The state Senate Ways and Means Committee on Friday moved out a bill that would lift the $93 million annual cap on the counties' share of hotel-room tax revenue. But senators issued warnings that the Legislature might not be able to give counties what they want because of the state's ongoing budget concerns.
Sen. David Ige, the committee's chairman, noted that the bill would have a significant impact on future state revenue.
Senate Vice President Ronald Kouchi, a former Kauai County Councilman, questioned whether counties should get a share of the higher hotel-room tax, which was raised to help the state get through the recession. The Legislature increased the tax to 9.25 percent -- up from 7.25 percent -- and then last year made the increase permanent.
Kouchi suggested that if the annual cap is lifted, counties should only get to share a slice of the 7.25 percent.
Honolulu Mayor Kirk Caldwell attended the hearing, a sign that county mayors view the bill as a priority. Maui Mayor Alan Arakawa repeated this week that if Maui does not get a greater share of hotel-room tax revenue, the county would have to raise taxes.