with the Senate Government Operations Committee, amended HB in March 1785 to reorganize HTA.
Wakai said HB 1785 maintains HTA with $60 million in American Rescue Plan Act funds. It also provides a spending cap of $28.5 million for the Hawai’i Convention Center’s Special Business Fund.
He told HTA at its Thursday board meeting that the Senate version of HB 1785 retains HTA’s 25 employees and adds funding for an additional employee. However, lawmakers inserted a reorganization table awarding compensation and redescribing some of the positions.
The bill enshrines in law destination management action plans developed by the HTA community to ensure continuity of funding, he said.
Wakai said the bill would also require HTA to base its marketing contracts on performance and limit the scope of a contractor’s work to the pillar for which they were hired.
Onishi said the House is working with the Senate to determine which bill to use to fund ETS.
“As far as we are concerned, HB 1785 micromanages HTA, and we don’t want to do that,” Onishi said. “We still depend on their board to provide oversight and the big question of how the budget is set.
“Our House prefers SB 775 because it provides funding for HTA and establishes the Natural Resources Management Commission.”
Onishi said he wanted HB 1785 to fulfill his original intention to lead the Legislative Reference Office to conduct a study that identifies and analyzes alternative tourism governance systems.
Joe Kent, executive vice president of the Grassroot Institute of Hawaii, said in an email: “The real question is whether the HTA should be funded, as it would save taxpayers money and promote the economic sustainability to let the tourism industry pay for its own advertising. and management.
“It is also concerning that the Legislative Assembly appears to be testing the limits of the recent ’empty and replace’ court ruling, since the language of these two bills has changed significantly since their original versions.”
SB 775, introduced in 2021, proposed to increase Hawaii’s transient lodging tax rate and, as such, was passed by two Senate committees and a 25-0 vote in the full Senate.
On April 1, the House Committee on Labor and Tourism, along with the House Finance Committee, announced that a public hearing had been scheduled on a proposed new bill, which no longer included rate increase and instead created and funded a natural resources commission. commission.
HB 1875 appears to have made more progress than SB 775 since legislative delegates have already been appointed and the bill has been discussed with HTA. However, a lot can change, as the status quo has been throughout the current session.
Uncertainty over HTA’s future has been building since late March, when the House passed a version of the state budget that allocated just one dollar to pay for HTA’s operations and eliminated all money for staff, while allocating only $1 for the convention center and $1,000 to repair its roof. .
The Senate eliminated HTA funding from the state budget and instead tied potential funding to a bill that provides lawmakers with greater ability to refocus the agency’s mission.
HTA was established in 1998 by statute to serve as the state’s lead tourism support agency and since its inception has had to deal with various funding and organizational changes decided by legislators.
About 20 years ago, lawmakers amended an appropriations bill to require the same contractor to market and manage the Hawai’i Convention Center. It was only a few years ago that this legal obligation was lifted.
The HTA has come under greater scrutiny from lawmakers in recent years as community sentiment towards tourism has plummeted. Negative sentiments were so strong that they did not rebound during Hawaii’s pandemic-related economic collapse. This has left the community, including lawmakers, even more undecided about whether HTA should prioritize tourism marketing or tourism management.
“We are bipolar in our views on tourism,” Wakai said as a panelist at the April 19 “Global Perspectives and Local Initiatives for Tourism Management” event hosted by the Department of Hospitality Education. and tourism from Kapiolani Community College.
“We love it because it provides all of these jobs, and at the same time we hate it and revile it because it provides some of the impacts that we discussed tonight,” he said.
Colin Moore, director of the University of Hawaii’s Center for Public Policy, said there had been “a lot more fighting between chambers” over tourism and a host of other issues in recent years.
“The most visible piece of policy (this session) was minimum wage, and it also comes down to this game of chicken,” Moore said. “No entity can replace HTA. I think it will work out because it has to; no one wants to be the legislator who sinks the tourism industry. It’s a bit of a stretch, but there would be huge consequences, real backlash if that happened.
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Star-Advertiser reporter Andrew Gomes contributed to this story.
