Hawai'i's mayors yesterday strongly objected to a proposal that would cut counties out of their share of the state's hotel room tax for six years as part of an effort to shore up the state's budget.

A bill authored by state House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo Valley, Wilhelmina Rise) would suspend the distribution of transient accommodations tax, or TAT, revenues to the counties starting July 1.

Honolulu receives an average of $48 million a year in TAT revenue, and the possibility of losing a total of $300 million over the proposed six-year period is unacceptable, officials said.

"The diversion of TAT funds would create a budgetary gap that would require us to rethink the level of services we provide our visitors and residents alike," Rix Maurer III, director of Honolulu's Department of Budget and Fiscal Services, said in testimony submitted to the Senate Ways and Means Committee.

"Given our economy's reliance upon the tourism industry for both General Excise Tax and local employment, we believe that tourism is something that both the state and the counties should invest in."

The committee yesterday deferred action on the bill.

Honolulu and the Neighbor Island counties provide critical infrastructure and services, including lifeguards, police, firefighters and emergency medical services personnel who help create and sustain the safe environment for visitors and residents. The funds are also used to fix roads, maintain beach parks and repair county buildings.

Maui Mayor Charmaine Tavares, flanked by Kaua'i Mayor Bernard Carvalho Jr. and Hawai'i County Mayor William P. Kenoi while testifying before the Senate Ways and Means Committee, said the loss of TAT revenue for six years would force the counties to reconsider their support of state initiatives to continue to provide basic services.

Maui projects that currently receive county support include $500,000 for the Maui Community College nursing program.

"The threat of the TAT being taken away is worrisome for all of us. We worked very hard in our budget sessions. Our deadlines came and went. We submitted balanced budgets (to the County Councils) based on the TAT," said Tavares, speaking before the committee. "We want to work in concert with everyone (at the state). We know everyone has hard times ... (but) we need to have a system where the tourists pay their fair share."

Maui receives between $18 million and $20 million in TAT tax revenue every year.

The state is facing a $90 million deficit for the fiscal year that ends in June and a $165 million gap for the following two-year budget cycle, and the proposal is one of many being considered by lawmakers to help alleviate the fiscal crunch.

"The TAT is something that benefits everyone, our constituents, your constituents are one and the same," said Kenoi, speaking before the committee. "We recognize we are all in tough times, but the TAT is a partnership (between the counties and the state)."

Hawai'i County receives about $18 million in TAT revenue each year.

The Hawai'i Tourism Authority also opposes the proposal, saying the counties provide invaluable support to the visitor industry, and halting that support at a time when visitor arrivals and spending are tumbling would be irresponsible.

"The impact of the visitor industry on county facilities and services are greater now than in 1990, when the allocation of revenues were made. Any reduction in TAT funding for the counties will seriously impact the counties' ability to provide services and facilities to our residents as well as visitors," said Lloyd I. Unebasami, interim president and chief executive officer of the HTA. "We oppose HB 1744 and urge you to hold this bill."