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Mayor Kirk Caldwell wore one of his sharpest Sig Zane shirts to the Hawaii Legislature Monday and brought along a couple of City Council members to help him make his best pitch for more money for rail.
At stake were three bills related to the general excise tax surcharge levied on Oahu voters — a fee the mayor and the council insist must be extended indefinitely beyond a scheduled 2027 expiration date.
Without the extension of the GET tax, the mayor warned, rail would be in peril, in no small part because the Federal Transit Administration would demand $1.55 billion for the project be paid back. Caldwell said about $900 million of that money was already encumbered.
Mayor Kirk Caldwell, Honolulu City Council members at his side, told Hawaii state senators Monday how important it is to extend Oahu’s GET surcharge and redirect the state’s 10 percent skim of the fee to the city in order for rail to be completed.
Cory Lum/Civil Beat
Except for a few sharp words from Sen. Laura Thielen — who accused the mayor of wanting to place a greater tax burden on Oahu voters by using some of the state’s administrative fee on the tax for neighbor island transportation projects — Caldwell and the council took little flak from the two Senate committees considering the bills.
By the time the hearing ended — around 6:30 p.m., pushed back by an earlier hearing that ran over an hour long, in part because of a power failure at the Capitol that killed the air-conditioning and prevented the delivery of online testimony — the panels said they planned to kill two of the bills but allow the third GET legislation to live for another day.
One of the victims was Senate Bill 1176, Caldwell’s favored vehicle for addressing the surcharge. It would extend all four counties’ authority to establish and collect a surcharge on the GET and allow a county’s share of the tax to be paid to the county on a monthly basis rather than quarterly.
Another bill dying Monday was Senate Bill 1276. It called for repealing the state’s 10 percent administrative fee (more commonly called “the skim”) but also would “sunset” by the end of this year unless the City and County of Honolulu comes up with way to pay for rail construction with the help of the county’s own money.
It was a packed conference room Monday for perhaps the most important issue before lawmakers: how to pay for Honolulu’s over-budget rail system?
Cory Lum/Civil Beat
Caldwell said he was not crazy about SB 1276. He likes getting the skim revenue but says it would only provide about $300 million over the next 10 years when rail needs about $2 billion to complete the route as planned — 20 miles, 21 stations, from East Kapolei to Ala Moana.
The measure that stayed alive, however, was Senate Bill 1183, which the mayor likes. It would extend the surcharge in perpetuity and let the state take a portion of the revenue for state transportation projects. It would also be paid to the county every month.
Because of the late hour (the committees lost their quorum for voting), decision making was scheduled for Wednesday afternoon on SB 1183.
But the plan is to amend the bill to delete any reference to a 10 percent administrative fee and replace it with an as-yet-to-be-determined flat dollar amount.
Sen. Lorraine Inouye is the lead author of a bill regarding the GET for rail.
Cory Lum/Civil Beat
Nor will any money from the skim go to the state Department of Transportation, which seemed to heed concerns from Thielen and Council Chairman Ron Menor’s about any Oahu money going to the other counties.
The mayor, council members and officials from the Honolulu Authority for Rapid Transportation patiently and politely answered lots of questions from the Senate committees.
For example: How much does rail cost now? ($8.2 billion.) How will the city pay for operations and maintenance of rail once it’s up and running? (Three bills are already going before the council.)
Transportation and Energy Chairwoman Lorraine Inouye wanted to know how much it costs the state Department of Taxation to figure out how much money comes from Oahu’s surcharge. A DOTAX spokeswoman said the amount was not calculated because GET is received as a lump sum.
Mostly, Monday’s hearing showed lawmakers wanting specific numbers on financing rail and generally sympathetic to helping the city. Inouye’s committee and Clarence Nishihara’s Public Safety, Intergovernmental and Military Affairs Committee, were respectful of the city and HART folks.
Less clear is how any GET bill might fare should it make it to Jill Tokuda’s Ways and Means committee. She has been a far harsher critic of how the city has handled rail.
Should SB 1183 or Senate Bill 938 (it’s another skim repeal bill, one to be decided on Thursday afternoon by Nishihara’s committee) make it past WAM, the bills have to cross over to the House. That’s where Finance Committee Chairwoman Sylvia Luke is sure to have her on tough questions for the city and HART.
Expect to see Kirk Caldwell wearing Sig Zane and being on his best behavior many more times before session is over.
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