Should the Big Island chip in to pay for Honolulu’s rail?
Several Hawaii Island lawmakers are opposed to having neighbor island taxpayers shoulder some of the burden for Honolulu’s cash-strapped rail system. Others are taking a wait-and-see approach.
The idea of raising the general excise tax statewide to help pay for the rail project is one of several options being considered by the Legislature. Another option would increase the transient accommodations tax on hotels and short-term lodging, either statewide or for Oahu only, with the extra going to the rail project.
Or, Oahu could pick up all the costs itself with an increased or extended GET, allowing the rail authority to post bonds to pay for the project.
Those scenarios are floated in a 52-page slideshow created by the Senate Ways and Means Committee, according to an article Monday by Honolulu Civil Beat, and confirmed with the Senate Ways and Means chairman’s staff.
But right now, they’re just that — scenarios, said Sen. Lorraine Inouye, a Democrat whose district stretches from Hilo through Waimea and into Kona. She’s chairwoman of the Senate Transportation and Energy Committee.
“No deals have been made with the House on any options before us,” Inouye said Tuesday. “In our research we have looked at all incomes from previous years what each county has contributed on GET and the TAT and what was distributed to them as well. So we have an idea the impacts it will have to the neighbor islands.”
The Legislature plans an Aug. 28-Sept. 1 special session to try to work out a plan, after House-Senate compromise attempts failed to reach consensus in the regular session earlier this year. The state is trying to help Oahu make up a $1.4 billion shortfall in the $10 billion project.
A House-Senate informational briefing is slated for Monday, “due to the increasing skepticism over the management of the rail system and the credibility of the information provided to the Legislature,” according to the Senate notice.
The meeting, open to the public, is scheduled for 10 a.m. at the state Capitol in Honolulu. Testimony can be submitted via email (TRETestimony@capitol.hawaii.gov) at least 24 hours before the meeting begins.
“I have very great concerns about any rail plan that would burden our neighbor island people for an Oahu project,” said Sen. Josh Green, D-Kona.
Sen. Kai Kahele, D-Hilo, who serves on the Ways and Means Committee with Inouye, said he’s in favor of the rail project being completed. There are other ways to pay for it though, he said.
The Hawaii County Council so far has rejected an optional excise tax surcharge that would have gone to county transportation projects. The new option would have the state impose an increase without allowing the counties any say. The money, instead of going to county transportation projects, would go to Honolulu.
“It should not, and my constituents seem to vocally agree,” said Sen. Russell Ruderman, D-Puna, Ka‘u. “In my district, our only highway is the deadliest road in the state. So we have our own urgent needs.”
Rep. Joy San Buenaventura, D-Puna, agrees. She’s on the House Transportation Committee, one of five committees conducting Monday’s hearing.
“Only Honolulu should pay for rail. Puna residents go to Oahu rarely and will not likely benefit from rail,” she said. “They come to Oahu for work or medical reasons. I do not know any who go to Ewa (a planned rail stop) regularly.”
Richard Creagan, D-Ka‘u, thinks supporting rail is just sending good money after bad. But if it’s going to continue, the neighbor islands shouldn’t be pitching in, he said.
“I certainly don’t support unilaterally raising the GET on counties other than Oahu to support rail,” Creagan said.
Rep. Richard Onishi, D-Hilo, said the county twice had the chance to raise its GET surcharge for roads, and didn’t do it. Property taxes are the county’s revenue source, not TAT and GET, Onishi said.
“We’re not looking to increase any county taxes,” Onishi said. “These are not county taxes. They’re state taxes.”
The TAT allocations to the four counties have been capped at $93 million, with Hawaii County receiving 18.6 percent, or $18.3 million.
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.
