Context:

Hawaii lawmakers have passed groundbreaking legislation to increase the state's lodging tax by 0.75%, alongside a new 11% tax on cruise ship bills, to fund environmental protection and climate change defense initiatives. This new tax is expected to generate nearly $100 million annually, which will be dedicated to projects such as replenishing sand on Waikiki beaches, securing roofs against storms, and removing invasive grasses linked to wildfires. The legislation reflects a balance between sustaining the tourism industry and addressing environmental sustainability, as highlighted by Democratic Rep. Linda Ichiyama. Governor Josh Green supports the bill, emphasizing that while the tax increase is minor, it serves a critical purpose in protecting natural resources, which he believes will be welcomed by tourists. Concerns remain about the potential impact on tourism, with some fearing Hawaii may become too expensive for visitors despite the positive environmental intentions of the tax revenue.

Dive Deeper:

• The new legislation introduces a 0.75% increase on Hawaii's lodging tax, applied to hotel rooms, timeshares, vacation rentals, and other short-term accommodations, along with an 11% tax on cruise ship stays based on their duration in Hawaii ports.

• Estimated to generate nearly $100 million annually, the revenue will fund environmental projects like sand replenishment on Waikiki beaches, installation of hurricane clips for roof protection, and removal of flammable grasses to prevent wildfires.

• Governor Josh Green supports the tax increase, believing it is minor enough not to deter tourists and asserting that visitors committed to environmental preservation will appreciate the initiative.

• The legislation marks the first of its kind in the U.S., where a state lodging tax is explicitly aimed at funding climate change mitigation and environmental sustainability efforts.

• Concerns exist regarding the cumulative tax rate, which will increase to 18.712%, potentially making Hawaii one of the most expensive destinations, leading some to worry about its effect on tourism.

• The bill received broad support in Hawaii's Democrat-controlled House and Senate, with wide margins of approval, reflecting a collective acknowledgment of the importance of environmental issues.

• Visitor opinions vary, with some, like Zane Edleman from Chicago, expressing willingness to support the tax if the state provides clear evidence of its environmental impact and benefits.