Hawaii House extends rail transit funding excise tax for two years

HART

The Hawaii House of Representatives extended the general excise tax (GET) that helps fund Honolulu's first rail transit project on April 11. The funding package will contribute an additional $1.2 billion to the project.

The action will extend Oahu’s .05 percent GET surcharge through 2029, which is expected to generate $792 million for the rail project. The House also agreed to reduce the funds it collects as a GET administrative fee by 90 percent, which will generate an estimated $397 million for the city project. The funding package brings the state’s financial contribution to the project to $8 billion, which is close to the estimated total project cost of $8.1 billion.

“This bill is an honest attempt to once again provide sufficient funds for the city’s over-priced, over-budget rail project,” Rep. Sylvia Luke (D- Makiki, Punchbowl, Nuuanu, Dowsett Highlands, Pacific Heights, Pauoa) said. “There are many more questions about the rising cost estimates that remain unanswered.”

As part of the bill, the Honolulu City Council must vote to allow city funds to be used for rail and approve the GET extension by Dec. 31, 2017 or void the additional state support. Honolulu Mayor Kirk Caldwell has voiced his opposition to using funds generated by property taxes to help pay for the project, but also recognized that it may be the only way to reach full funding required by the Federal Transit Administration’s April 30 deadline to secure a Full Funding Grant Agreement worth $1.55 billion.

“This was a reasoned approach and I would hope that reason would prevail at the city. It is incumbent upon the mayor, the city and [Honolulu Authority for Rapid Transportation] to use this opportunity to take control of the cost and its budgets and look at all viable options. Threatening the public with a property tax increase is doing a disservice to our citizens. The city must first do whatever they can to instill confidence and trust in this project. I am certain given the opportunity they will do that.”

House Speaker Joseph Souki (D-Kahakuloa, Waihee, Waiehu, Puuohala, Wailuku, Waikapu) said building rail is the largest public works project in Hawaii’s history and will provide jobs and a new mode of transportation for commuters.

“This is for the future. The burden now goes to the city. They need to have ‘skin in the game.’ Hopefully, the (City) Council will get the courage to pass it,” Souki said.

The bill now goes to a joint meeting of the state’s House and Senate conference committee.

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