House Speaker Saiki Update on Honolulu Rail Funding

Jul 24, 2017

House Speaker Scott Saiki fielded questions from members of the Kokua Council for Senior Citizens Hawai'i.
Credit Wayne Yoshioka

The State Legislature is scheduled to convene in Special Session next month to discuss continued funding for Honolulu’s Rail Transit System.  As HPR’s Wayne Yoshioka reports, legislative leaders remain hopeful they will be able to reach an agreement on a funding source. 

“The City’s estimated cost for rail is $8.136 billion and that does not include the cost of financing.”

House Speaker Scott Saiki told members of the Kokua Council for Senior Citizens Hawai’i that lawmakers will be seeking an agreed to source of state funding for the Honolulu rail transit project when they meet in special session August 28th.

“Between now and the year 2024 there is a shortfall every year in the rail budget, meaning that expenses exceed revenue in each of those years.  And this is based on the City’s numbers.  It totals up to about   $1.38 billion.”

Saiki says the current point-five-percent General Excise Tax surcharge is not enough to make up for that 7-year funding gap to 2024.  He says the House proposed an increase in the Transient Accommodations Tax to make up for the shortfall but that measure was rejected by the full Senate.  The Kupuna Caucus of the Democratic Party of Hawai’i is supporting the House proposal to fund rail.  Scott Foster is Caucus chair.

“Our steering committee voted to support the House position on increasing the TAT.  Whether you support the transit or not, let’s get it built, get it funded and get it operating.  Until we get the 10 miles done, we can’t really move on the –hopefully – affordable housing  on the existing 10 miles that has been constructed.”

But, at the State Capitol, Senate Majority Caucus Leader, Brickwook Galuteria, who represents District 12: Waikiki, Ala Moana and Kaka’ako, says not all lawmakers are in agreement with the House.   But, personally, he feels that a portion of the Hotel Room Tax or TAT could be used to fund rail.

“We’re taking a look at the TAT at this particular point because it is an opportunity to get to the end game a lot quicker.  So perhaps a combination, but certainly we’re not going to be accepting the original 2-point whatever that was that the House had proposed because it won’t sit well with a whole bunch of people, especially the travel industry, and that’s part of the district I serve.”

Galuteria says visitors who pay the biggest share of the hotel room tax will also benefit from completion of the rail transit project through increased mobility.  But, House Speaker Saiki says extending or increasing the GET will further handcuff the state in the future.

“When the legislature is forced to increase the General Excise Tax to pay for rail, to pay for a City project, it really prevents future legislatures from increasing the General Excise Tax for state purposes.  So all the things we’ve talked about today, Medicaid, Long Term Care, all of these programs, it’s gonna be difficult to raise more revenue in the future to pay for all of these other state-wide, unmet needs.”

Saiki says of the current 51 House members, 39 or 75 percent of the members, were not in office twelve years ago when the Legislature voted to increase the GET to fund rail.   Wayne Yoshioka,  HPR News.