After threatening deep cuts to the budget of the Hawaii
Tourism Authority (HTA), the state legislature passed a pared-down version of
the bill Tuesday.
The legislation, which came to a vote in both chambers on
the last day of the legislative session, adds restrictions on HTA spending
while also relieving the authority of debt related to Hawaii Convention Center
The state Senate had pushed for deeper cuts of up to 44% of
HTA's budget, including a more than $21 million reduction to its main operating
fund. But after the Hawaii House and Senate met in conference, the final
version significantly scaled back the funding reductions. The bill calls for a
3% cut, from $82 million to $79 million. The legislation now moves to the desk
of Gov. David Ige.
The HTA receives $108.5 million from the state's Transient
Accommodations Tax each year, with $26.5 million designated for the convention
center. The state took on the debt related to convention center, relieving HTA
of the $190 million balance while also reducing the funding earmarked for the
convention center to $16.5 million.
Previously, the HTA reimbursed the state $26.4 million
annually for debt service on bonds issued to build the $350 million facility,
though in recent years it had been holding back $6 million of that payment.
The bill adds stipulations on where funds should be spent,
but the HTA's ability to manage tourism and marketing programs and apply the
tourism fund as they see fit was largely left untouched.
In addition to getting the convention center debt off its
books, the HTA was also granted an extra $1 million to address homelessness in
tourism areas. That sum will be matched by the Hawaii Lodging & Tourism
The HTA enjoys more autonomy than other state entities, but
the legislature has been angling for more control. In February, the state
auditor issued a scathing report on the HTA, pointing out lax oversight of
spending and a failure to follow internal rules and procedures.
The cuts to the HTA's budget come as the state is
experiencing its seventh consecutive year of record arrivals and tourism
spending. The Transient Accommodations Tax from hotels and lodging in Hawaii
generated a record $546 million in revenue in fiscal year 2018.