The Honolulu City Council is considering a measure that would divert about half of its hotel tax revenue to the sewer fund.
Sewer fees are expected to more than double over the next 10 years to pay for a federally mandated upgrade to the city’s wastewater treatment plant.
Council Chair Tommy Waters explained that the measure is one way to offset those costs so that residents don’t see dramatic increases to their bills.
"Just as an example, if you're currently paying $200 a month, you're gonna have to pay $400 a month when this is all over. And those families who have children and need to use water, it’s going to be crushing,” he said.
"The cost of living continues to squeeze local families from all sides. And on the City Council, we can't control every economic factor, but we can make better choices using the tools we have, and that is here with the sewer fee. I'm proposing lowering the sewer fees, but using money that we generate from the Oʻahu transient accommodation tax.”
The city levies its own 3% transient accommodations tax on tourists — in addition to the state's 10.25% hotel tax. Currently, the city's revenue is mostly split between the general fund and the transit fund.
About 8% of the city's TAT goes toward mitigating the impacts of tourists on public spaces.
However, this bill would take around $49 million — about 42% of TAT revenue — that goes to the city's general fund and divert it all to the sewer fund until 2037.
The Honolulu Department of Budget and Fiscal Services Director Andy Kawano opposed the measure. He wrote that diverting money from the general fund could compromise the city’s long-term financial stability.
