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The Honolulu Advertiser
Posted on: Saturday, January 6, 2007

$5M trust fund a good use of hotel tax

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When it comes to tourism, image is everything. And in Hawai'i, where tourism plays a major role in our economy, our image is worth protecting — especially when news stories and events affect the ebb and flow of visitors.

The call for a $5 million emergency trust fund to protect Hawai'i's image makes sense — as long as there are strict provisions on how the fund can be used.

The Hawai'i Tourism Authority wants the Legislature to create the fund with some of the money from the expected $12 million in additional revenues generated from the $243.7 million transient accommodations tax.

While more than $80 million of the tax is already reserved for marketing to tourists year-round, what's needed is money to offset the negative impact from unexpected events, such as the Sept. 11 terrorism attacks or the sewage dumping in the Ala Wai.

The state's tourism industry suffered as a result of these events and could have benefitted from marketing aimed at damage control.

But there must be safeguards to ensure that a $5 million fund dedicated for this purpose is not used as a rainy-day slush fund when tourism is at a high. As Lowell Kalapa, executive director of the Tax Foundation of Hawai'i points out, that's always a danger when such funds are left unchecked and without clear definitions for use.

But with the proper restraints, an emergency trust fund can be an effective tool in protecting and investing in our state's image — a vital part of our economy.