Hawaii Hikes Tourist Tax to Fund Ambitious Climate Change Efforts

Hawaii is shaking up its tourist playbook, with a new Senate bill that takes aim at both vacationers’ wallets and the looming threat of climate change. Senate Bill 1396, which has cleared the state Senate, is set to hike the tourist tax on Hawaii hotels to 11% starting January 1. That’s not the end of it though—the rate will climb again to 12% the next year, according to the bill’s text.

Where’s all that extra cash going? A hefty portion will flow into the "Climate Mitigation and Resiliency Special Fund" and the "Economic Development and Revitalization Special Fund." Translation: the state wants to use those funds for projects that tackle climate change, from adaptation and resiliency to hiring consultants and extra hands on deck. Honestly, if there’s one place that could use a climate safety net, it’s the islands that are in the crosshairs of Mother Nature every hurricane season.

Experts believe Hawaii is the first U.S. state to try something this bold, as confirmed by reports from Travel Tomorrow. The bill’s backers argue it’s time to invest in serious strategies to protect communities, especially after the devastating Lahaina fire in August 2023, which tragically killed 102 people and caused $5 billion in damage. That disaster, sparked by wind-damaged electric equipment, was a sobering wake-up call for the islands.

It’s not like Hawaii was ever a bargain destination, and this tax hike might make some vacationers do a double-take at their hotel bill. The state already slaps a 10.25% tax on short-term rentals, with each county able to add up to 3% more. Toss in a nearly 5% general excise tax, and you’re looking at a tourist tab that can edge close to 19% in some spots. Aloha, sticker shock.

Still, there’s strong support for the bill. State Rep. Adrian Tam called it a huge step for safeguarding Hawaii’s delicate ecosystems and ensuring that both residents and visitors can enjoy the islands for generations—if they can afford the trip, that is. With 9.6 million visitors flocking to Hawaii in 2023, there’s no shortage of tourists to help foot the bill.

Governor Josh Green is expected to sign the bill into law soon, making Hawaii not just a dream escape, but a pioneer in using tourist dollars to combat climate change. Not every day you see paradise go green in more ways than one.