HONOLULU โ Lawmakers in Hawaii are set to increase a tax on travelers staying in hotels, vacation rentals, and other short-term accommodations, making it the first state to do so for environmental purposes. The funds raised from this tax hike will be directed towards addressing climate change impacts through various programs. Proposed initiatives include replenishing sand on eroding beaches, aiding homeowners in installing hurricane clips on roofs, and removing invasive plant species like those that contributed to a deadly wildfire in Lahaina two years ago.
The new bill, expected to pass this week as Democrats hold supermajorities in both the House and Senate, would raise the daily lodging tax by 0.75% beginning January 1. Governor Josh Green has indicated his intention to sign it into law. Officials forecast the additional tax could bring in an estimated $100 million annually.
Governor Green emphasized the critical need for this measure, citing the $13 billion tragedy in Maui that claimed 102 lives. He noted that addressing environmental needs reduces the likelihood of such disasters. The governor highlighted that Hawaii is breaking new ground by using lodging tax revenue specifically for climate-related projects.
Currently, travelers in Hawaii face a hefty tax of 10.25% on daily room rates, which would climb to 11% with the new measure. Additionally, counties impose their own 3% surcharge, and services, including hotel stays, are subject to a 4.712% general excise tax. This would result in a combined tax rate close to 19%, putting Hawaii among the highest in the nation, just behind Omaha, Nebraska, and Cincinnati.
Governor Green has advocated that the influx of 10 million annual visitors should contribute to the protection of the stateโs environment, arguing that visitors will willingly pay more to maintain Hawaiiโs natural beauty. Following the Maui wildfires, there was a surge of interest from people seeking ways to help, and the increased tax offers a definitive method, Green added.
The Hawaii Hotel Alliance, representing the stateโs hotel operators, expressed a mix of relief and concern over the tax hike. Jerry Gibson, the groupโs president, noted that although the tourism industry generally opposes further taxation, there is an understanding of the stateโs financial needs. He pointed out that if funds are genuinely used for environmental enhancements, the tax could offer a worthwhile investment.
Long-time financial challenges have plagued Hawaii in terms of environmental and conservation efforts, which include protecting coral reefs, managing invasive species, and ensuring tourists do not disrupt native wildlife like Hawaiian monk seals. Additionally, Hawaiiโs extensive trail network is increasingly burdened by tourist foot traffic. Previously, state legislators contemplated a yearlong tourist license for outdoor sites, while Governor Green suggested a $50 entry fee for tourists, but those proposals were legally problematic.
An advocacy group, Care for Aina Now, highlighted a significant shortfall in conservation funding, pinpointing a $561 million gap between needs and actual allocations. Governor Green acknowledged the limitation of the increased tax revenue but suggested leveraging funds by issuing bonds. While most of the anticipated $100 million from the tax will address short-term projects, $10 to $15 million is expected to support long-term infrastructure through bonds.
K?wika Riley, part of the governorโs Climate Advisory Team, emphasized a Hawaiian saying that underscores the need for guests to contribute to the hostโs welfare after the first day of their visit. While travelers are not expected to physically labor, Riley stressed their participation in preserving the very environment they cherish.