The Honolulu City Council advanced Wednesday a bill that would implement a 3% tax on tourist accommodations on Oʻahu.
The council voted 6-3 to approve Bill 40 on its second reading, bringing it a step closer to passage.
The bill would establish a city transient accommodations tax to be used for facilities and infrastructure impacted by tourism — as well as rail transit.
Councilmember Carol Fukunaga said she needs more information from the Honolulu Authority for Rapid Transportation, which oversees the rail project, before she can support the bill.
"Without information on HART’s plans to address the projected $2.5 billion projected shortfall in its transit budget, I cannot support unspecified percentages to be allocated to the HART transit fund," Fukunaga said.
The city said it is working on determining how much of the TAT funds would be requested for rail, and that information could be ready by next week.
Meanwhile, a poll released by a nonpartisan group of business and community leaders called Move Oahu Forward shows that 70% of Oʻahu voters support the institution of a county TAT.
However, when the use of funds is hypothetically broken down so that half the money would go toward the rail project, support falls to 56%.
The bill's third and final reading is scheduled for the next council meeting on Dec. 1.
Bill 40 is a response to a move by the Hawaiʻi State Legislature this year to strip the counties of funds from the state transient accommodations tax. But in return, the Legislature gave the counties the ability to levy their own hotel tax of up to 3%.
