Picking apart the $50 fee

by Stan Fichtman, PoliticsHawaii.com July 23, 2022

It would seem that during the “Super Debate” that happened on Thursday, the 21st of July, at the Council for Native Hawaiian Advancement convention, Josh Green, candidate for nomination for Governor in the Democratic Party, had to be schooled as to what Hawaii is.

It started with Green coming up with a policy statement to address “over-tourism”. In his presentation, he outlined a long-studied “green fee” idea of charging tourists a fee to come to Hawaii. He then proceeded to add to the idea by outlining how much money the state would receive, and other places that are doing it.

For the readers’ benefit, here is what Green said,

GREEN: A recommendation, and I put up a 10-point plan on climate change to have a climate impact fee, which would be $50 for every individual that travels to the State of Hawaii over age 12. This can generate between $350 to 400 million dollars per year, and that will be the mechanism we use to pay for the roads that are falling into the water, to pay for moving hotels back, though those investors should pay for it themselves, in partnership with the state for state resources. This is the way to also to shrink over tourism because we have too many people simply coming to Hawaii.

Kahele countered Green with this response,

KAHELE: (asked by the moderator what would be the policy as governor) I need to address what the Lt. Governor said because he said now three times this “climate impact fee” he talks about. We aren’t even sure that it’s constitutional, whether it violates the US Constitution to levy a climate impact fee against a tourist that comes to Hawaii. That does not help to reduce tourism, that just continues to tax the tourist already coming here. That is not going to dis-incentivize tourists coming here. So I think that this is something we need to address.

Unconstitutional he says? Green comes back with the only answer that he could try to give, to counter. That set up a back and forth that even a campaign manager would be facepalming if they were managing Green’s campaign,

GREEN (in response to Kahele) It is constitutional, it’s also being done in countries across the world, Europe just started it as well….
KAHELE (in response to Green) We are not Europe
GREEN: Yeah, I am aware of who we are, Congressman, we are Hawaii, and I also spoke to the President of Palau…
KAHELE We are not Palau

To the reader at this point, one can assume that Green either thinks Hawaii is something else besides a State in the United States, subject to the Constitution of the United States. Or that he is signaling his desire that Hawaii, for this debate, is all of the sudden its own country. Well, Vicky Cayetano was asked about this. She took the opportunity to remind Green of what Hawaii was,

CAYETANO (asked to provide her opinion on the exchange) Yes well I would just like to comment, and I think what the Congressman is saying, Lt. Governor, is while well-intentioned, Hawaii is not a country, this may be something at the federal level that has to be looked at. Europe, Palau, those are all countries, so I’m not sure if it is constitutional. I think that is the point he is making.

To those that are informed and understanding of the laws of Hawaii, what Green faced from the responses of Kai and Vicky was nothing less than a bump-set-spike not only on the idea, but the bigger issue that he understands what the law will provide, and not provide, in this idea.

Let us dig a little deeper into what Green is looking at, and what the source document says.

BACK IN SEPTEMBER 2021, a report entitled “Hawaii Visitor Green Fee, A report to the Hawaii Tax Commission” was issued to address what a green fee would look like for Hawaii. It was written either by or for an entity called “Green Fee Hawaii”. According to its website, is an organization advocating for the implementation of a fee for those entering Hawaii.

Many of the points made in this six-page report were picked up by entities like the University of Hawaii Economic Development Organization (UHERO), which cited the report in their report on the matter and promoted on the Green Fee Hawaii website.

It has been told to this blogger that the core report and the follow-up are what built Green’s policy on this matter. So in pointing out a “mother document” to all this, we’ll be citing here the Green Fee Hawaii report to the Tax Commission.

NOW ONE COULD SAY “ah, a paid-for, biased report that conveniently says that green fees for tourists coming to Hawaii are a good thing”. And for the uninitiated who only read the headlines, that could very easily be assumed. However, one piece that Green, UHERO, and Green Fee Hawaii are leaving out is one section of the report noting the reality of implementing a $50 a head green fee (emphasis added by the writer for reader focus),

In Hawai‘i, it is in theory legally permissible to charge visitors for use of natural resources, and existing jurisprudence and litigation have upheld this as the site level, for well-known sites such as Hanauma Bay. However, in practice the legality of implementing this approach at the state level is somewhat difficult and would have to thread a narrow implementation pathway in order to not run afoul of constitutional issues that protect the free movement of citizens, interstate commerce, and equal protections. The key implementation challenge, from a legal perspective, is the point of capture. This would have to be administered at the state level (e.g., via a mandatory system such as the Safe Travels system, or via a voluntary system), and would need to be implemented in such a way that does not restrict US citizen’s rights to travel or other fundamental issues such as opportunities for employment. A collection method that is residence-neutral (i.e., does not discriminate between residents versus non-residents) is in theory more valid, but this would create a burden on local residents. A differentiated fee schedule (i.e., visitors pay more than residents) may be viable, as numerous states, including Hawaii, already charge different rates for visitors versus residents for a variety of services and programs (e.g., tuition at the University of Hawai‘i). Additionally, it is illegal to add a “tax, fee, head charge, or other charge” on air commerce (i.e., plane tickets) due to the federal Anti-Head Tax Act. An airport authority tax could be levied on tickets but those funds must be restricted to supporting the operating costs of the airport and cannot be used for natural resources more broadly.

SO WHAT IT BOILS DOWN TO is that if Green becomes governor, and he wants to implement a Hawaii tourist entry fee, he would have to find a way to get around these items of law. The first is the US Constitution itself in the Commerce Clause – article 1, section 8 of the Constitution.

The other is the Anti-Head Tax Act (49 U.S. Code § 40116 – State taxation) which says,

Prohibitions.—Except as provided in subsection (c) of this section and section 40117 of this title, a State, a political subdivision of a State, and any person that has purchased or leased an airport under section 47134 of this title may not levy or collect a tax, fee, head charge, or other charge on—

(1)an individual traveling in air commerce;

(2)the transportation of an individual traveling in air commerce;

(3)the sale of air transportation; or

(4)the gross receipts from that air commerce or transportation.

Of course, this would assume that Josh Green realizes and understands that Hawaii is part of the United States and is subject to the federal laws that oversee the states, like the federal constitution which, in the State of Hawaii Constitution, it says in the preamble, “The Constitution of the United States of America is adopted on behalf of the people of the State of Hawaii.”

With this laid out, it’s clear to this humble blogger that, while Green has tried to win voters with an idea that sounds good to those who care, the woeful lack of understanding of the laws that regulate this, and even knowing what Hawaii is, could be notes of concern as voters check their boxes on their ballots.