Rail bill mov­ing quickly

House pan­els ad­vance mea­sure after it clears full Se­nate; fi­nal vote slated for Fri­day

Hawaii Tribune Herald - - FRONT PAGE - By NANCY COOK LAUER

A $2.4 bil­lion Honolulu rail bailout bill clipped quickly down the fast track Wed­nes­day, eas­ily clear­ing the Se­nate and its only House com­mit­tee mid­way through a week­long spe­cial ses­sion.

The full House is ex­pected to hear the bill on sec­ond read­ing to­day after a joint ses­sion of the House Fi­nance and Trans­porta­tion com­mit­tees ad­vanced the bill to the House floor Wed­nes­day. A fi­nal vote is slated for Fri­day. If ap­proved, the bill then would go to the gov­er­nor. Se­nate Bill 4 levies a statewide 1 per­cent in­crease on the 9.25 per­cent tran­sient ac­com­mo­da­tions tax ded­i­cated to Honolulu rail while set­ting the share of the TAT to be di­vided by the coun­ties at $103 mil­lion per­ma­nently.

Pro­po­nents say it’s fi­nan­cially es­sen­tial that tran­sient rentals and ho­tels from all is­lands bear the tax hike to help res­cue the over-bud­get rail project. Op­po­nents warn set­ting a prece­dent of levy­ing taxes on all is­lands for a lo­cal project on one is­land is fun­da­men­tally un­fair and could lead to le­gal trou­ble.

Rep. Nicole Lowen, D-Kona, voted no, while Rep. Joy San Bue­naven­tura, D-Puna, voted yes, with reser­va­tions, dur­ing the

joint com­mit­tee meet­ing.

“It feels like there’s no good choices,” Lowen said.

The two are the only Big Is­land rep­re­sen­ta­tives on the com­mit­tees.

Lowen had con­cerns about the TAT in­crease, but she said the al­ter­na­tive of ex­tend­ing Honolulu’s half-per­cent gen­eral ex­cise tax sur­charge 10 years, com­pared with three in the bill, also hits neigh­bor is­lan­ders.

“There’s some part of that sur­charge that gets in­cluded in the cost of goods,” Lowen said. “Any­time any neigh­bor is­lan­der or­ders any­thing on­line, they’re pay­ing the sur­charge.”

In fact, she added, all goods that come through Honolulu be­fore con­tin­u­ing on to the neigh­bor is­lands get taxed first in Honolulu.

The com­mit­tee hear­ing evolved into a dis­cus­sion of the orig­i­nal pur­pose of the TAT to off­set costs tourists add to county gov­ern­ments when they use po­lice and fire ser­vices and parks, and how those costs con­tinue to rise while the county share of the TAT de­creases and the state takes a greater share.

Hawaii County Coun­cil Chair­woman Va­lerie Poin­dex­ter, one of about a half-dozen county of­fi­cials tes­ti­fy­ing, told the com­mit­tees how tourism has taken up the eco­nomic slack after the su­gar in­dus­try left the is­land.

“Our visi­tors are al­ready be­ing taxed for county ser­vices through the TAT and our coun­ties are not re­ceiv­ing that much back,” Poin­dex­ter said.

Poin­dex­ter ques­tioned the haste the bill is go­ing through the process.

“We have not vet­ted this bill prop­erly,” she said. “We haven’t given it to the peo­ple to un­der­stand.”

“I am get­ting a lot of pres­sure … ad­vo­cat­ing for this bill to fail,” San Bue­naven­tura added.

Rep. Matthew LoPresti, an Oahu Demo­crat, pushed neigh­bor is­land of­fi­cials on whether they think the state should re­turn to the coun­ties only what they raise on their own is­lands. They’d end up with a lot less money, he told them. He be­rated sev­eral for what he called mis­in­for­ma­tion be­ing spread on the neigh­bor is­lands about how the TAT hike will af­fect them.

“A lot of us are be­ing thrown un­der the bus by your spread­ing mis­in­for­ma­tion,” LoPresti said.

The com­mit­tees quizzed Honolulu Mayor Kirk Caldwell about the project fi­nanc­ing. Not all were sat­is­fied with his re­sponses.

“No­body trusts your fig­ures,” San Bue­naven­tura told him.

Rep. Sean Quin­lan, an Oahu Demo­crat, asked Caldwell what he thought about hav­ing the neigh­bor is­lands help shoul­der the bur­den.

“I’m trou­bled by it,” said Caldwell, adding he grew up on the Big Is­land. “I tend to be sym­pa­thetic to the issues of the neigh­bor is­lands.”

Still, he added, Oahu, with 75-80 per­cent of the pop­u­la­tion, is the eco­nomic cen­ter of the state.

“The state rises and falls by what hap­pens on this is­land,” Caldwell said.

The full Se­nate passed the bill by a 16-9 vote ear­lier Wed­nes­day.

Vot­ing no were all four Big Is­land sen­a­tors, two of Maui’s three sen­a­tors and three Oahu sen­a­tors. Kauai’s lone se­na­tor, Se­nate Pres­i­dent Ron Kouchi, voted yes.

Among the sup­port­ers was Sen. Jill Tokuda, an Oahu Demo­crat who was ousted as chair­woman from the Se­nate Ways and Means Com­mit­tee after House-Se­nate ne­go­ti­a­tions on rail broke down at the end of the reg­u­lar ses­sion. She ac­knowl­edged she might be an un­usual ad­vo­cate of the bill, but said tax­ing tourists vis­it­ing all the is­lands was a bet­ter choice than con­tin­u­ing the GET on Oahu res­i­dents buy­ing life’s ne­ces­si­ties.

Sen. Josh Green, D-Kona, said he sup­ports rail but wor­ries all the state’s other prob­lems will go un­met.

“Fund­ing it should not come at the cost of ne­glect­ing all the other needs of Hawaii fam­i­lies,” Green said. “Ask your­self how many times in the last 10 years we’ve needed to solve other ma­jor chal­lenges in Hawaii but couldn’t even con­sider GET in­creases to ad­dress them be­cause we’d al­ready raised taxes and mort­gaged our fu­ture?”

Sen. Gil Riviere, an Oahu Demo­crat, agreed with Green, call­ing the rail project a “black hole suck­ing in all the pri­or­i­ties.”

“We’re just throw­ing good money after bad,” Riviere said.

The bill also gives neigh­bor is­lands the op­tion of rais­ing their gen­eral ex­cise tax by one­half per­cent to be used for roads, while ex­tend­ing Honolulu’s cur­rent half-per­cent gen­eral ex­cise tax for three years. And it re­duces how much the state takes as ad­min­is­tra­tive fees and re­quires an au­dit and more over­sight for the rail project.

The rail project, es­ti­mated to be 40 per­cent built, has seen costs al­most dou­ble from $5.26 bil­lion in late 2014 to nearly $10 bil­lion, in­clud­ing fi­nanc­ing costs. The city has a Sept. 15 dead­line to present a fi­nanc­ing plan to the Fed­eral Tran­sit Ad­min­is­tra­tion, which could re­quire the city to re­turn more than $800 mil­lion al­ready spent of a to­tal $1.5 bil­lion in promised fed­eral dol­lars.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.