‘Visitor impact’ fee inherently flawed

by Keli'i Akina, Ph.D., Grassroot Institute, March 5, 2023

When a new policy proposal gets a heavy push from a popular new governor, people sometimes forget to ask the hard questions.

That’s what the Grassroot Institute of Hawaii is for.

On Wednesday, Gov. Josh Green took to Twitter to lobby for his proposed $50 “visitor impact” fee. He promised the fee would raise $400 million annually and be used to preserve coral reefs, protect forests and watersheds, remove invasive species, help endangered wildlife and fund state and county agencies and nonprofits in their conservation efforts.

To illustrate public support for his proposal, the governor referenced a Nature Conservancy Hawaii survey that found 63% of Hawaii residents supported a visitor fee, 88% liked the idea that tourists should pay their fair share to preserve Hawaii’s natural resources, and 95% favored protecting the state for future generations.

Frankly, I’m surprised that the response to the last item wasn’t 100%. In any case, I have no doubt that the governor is sincere in his desire to protect Hawaii’s environment, and I believe that his proposed visitor fee is his way of trying to increase state revenues without increasing the cost of living for Hawaii residents.

However, respecting the governor’s intentions does not mean ignoring the flaws of his proposal. The practicalities alone are mind-boggling.

For example, we are told that this fee — formulated in SB304 as a license fee to use parks, beaches, trails and any state-owned natural area —  would affect only visitors.

The bill defines a visitor as anyone who is not a Hawaii resident. That means that if your auntie had to leave Hawaii for Seattle because she couldn’t afford to live here, but she comes back for Grandma’s birthday party, she and your cousins will have to pay hundreds of dollars to go to the family barbecue at Ala Moana Beach Park.

In addition, the bill would require signs at beaches and other public sites informing visitors that they need a license to be there and outlining the penalties for visiting the site without a license.

How would that be enforced? Would county or state officials be out roaming the beaches and parks, approaching anyone who “looks like” a visitor and asking for proof of their beach licenses? It’s not hard to imagine how that could go wrong.

And let’s not ignore that multiple respected sources, ranging from UHERO — the Economic Research Organization at the University of Hawai‘i — to the Tax Foundation of Hawaii, have repeatedly warned Hawaii policymakers that such visitor-only fees are unconstitutional.

The U.S. Supreme Court has ruled against burdening the right of Americans to travel freely, and it frowns on taxes that treat nonresidents more harshly than residents.

In other words, you can’t charge someone to enter Hawaii just because they happen to live in California or Michigan.

As for the claim the fee would bring in $400 million a year for environmental spending, we already have a budget surplus, so why are we looking for ways to increase revenues?

And what would we get for that extra spending? The only thing we know for sure is that it would create an infusion of new funds for a few nonprofits and government agencies.

Finally, we can’t overlook what this would mean for tourism, the state’s leading driver of economic activity. In fact, some of the most critical responses on Twitter to the governor’s tweet came from people who saw this as a transparent attempt to shake down tourists.

“Can you define fair share?” one person asked. “Is the 3% hotel surcharge and 10% state TAT [transient accommodations tax] not already taxing visitors highly? I respect Hawaii, but this is just fleecing people. Should we in California levy a tax on Hawaiians when they fly over for their ‘fair share?’”

Another commented: “It’s already overly expensive to vacation in Hawaii. People will choose to travel elsewhere. The implication is that visitors are not wanted.”

I applaud the governor for addressing concerns that are important to Hawaii residents. But the visitor impact fee is inherently flawed.

Instead, we need more debate and discussion about how to balance tourism and conservation. We must avoid the economic and legal pitfalls presented by the governor’s idealistic proposal.
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This commentary was Keli‘i Akina’s weekly “President’s Corner” column for March 4, 2023. If you would like to have his columns emailed to you on a regular basis, please call 808-864-1776 or email info@grassrootinstitute.org.