Governor: I’ll Be ‘Agnostic’ On How Hawaiʻi Spends Its New Green Fee

Gov. Josh Green spoke at the latest Civil Cafe, held at Civil Beat’s Kaimukī offices, to discuss Hawaiʻi’s new green fee set to begin raising funds for climate- and environment-related efforts next year. (David Croxford/Civil Beat/2025)

By Marcel Honoré

Climate experts and proponents of Hawaiʻi’s new green fee will kick off next month what Gov. Josh Green has dubbed the “green fee initiative” — a process to decide how hundreds of millions of dollars for climate- and conservation-related projects will be spent.

Heading into the fall, that initiative will include community input and public meetings, Green said during the latest “Civil Cafe” event, which explored Hawaiʻi’s green fee, the first of its kind in the country, and how it might work.

Green pledged that when collections start next year state officials will provide monthly online accounting so the public can see how the money is being spent. Those state officials expect the fee to raise some $100 million annually from an additional 0.75% tax on local hotel stays and short-term stays, which will flow into the state’s general fund.

“I will be purely agnostic as to where these funds go,” Green told an audience gathered in Kaimukī. “I know that’s hard to believe because people think, ‘OK, the governor has $100 million and he or she’s going to spend it the way they want.’ It’s exactly the opposite. I want to spend it the way you want it.”

Nonetheless, Green on Monday offered several broad suggestions for how the green fee should be deployed.

The state, he said, should set aside a fixed amount of those dollars each year to float bonds that could pay for large-scale environment and climate change projects. He also hopes the new fee will attract matching funds from both private philanthropists and even the federal government which, under President Donald Trump, is rolling back efforts to address climate change.

For instance the state, Green said, is in talks with the federal administration about a funding deal to remove the worst of the 80,000 local cesspools that leak an estimated 50 million gallons of raw sewage into Hawaiʻi’s reefs and nearshore waters daily.

Green also said that he committed to House Speaker Nadine Nakamura to devote at least 10% of green fee proceeds to nongovernmental groups working to restore Hawaiʻi’s environment and protect against climate change.

The state’s chronically underfunded Department of Land and Natural Resources, he said, would be the “greatest single beneficiary.”

A 5 a.m. Gym Session Changed History

Green said he hasn’t given up on the idea of creating a special fund to hold the green fee’s proceeds, an approach lost in a compromise with legislators. He said he plans to push for that again during next year’s legislative session.

“It’s the next step in the process” and would be a more effective way to float bonds, he said. Whether legislative leaders agree remains to be seen. 

The 0.75% fee will be collected via an increase on the state’s transient accommodations tax, bringing it to 11% total beginning in January. That’s in addition to the 3% tax that counties also charge on hotel and short-term stays. It’s largely aimed at visitors, but local residents will also have to pay if they stay in a hotel or a short-term rental. 

On Monday, Green said state leaders could consider a tax credit on the fee for state residents, one similar to the food and child tax credits that already benefit some local residents.

Notably, as part of establishing the green fee and ensuring it would generate enough dollars state leaders added cruise ships to the mix. Occupants of those ships’ cabins will also be charged the short-term stay tax while in port in Hawaiʻi.

Green on Monday shared that state leaders considered an additional fee on car rentals but ultimately opted to leave those sales out, in part to keep the measure simple.

He further floated on Monday the idea of creating a Department of Environmental Sciences, to allow the state to focus more closely on climate issues, although he acknowledged this would cost money and could add a layer of bureaucracy.

Green shared that a key moment in establishing the United States’ first-ever green fee occurred during a 5 a.m. gym session, during which he ran into a local hotel executive. 

For years, the industry had staunchly opposed any increase to the state’s hotel-stay tax. During the early morning workout, Green said, the executive asked him to help explain to other hotel owners why the increase was merited. 

“That’s how that happened, actually,” Green said. “Finally, we broke the ice.”

He added that he probably would not have pushed for the green fee for a fourth consecutive year if lawmakers had declined to pass it this year.

Now that it’s a reality, “I’m not going to let this thing drift,” he said Monday.

“It took me three years to pass this darn thing and a lot of patience,” Green said, “because we needed it already — a year ago and two years ago.”

Civil Beat’s coverage of climate change and the environment is supported by The Healy Foundation, the Marisla Fund of the Hawai‘i Community Foundation and the Frost Family Foundation.