About $1.4 billion — that’s how much the state will need to address climate resiliency over the next five years, according to the governor’s Climate Advisory Team.
Three measures still alive at the Legislature would collect funds for climate resilience – two of which would again increase the tax levied on hotels.
“Climate disasters will happen in Hawaiʻi, will continue to happen, and they are increasingly going to cost us dearly,” said Denise Antolini, an environmental lawyer and a member of Gov. Josh Green’s climate team.
Antolini emphasized that it’s a crucial time to create and put money into the Climate Mitigation and Resiliency Special Fund.
“We, human beings, can't control at this point how the climate disasters will occur in Hawaiʻi, but we can control how to prepare,” she said.
“A large amount of money is needed to be invested up front and that money needs to be very agile and allocated through a very transparent process where the agency is involved and the community organizations or the nonprofits or the consultants involved — all would have to go through a application process to make sure that every dollar spent is well invested.”
One measure being considered by the Senate would use the interest off of the state’s $1.5 billion reserve fund — generating about $75 million a year.
Another measure would increase the state’s transient accommodations tax by 1.75 percentage points, bringing the tax levied on visitor lodgings to 12%.
That's expected to increase tax revenue by about $180 million. Those funds would then essentially be split between the Climate Mitigation and Resiliency Special Fund and another special fund for environmental infrastructure and resiliency in resort areas.
How the levy could affect the tourism industry’s bottom line
Antolini explained that the split allocation should make the tax increase more digestible for the tourism industry.
“Returning half of the increase to the tourism industry and half to this new climate disaster fund — that makes a lot of sense as a policy measure,” she said.
“Our understanding is that there's not been at least visible opposition to raising the TAT if it's split like that because it really makes sense to invest in our natural resources to support tourism.”
And she’s not wrong. The Hawaiʻi Lodging and Tourism Association, which usually fights against increases to TAT, has not weighed in at all.
However, the proposed increase concerns the Kohala Coast Resort Association, which represents hotels and resorts on the west side of Hawaiʻi Island. Administrative Director Stephanie Donoho explained that the added tax may not sway the average traveler from visiting, but it could impact large conventions and group bookings.
“When we're negotiating those kinds of contracts and we have to go back and say, ʻNo, I'm sorry, the tax has gone back up,’ they do make decisions to go other places,” Donoho said.
“It's because they're booking such a large piece of business that all those little things — a 1%, 2% — it adds up significantly on their bottom line. So we see them going to Florida and New Orleans and Mexico. And those resort rooms booked by a group, that fuels a lot of the employment at the hotels.”
She said that short-term vacation rentals are not paying their share of the TAT and that the state could recoup funds for climate resiliency if it was collecting the tax from all the operators.
Who should foot the bill?
However, the Care for ʻĀina Now coalition has been pushing for a climate fee for tourists for years. One of its leaders, Jack Kittinger, explained that $560 million is needed to even properly fund the state’s current responsibilities.
“The Department of Land and Natural Resources and other state agencies like DHHL have massive remits and they get pennies on the dollar currently to deliver on those responsibilities,” he said, referring to the Department of Hawaiian Home Lands.
“They have existing plans that are massively underfunded. So the first pillar is — let's deliver on what the state's responsibility is right now and let's fund it adequately.”
That’s why his organization supports another measure that would charge visitors who book hotels with points $20 a day — because they currently don’t pay taxes. Those funds would go to DLNR.
Rep. Adrian Tam, who chairs the House Tourism Committee, added that visitors should feel empowered that their money is going toward protecting Hawaiʻi’s natural resources.
“If they know that it's going towards beach restoration or preservation of our hikes – they tend to be okay with it,” he said. “We have to generate revenue, and this is all coming down from potential spending cuts from Trumpʻs administration and we know that they do not take environmental conservation too seriously, so we're also stuck in a place.”
Antolini of Green’s Climate Advisory Team added that federal cuts are increasing the need for the state to find more ways to become self-reliant, and that a climate resiliency fund is one of the ways to do that.
“We need to have the ability ourselves to fund as much as we can, our own programs that support our residents, both in their daily life and quality of life and cost of living, but also disaster resilience, because the federal government is not going to come to the rescue at least for the next several years,” she said.
“It definitely adds to the momentum for a more self-reliant state approach to disaster preparedness, as well as other social safety net programs," Antolini continued.
Both Climate Mitigation and Resiliency Special Fund measures passed out of the Senate Ways and Means Committee on Thursday.
