Posted on: Friday, May 2, 2003
Hotels, Ko Olina gain construction tax credits
By Gordon Y.K. Pang and Lynda Arakawa
Advertiser Capitol Bureau
Tax credits for new development at the Ko Olina Resort and Marina as well as tax credits for hotel construction and renovation were approved by state lawmakers yesterday as the state Legislature wrapped up its 60-day session.
The two measures were among about 250 passed during the session before adjournment last night.
The session was dominated by discussion over how to deal with a vexing financial situation, which ultimately was resolved with a $7.6 billion general fund budget that cut money for many programs but did not increase excise taxes or raid the Hawai'i Hurricane Relief Fund.
This year's Legislature also was highlighted by passage of a long-term-care tax, which Gov. Linda Lingle has threatened to veto, and the failure to pass more stringent campaign reforms or sweeping changes to the public school system.
The two tax credit bills had appeared to be in jeopardy earlier this week when they got caught in a chess match between Senate and House leadership. The Senate on Tuesday nearly killed the bill extending hotel construction and renovation tax credits, a proposal favored by the House majority, with leaders saying new tax figures showed the state couldn't afford it.
As a result, the House postponed a vote on a tax credit for development at the Ko Olina Resort and Marina, a measure the Senate approved Tuesday.
But Senate leaders said more money was found for the hotel construction tax credits and yesterday approved House Bill 1400 by a 24-1 vote, with Sen. Gordon Trimble, R-12th (Waikiki, Ala Moana, Downtown), voting against it. The bill cleared the House unanimously.
The House then moved to approve Senate Bill 377 relating to the Ko Olina tax credits. Following more than an hour of testimony, the measure yesterday moved out by a 36-15 vote with 13 Democrats and two Republicans voting no. The Senate vote on Tuesday was 20-3.
The hotel tax credit would extend the hotel construction and renovation tax credit for three years at 8 percent of the construction or renovation costs and for the following four years at 4 percent.
The Ko Olina tax credit would establish a tax credit of up to
$7.5 million each year for 10 years on qualified development costs at the Ko Olina Resort and Marina. The state Tax Department estimated the hotel tax credit could cost about $17 million to $26 million in lost revenues for the first two years, while the Ko Olina tax credits are for $75 million over 10 years.
The Ko Olina issue touched off the most impassioned debate of the final day, with proponents arguing about the need to jumpstart the Wai'anae Coast economy and the tourism industry and skeptics raising strong concerns that revenues generated would not be able to make up the loss of revenues from a project already set to go.
House Tourism Chairman Jerry Chang, D-2nd (Hilo), said the tax credits would help stimulate the creation of a world-class aquarium, marine science mammal research facility and establishment of the Makaha Resort as a training facility for travel industry management education.
"This measure will be a catalyst in the further development of the Ko Olina Resort as a major force in the revitalization (of West O'ahu), especially the Leeward Coast," Chang said. "It will mean thousands of construction and permanent jobs and will play a vital role in the regeneration of O'ahu's tourist economy."
The development would provide new attractions for the island and complement the existing visitor destinations in and around Waikiki, he said.
Rep. Michael Kahikina, D-44th (Nanakuli, Honokai Hale), called the investment critical for the Leeward Coast. "This investment will help the residents and benefit a community that has no hope, no training available," he said. "We welcome this."
He noted that management training will allow upward mobility for area residents.
But several lawmakers said they are skeptical of the lures and promises of tourism development in new areas.
Rep. Sol Kaho'ohalahala, D-13th (E. Maui, Moloka'i, Lana'i), said residents on his home island of Lana'i were promised many things when the visitor industry provided jobs for those who lost work following the demise of agricultural jobs, but many of the promises were not kept.
"I've lived through it. Our community is an example of that, along with many other communities that have been in transition from plantation to resort development," Kaho'ohalahala said. He said when he asked Ko Olina developers for assurances that the jobs would go strictly to area residents and that they be "good, high-paying jobs," he received unsatisfactory answers.
Families who work in the visitor industry often have to work two to three jobs to make it, he said.
Rep. Helene Hale, D-4th (Puna) said the same thing has happened since the demise of the sugar industry on the Big Island and she urged lawmakers to support initiatives that diversify the state's economy.
House and Senate lawmakers yesterday also approved a measure to restore binding arbitration for about 24,500 state and county public workers belonging to the Hawai'i Government Employees Association. The administration opposes the bill, which takes away those public workers' right to strike, saying binding arbitration virtually guarantees pay raises.
The administration also says resolving contracts through binding arbitration discourages parties from negotiating and instead results in issues left for the arbitrator to settle. But HGEA leaders said it would ensure there is no disruption in public services because of a strike and that contracts are settled fairly by an objective third party.
Only state nurses, prison guards, firefighters and police officers are now entitled to binding arbitration.
The Senate voted 19-6 on the measure, Senate Bill 768. The House voted 38-13.
Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com and Lynda Arakawa at larakawa@honoluluadvertiser.com. Or reach both at 525-8070.
|
