Hawaii Green Fee Aims to Bolster Environment, Tourism

Hawaii's visitor industry is moving towards a more sustainable future with the implementation of a new climate impact fee. This initiative, known as the 'green fee,' is designed to strengthen the state's environment, build resilience against climate change, and improve the overall visitor experience. The fee, which took effect on January 1, is expected to generate approximately $100 million annually to fund critical environmental projects across the islands.

New Climate Impact Fee Explained

The new green fee is part of Act 96, Senate Bill 1396. This legislation increases the Transient Accommodations Tax (TAT) by 0.75 percentage points. As a result, the TAT now stands at 11%. This change impacts various sectors of the tourism industry.

Hotels and vacation rentals are subject to the increased tax. Significantly, for the first time, cruise ships also fall under this expanded tax. This broader application is central to the projected revenue increase.

The state anticipates that the higher TAT will generate approximately $100 million each year. These funds are specifically earmarked for environmental protection and climate resilience initiatives. The goal is to ensure Hawaii's natural resources remain vibrant for both residents and visitors.

Green Fee Advisory Council's Role

A 10-member volunteer Green Fee Advisory Council has been appointed by Governor Josh Green. This council is tasked with developing recommendations on how to allocate the new green fee funds. Their work is crucial in ensuring the money is spent effectively.

Jeff Mikulina, chair of the advisory group and executive director of Climate Hawai‘i, provided an update at the recent Hawaii Tourism Conference. He emphasized the collective nature of this process. The council includes members from diverse backgrounds across the islands.

"The governor wanted balance and I think that we’ve really got that," Mikulina stated. "This is going to be a collective process."

The council's responsibilities include developing criteria for project evaluation. These criteria must align with the three main areas outlined in the bill: strengthening the environment, building resilience, and enhancing the visitor experience. They will also recommend a prioritized list of projects for the governor's supplemental budget request.

Industry Support and Expectations

Initially, some members of Hawaii's visitor industry expressed skepticism about the green fee. Concerns focused on the potential impact on tourism, given the already high cost of travel to Hawaii. However, sentiment at the conference indicated broader support for moving towards a more sustainable destination.

Jerry Gibson, President of the Hawai‘i Hotel Alliance, confirmed the organization's support. He acknowledged that increasing the TAT is difficult for both tourists and the industry. However, he emphasized the purpose of the funds.

"None of us like increasing the TAT — it’s tough on the tourists, it’s tough on the industry," Gibson said. "But when we think of the purpose and what this money will go for and having tourists in the resort zones that will have world-class beaches … we felt that his sacrifice was worth it."

Gibson anticipates that the visitor industry will receive about one-third of the funds. This portion would be used for projects like replenishing sand on beaches. He believes this will benefit the entire industry and all islands.

Funding Allocation and Project Examples

The remaining two-thirds of the funds are likely to support broader environmental initiatives. These include creating fire breaks in drought-prone areas. Another key area is the removal of invasive species. These projects address critical environmental challenges facing Hawaii.

Jeff Wagoner, CEO and President of Outrigger Hospitality Group and an advisory group member, highlighted the significance of these dedicated funds. He noted that the TAT currently raises about $1.1 billion annually. Most of this goes to the general fund. The new fee ensures a specific allocation for environmental projects.

Mufi Hannemann, President and CEO of the Hawai‘i Lodging and Tourism Association, confirmed the industry's support for the green fee. He pointed to safeguards put in place by the Legislature. These safeguards ensure a direct connection to the tourism industry's environmental impact.

Community Input and Transparency

The new law allows each county to suggest how funding can be applied to tourism-related environmental programs specific to their area. This localized input is a key feature of the legislation. Once programs are identified with county input, the Legislature and the public will have an opportunity to review and comment.

Dawn Chang, chair of the state Department of Land and Natural Resources (DLNR), thanked the governor and Legislature for their support. She views Act 96 as a dedicated funding source for a resilient Hawaii. It will also supplement DLNR's ongoing work.

"We manage 1.3 acres of land, three miles of ocean waters and everything in between. So, do we need help? Yes. What are our urgent needs? Many," Chang explained. "Visitors come here for a particular reason. Our mission at DLNR is to preserve and protect these natural resources but we cannot do it by ourselves."

Chang emphasized the need for collaboration. This includes working with the community, other government agencies, and industry members. The shared responsibility aims to preserve Hawaii's natural beauty.

Ensuring Funds Reach Intended Projects

A primary concern for the Green Fee Advisory Council is ensuring the funds are used as intended. Mikulina stressed that the green fee must not be absorbed into the general fund. It must be clearly earmarked for specific projects.

These projects should focus on building climate resilience. They must also support natural resources. Importantly, they should promote sustainable tourism and a regenerative visitor experience.

Governor Green stated, "This Green Fee is a generational commitment to protect Hawaii’s future. Under the leadership of Jeff Mikulina and this advisory council, every dollar collected will work smarter and harder — to safeguard our natural and cultural treasures, build climate resilience and share responsibility with visitors for the stewardship of our islands."

The public can track the council's progress and provide input through its website, greenfeehawaii.org. The website launched recently. Mikulina encouraged public participation in shaping the process, criteria, and ultimately, the funded projects.

The Green Fee Advisory Council is also hosting a public webinar. This session will discuss the council's purpose and approach. It will also offer a preview of the upcoming process in the coming months. Community members interested in attending can register online.

This new green fee represents a significant step for Hawaii. It aims to balance the economic benefits of tourism with the critical need for environmental protection and climate resilience. The collaboration between government, industry, and the community will be key to its success.