Tourism authority faces cut

By Kevin Dayton
Advertiser Capitol Bureau Chief

The Senate wants to slash spending for tourism promotion to $50 million a year to help balance the state budget, a plan that triggered protests from the tourism industry yesterday.

The Legislature had earmarked $61 million for this year's tourism promotion from money collected through the state's hotel room tax. Another $10 million was added late last year to offset the effects of the Sept. 11 attacks.

All of that money went to the Hawai'i Tourism Authority, which warned yesterday there could be "dire consequences" if its money for tourism promotion is cut back.

"This is not the time to be reducing the tourism marketing and planning budget for the state," said Richard Humphreys, executive director of the authority. "Tourism in Hawai'i is encountering difficult times since the Sept. 11 events and we are under a constant threat of terrorism."

Senate Tourism & Intergovernmental Affairs Chairwoman Donna Mercado Kim countered that public spending on tourism promotion has grown rapidly since 1998, when the the state devoted only $29 million to the effort.

Kim, D-15th (Kalihi Valley, 'Aiea), said tourism officials should be accountable for the money they spend and should not assume their budget will readily grow.

"With the cap of $50 million, that's still a large chunk of money," said Kim, who has questioned the tourism authority at length about its spending both this year and last year.

Senate Ways and Means Chairman Brian Taniguchi said his committee wants to use some of the hotel tax collections now spent on tourism promotion to help balance the general treasury budget.

"We're looking at cutting departments, laying off people, doing a lot of these kinds of things, and possibly cutting education," said Taniguchi, D-11th (McCully, Mo'ili'ili, Manoa). "If we're going to do that, we think that everybody should share in the reductions and do more with less."

Many in the visitor industry and other business groups oppose the measure.

Murray Towill, president of the Hawai'i Hotel Association, reminded lawmakers yesterday that his organization supported increasing the room tax in 1998 only if the additional money was dedicated to promote Hawai'i as a tourist destination.

"We see this bill as a radical departure from the agreement in 1998, where it was understood the dedication funding would grow as (hotel tax) revenues grew," he said.

Reg White, vice president of Paradise Cruise Ltd., urged lawmakers to reduce the hotel room tax if the state doesn't need the money for tourism promotion.

"If we're taking more than we need, lower the rate," he said.

The House so far has refused to go along with the Senate proposal and, instead, has proposed a $61 million cap on spending for tourism promotion.

A solid majority in the Senate favors a $50 million cap, with the proposal winning easy approval there earlier this month and only Sen. Sam Slom, R-8th (Wai'alae Iki, Hawai'i Kai), voting against it. The proposal is part of House Bill 2251 HD2 SD1, which won approval in Kim's committee yesterday.

The bill would also set aside up to $2 million from the hotel tax collections to maintain state parks and hiking trails.

So far House lawmakers have refused to go along with the Senate proposal. The House Tourism & Culture Committee yesterday instead approved the bill that imposes a cap of $61 million a year.

Committee Chairman Jerry Chang said that the Hawai'i Tourism Authority has been successful in promoting the industry and that any reduction in promotion spending now would hurt the state economy.

"When we first created the tourism authority, that was part of the deal that they would get a certain percentage of the (hotel room) tax to do marketing," said Chang, D-2nd (S. Hilo). "After 9/11, we're tight on our budget, so we're going to cut back on tourism promotion? That doesn't make sense."

Gov. Ben Cayetano said through a spokeswoman yesterday that lawmakers should be looking to the $213 million in the Hawai'i Hurricane Relief Fund to balance the state budget instead of grabbing the hotel tax collections.

He accused Republicans of "politicizing" the hurricane fund issue. "As a result, the Democrats have been intimidated into looking everywhere else for funds to balance the budget," Cayetano said.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com or 525-8070.