HTA Hearing Uncovers an Old Story: The State Still Doesn’t Pay on Time
by Stan Fichtman, Politics Hawaii, June 25, 2025
On Monday, the 23rd of June, a joint Hawaiʻi House and Senate meeting—with members from the “tourism-focused” committees in each—met to hold an informational session about the current issues plaguing the Hawaiʻi Tourism Authority (HTA).
When this blogger was told about the hearing, my initial reaction was, “I’ll watch the highlights later on the 6:00 news,” since the issues surrounding the Authority—and the way legislators have approached them—are already fairly well known.
However, there’s always that one nugget that comes out in these wide-ranging meetings that sheds light on something new. In this case, it has to do with paying the bills.
According to the report on the hearing from KHON 2 News, there was discussion about how the Hawaiʻi Visitors and Convention Bureau (HVCB)—which has a contract with HTA to market Hawaiʻi to the continental U.S.—had not been paid on time. The payments were reportedly so delayed that HVCB had to take out a bridge loan to cover its expenses. It then turned around and charged HTA not only for the unpaid amount but also nearly $800,000 in interest from that loan.
From this blogger’s perch, that loan must have been both substantial in amount and taken at a steep interest rate.
As for whether HVCB was eventually made whole, the report didn’t say.
Still, this blogger wasn’t surprised. This is not the first time this blog has covered a story like this. Readers may recall the case of SMS Research and Marketing, which also had to take out a high-interest bridge loan just to stay afloat while another state department delayed payment on a contract. Eventually, as reported here, SMS went out of business and was sued by the lender for non-payment.
After Politics Hawaiʻi broke the SMS story in October 2024, several individuals with knowledge of state contracts came forward to say they, too, had experienced delays in receiving payment from the state, each citing different reasons why payments were late. Some of that was reported in a piece that became part of the “SMS series.”
These delays put private companies in financial jeopardy, and in many cases, bridge loans from lenders of last resort—with punishing interest rates and terms—are the only option. In the best-case scenario, some entities get by and are eventually made whole, like HVCB. In the worst-case scenario, some never recover and are relegated to obliteration, like SMS.
It seems that even the largest of contractors that work with the State of Hawaii find themselves in a cash crunch, forcing them to take loans and charge the state for the interest on those loans.
But to this humble observer, the bigger question is: where does this leave the reputation of the State of Hawaiʻi as a fair partner when it comes to fulfilling agreements after services are rendered? The answer: not good. Not good at all.
The state continues to seek applications for services and award contracts. But the level of trust any vendor might have in the State to “pay its bills on time” is increasingly strained, especially after revelations like this one, where once again, a contractor had to secure a loan just to keep operations going due to delayed payments.
The State of Hawaiʻi, in this blogger’s humble opinion, should be better than this. The fact that this has happened again should be disappointing—both to the residents who rely on these services, and to the government itself, for being seen in such a low light.
If the State truly wants the best from its contractors, it must ensure that when a bill is submitted and the work is complete, payment is processed without unnecessary delay. Yes, questions can arise (this blogger has been through several episodes like that), but if everything is square and clear, the check should be cut.
Promoting the state as a place to do business shouldn’t come with the unspoken caveat: “Hope you’ve got a good banker for bridge loans—because we might not pay you on time.” That’s not exactly a winning marketing line.