A Draft Rail Transit Funding Bill is Forwarded For Legislative Special Session Monday

Aug 25, 2017

Senate President Ron Kouchi (podium) announced that a compromise bill has been drafted for the Legislative Special Session to consider funding for the Honolulu Rail Transit Project. He was joined by (L-R), Congresswoman Colleen Hanabusa, Senate Ways and Means Committee chair, Donovan Dela Cruz, Senator Brian Schatz and House Speaker Scott Saiki.
Credit Wayne Yoshioka

The State Legislature unveiled a proposal to rescue the cash-strapped Honolulu rail project today.  HPR’s Wayne Yoshioka reports.

The draft bill would allow funding for the 8.2 billion dollar Honolulu Rail Transit Project.  House Speaker Scott Saiki provided the details.

“The proposal is to extend the General Excise Tax surcharge on O’ahu for 3 additional years from December 31, 2017 through December 31, 2030.  And this will provide approximately $1.046 billion.  Second, the bill will raise the hotel room tax, the Transient Accommodations Tax, by one percent from 9.25 percent to 10.25 percent for 13 years from January 1, 2018 to December 31, 2030.  And this will provide approximately $1.326 billion.”

The draft bill lifts the TAT cap for the counties by 10 million dollars to 103 million.  The measure will also require a state audit of rail spending and appoint two non-voting members to the HART Board.  Senate Ways and Means Committee Chair, Donovan Dela Cruz, says this proposal also cuts funding for HART expenses.

“HART originally came in at 1.4 billion for finance costs and we’ll be able to reduce that amount by $208 million.  We’re also not going to be paying for operations of HART, so that’s gonna include a total of $281 million; we’re not going to be paying for marketing that’s $151million.  So we can reduce the 281, the 151 and the $208 million for financing because of the way we’re using the TAT, that’s gonna save the taxpayers quite a bit of money.”

Lawmakers also project the GET will grow at 3 percent annually and the TAT at 8 percent.   Senate President Ron Kouchi says not all lawmakers and tourism officials will support this bill.  Honolulu City and County officials, including Mayor Kirk Caldwell, disapprove parts of the plan.  But, Kouchi pointed to his allies on Capitol Hill.

“You can see by Congresswoman Hanabusa’s comments and Senator Schatz being with us here, they have committed, first and foremost, that they believe that this is a sound financial plan and that they are going to go back to Washington DC and do everything they can within their power to make the case to the FTA about what we’re considering, in fact, meets their requirements.”

The draft bill will now go forward for consideration during the legislative special session that begins Monday.  Wayne Yoshioka, HPR News.