State Legislative Leaders Inclined to Pass Rail Funding Bill "As Is"

Aug 28, 2017

State Senate passed two rail funding bills on first reading.
Credit Wayne Yoshioka

State lawmakers started their Special Session today to focus on funding for Honolulu’s cash-strapped rail project. HPR’s Wayne Yoshioka reports. 

The State Senate convened and passed two bills that would allow 2.4 billion dollars in additional funding for the Honolulu Rail Transit Project.   The bills, if passed as is, would extend the General Excise Tax surcharge on O’ahu and raise the Transient Accommodations Tax statewide.  Senate President, Ron Kouchi, who represents Kaua’i, says raising the TAT or hotel room tax is fair, given the long history of O’ahu taxpayers funding neighbor island projects.

“The TAT is collected statewide and because of the size of O’ahu, that they have continued to support the neighbor islands with taxes that they pay here that come out to help us and so this really is the first time that we’ve talked about maybe some of it staying here versus O’ahu money being distributed tothe neighbor islands.”

House Majority Floor Leader, Cindy Evans, represents North Kona and Kohala on the Big Island.  She says the rail measures would also provide all four counties with an additional 10 million dollars from the TAT and that would benefit the entire state.

“We have not done a good reaching out to our neighbor island constituents.  I think that they really need to understand that 70 to 75 percent of the money gets generated on O’ahu.  This is our urban city and we have to all succeed and O’ahu has to succeed.”

Mayor Kirk Caldwell, with support from County Councilmembers, made another plea to extend the GET and not touch the TAT.
Credit Wayne Yoshioka

But, Mayor Kirk Caldwell repeated his claim that the Legislature’s funding is more than a half-a-billion dollars short.  Surrounded by O’ahu and Neighbor Island County Councilmembers, Mayor Caldwell,  asked that the TAT be left alone.

“If the legislature would only change one number.  The GET number by a couple more years. By 5 instead of 3.  That’s all it would take and we believe we would have the money sufficient to fund rail without jeopardizing the city finances.  And yes, it would require an amendment.  But with that, the impacts we’re talking about would be minimized.”

But, House Finance Committee Chair, Sylvia Luke, says the 8.165 billion dollar rail project is not being underfunded and the legislature used previous calculations from the Honolulu Mayor.

“His reasoning is that it didn’t include contingency.  But if you look at past testimony from the mayor’s office, HART, and the city, the 8.165 was inclusive of contingency as requested by FTA.   And for them now to say it’s 500 million dollars short is simply double-counting.”

Meanwhile, House Speaker, Scott Saiki, says state funding for rail is not the problem.

“If rail is going to succeed in the long term, then the city needs to contain costs.  And it needs to do that now.”

The joint House Transportation and Finance Committees will conduct a public hearing on the measures Wednesday afternoon.  Wayne Yoshioka, HPR News.