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So-called “roads in limbo” are the latest bargaining chip in the negotiations to extend Honolulu’s rail tax to help shore up an estimated $910 million shortfall.
On Monday, state Sen. Jill Tokuda revealed her chamber’s latest version of House Bill 134 that would extend Oahu’s 0.5 percent General Excise Tax surcharge for rail for five years from 2022 to 2027 and allow neighboring counties to implement their own tax hike.
But Tokuda and her fellow conference committee members, including Sens. Clarence Nishihara, Will Espero and Breene Harimoto, included a provision that would force counties to take ownership of certain roads that officials say are no longer under the state’s authority.
These “roads in limbo” have been a problem for the state for many decades, and have led to confusion about who is responsible for repair and maintenance of the streets.
Tokuda said the hope was to use the new provision to bring the House closer to the Senate when it comes to extending the rail tax. Last week, the House conference committee members offered a 25-year extension of the GET, but only if it was cut to 0.25 percent. The proposal also eliminated the possibility for neighboring counties to implement a surcharge.
Rep. Sylvia Luke called the new offer from her colleagues “terrific,” but indicated that House members still want more out of the negotiations. She also reiterated her discomfort with an extension of the GET, which she called a “very regressive tax.”
Luke said she would like to see the city consider using property taxes to help pay for rail, which is currently funded through GET surcharge revenues and $1.5 billion in federal grant dollars.
Luke also challenged the notion that Honolulu Mayor Kirk Caldwell and others have put forth that the GET is the best option because nearly one-third of it is paid for by tourists and nonresidents. She said that’s also the case with property taxes since nearly one-third of the revenue comes from out of state, particularly from investment properties.
The next conference committee hearing is scheduled for 1:45 p.m. Wednesday.