Governor looks again to climate impact fee — this time aimed at vacation rentals - Hawaii News Now

Governor looks again to climate impact fee - this time aimed at vacation rentals

Governor looks again to climate impact fee — this time aimed at vacation rentals

HONOLULU (HawaiiNewsNow) - Gov. Josh Green on Monday estimated the Maui wildfires will end up costing Hawaii taxpayers a half a billion dollars over the next two years.

Despite that, he is still hoping to provide tax relief and a healthy budget surplus.

The amount the fires will cost state taxpayers is still a wild guess — depending a lot on the amount of federal aid Hawaii receives and how the long recovery goes.

But for now, other than money from a climate impact fee, he told reporters Monday that he has enough money to stick to his plans.

“We didn’t have to cut back on any of our priorities, though,” Green said.

It’s hard to imagine that the devastation of Maui’s wildfires did not devastate the state budget.

But the overheated economy last year put enough cash in the treasury to absorb the fire damage and repair costs — and invest in emergency management people and equipment.

State Budget and Finance Director Luis Salaveria supported 20 new employees for the state Emergency Management Agency.

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“These are positions that are supposed to be helping with firebreaks, doing assessments, doing all of the things in order to make sure that the state is well prepared,” Salaveria said.

“We have a lot of catching up to do,” added Green. “As far as developing more positions. We need to update our firetrucks we need to update our water systems.”

The estimated $500 million in wildfire costs includes an initial $60 million for death and injury payoffs from the Ohana Recovery Fund. The fund will pay out $1.5 million to families who must agree not to sue the state, county or Hawaiian Electric.

The governor said he wants the $1.5 billion rainy day fund to remain untouched because a surplus leads to less expensive borrowing costs.

That’s important because to balance the budget the governor converted about $170 million in construction, renovation and repair projects from cash to bond financing.

As for the proposed climate impact fee, the governor said he wants at least $50 million a year, potentially from putting the fee on short-term vacation rentals.

“It will both incentive people to move toward long-term rentals, so we have the housing, and we’ll have the money,” Green said.

Lawmakers agree vacation rentals are an overdue target.

Maui state Sen. Troy Hashimoto said this could be the year for reform after prior efforts failed.

“The timing wasn’t right,” Hashimoto said. “And I think now we have a catastrophic event. And so I think now more than ever, we probably there’s a big desire to take some action.”

State Sen. Donovan Dela Cruz, chair of the Senate Ways and Means Committee, said senators had previously proposed adding taxes to vacation rentals.

“We just need to see the details of how the governor is presenting it,” Dela Cruz said. “If it’s similar to what we don’t we tried to before there may be some appetite.”

The governor also says the aftermath of the fires may include a big increase in insurance premiums and wants to be prepared.

“It’s going to be hard for people to afford that insurance if it’s not subsidized and i think we are going to have to use these climate impact fees to help with that,” he said.

The governor says the state can also afford to reduce taxes, with what he calls phase two of his Green Affordability Plan, which offers tax credits for families with children or dependent adults and proposes adjusting tax brackets, which he said would cut income taxes for almost everyone.

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