State lawmakers are divided on how best to bail out Honolulu’s over-budget and underfunded commuter rail project that, when completed, will be the nation’s first fully driverless transit system.

On Tuesday, leading members of the House and Senate finance and transportation committees met for the first time to discuss how the two sides will come to terms on a bill to extend the general excise tax surcharge for rail.

Currently, the project relies on a 0.5 percent GET surcharge on Oahu to pay for the project. But city officials say that won’t provide enough money by the time the surcharge expires in 2022 to build the full 20-mile system from Kapolei to Ala Moana Center because revenues are coming up short and costs have increased more than expected.

Rail GET conference committee

Top city and transit officials from Honolulu talk with state senators after a hearing Thursday at the Capitol.

Nick Grube/Civil Beat

House Finance Chairwoman Sylvia Luke offered a draft bill to cut the 0.5 percent surcharge to 0.25 percent and extend it 25 years past 2016. That’s a far cry from the latest version of House Bill 134 passed by the Senate, which would only extend the 0.5 percent surcharge for five years past 2022.

As Sen. Clarence Nishihara noted during the conference committee hearing, the Senate’s version “provides a full tank of gas rather than a half tank.”

Luke said the House wanted to limit the GET surcharge so that city officials take part in finding a solution to the project’s woes. The project is funded by the GET surcharge and a $1.55 billion grant from the federal government.

“I think it’s a good compromise measure,” Luke said while presenting the House draft. “It provides a lengthened time for Oahu to construct the rail system. At the same time it provides some incentive to the city and county to see what their commitment to the project is.”

The House version also eliminates any possibility for neighbor islands to implement a new surcharge for transportation projects. That provision is currently in the Senate draft of HB134.

Both sides now must go behind closed doors to try and hash out an agreement by May 1. Another hearing is scheduled for Monday at 3 p.m.

Read the latest House version here:

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