HTA must open fi­nan­cial books

Honolulu Star-Advertiser - - VIEWS & VOICES -

Hawaii tourism is an in­dus­try, in­dis­putably part of the pri­vate sec­tor, with busi­nesses com­pet­ing for their share of the mar­ket­place. But it’s also the foun­da­tional el­e­ment of the state’s econ­omy, in which the pub­lic has in­vested heav­ily.

And that means the tax­pay­ers, who have con­trib­uted mil­lions to­ward bol­ster­ing the state’s eco­nomic en­gine, own a piece of it. They de­serve to know how their money is be­ing spent.

That does not seem to be the as­sump­tion of the Hawaii Tourism Au­thor­ity, which has been less than forth­com­ing with in­for­ma­tion of­fered to the pub­lic’s elected rep­re­sen­ta­tives.

And this week, mem­bers of one state Se­nate panel right­fully sounded the alarm over what they de­scribed as an opaque agency whose fi­nan­cial re­port­ing has been woe­fully short of de­tails. The sit­u­a­tion is all the more woe­ful for the fact that the au­thor­ity is pub­licly funded.

The Se­nate Ways and Means Com­mit­tee de­liv­ered a smack­down of the HTA for its fail­ure to sub­mit a bud­get with mean­ing­ful in­for­ma­tion: It lacked break­downs for in­di­vid­ual pro­grams.

Fur­ther, leg­is­la­tors noted at the Tues­day pre-ses­sion brief­ing, the agency gave no ra­tio­nale for why it bud­geted $93.2 mil­lion for the past year and $89.9 mil­lion in 2017. That’s far more than what’s al­lot­ted an­nu­ally: $82 mil­lion from the tourism spe­cial funds.

This, law­mak­ers charged, seemed in­ex­pli­ca­ble given that it’s hap­pen­ing dur­ing a red-hot vis­i­tor mar­ket. Ac­cord­ing to the HTA an­nual re­port, tourism ex­pe­ri­enced in 2016 the fifth con­sec­u­tive year of record-break­ing growth.

Fi­nally, they won­dered why HTA is re­mit­ting to the state only $20 mil­lion of the $26.4 mil­lion yearly in­ter­nal debt ser­vice on the Hawai‘i Con­ven­tion Cen­ter.

State Sen. Jill Tokuda, who chairs Ways and Means, has or­dered HTA of­fi­cials to de­liver four years’ worth of ac­tual spend­ing and ac­tual rev­enue — data that she said the Leg­is­la­ture has not re­ceived pre­vi­ously.

And it’s not that the law­mak­ers haven’t tried. Ways and Means mem­ber and Tourism Com­mit­tee Chair­man Sen. Glenn Wakai re­quested bud­get work­sheets Dec. 6, and when they weren’t im­me­di­ately de­liv­ered, he made a for­mal open-records re­quest. That was de­nied, cit­ing the need to pro­tect “pro­pri­etary in­for­ma­tion” and “com­pet­i­tive ad­van­tage.”

It’s ap­palling that HTA takes this stance. As Wakai told the Star-Ad­ver­tiser be­fore the brief­ing, the law re­quires dis­clo­sure to law­mak­ers, and any pro­pri­etary busi­ness in­for­ma­tion the doc­u­ments con­tain, he can pro­tect.

Part of the prob­lem is that the agency seem­ingly is adopt­ing the per­spec­tive of a pri­vate en­tity it­self. Ge­orge Szigeti, the au­thor­ity’s pres­i­dent and chief ex­ec­u­tive of­fi­cer, said he sees the re­quested doc­u­ments as “pro­pri­etary” and with­held it with HTA board ap­proval.

“No CEO would give the road map of their com­pany’s suc­cess to their com­peti­tor,” he said. “We are com­pet­ing against other coun­tries that want our busi­ness. We don’t tell them what we do.”

But the HTA is not a com­pany en­ti­tled to take this at­ti­tude. It is a state agency, with a duty to pub­lic ac­count­abil­ity.

To that point, the Leg­is­la­ture has some ra­tio­nal con­cern about HTA sus­tain­abil­ity. Chief Op­er­at­ing Of­fi­cer Randy Balde­mor said ex­cess spend­ing was cov­ered with un­spent mar­ket­ing funds from prior years. There’s also a $14 mil­lion re­serve fund he said is ad­e­quate, but at this rate, that wouldn’t last long if there’s a down­turn.

These are wor­ri­some trends, es­pe­cially at a time when the tourism mar­ket is chang­ing. Hawaii is bring­ing in more than 8 mil­lion visi­tors, but their needs and spend­ing habits are chang­ing.

Hawaii needs to pre­pare ad­e­quately to serve this mar­ket, which re­quires in­for­ma­tion. The Leg­is­la­ture con­venes next week, and that would be a fine time for the HTA to start shed­ding its ten­dency to­ward se­crecy.

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