Transit tax dispute fades as mayor backs off threat to sue state
Mayor Mufi Hannemann is backing off his threat to sue the state, now that Gov. Linda Lingle is talking with the City Council to resolve the disagreement over whether the state or city will collect the new transit tax.
"It's less of an option today than it was yesterday because, as I said, she's now personally involved," the mayor said by telephone yesterday from Salt Lake City.
"I was serious about it. If I was still facing tremendous reluctance by the (Lingle) administration (to collect the tax), then you know what, we've really got to consider it. But now they're moving off the dime, and she is communicating with the city through the City Council -- and that's fine."
Hannemann has spent the week on a transit-related mission, first attending the largest rail industry conference in New York, then to Washington, D.C., to talk to federal transportation officials and congressional leaders. He is winding up his trip with visits to Salt Lake City yesterday and Denver today to look over the rail systems.
The 0.5 percent general excise tax surcharge begins Jan. 1 so the city can use the $150 million in revenue to fund transit projects including a possible rail transit system, which Hannemann supports.
While the law has the state collect the tax, the governor wanted state lawmakers to designate the city to collect it. A bill that would have appropriated $6 million to help the state Tax Department prepare for the collection did not pass.
Hannemann tried to get the City Council last week to approve a $5 million guarantee to help the state, but the Council said no.
Lingle then said that the state could not collect the tax without funding. Hannemann suggested that in that case, he would sue.
Before he left on his trip, Hannemann sent a letter to Lingle asking why the state could not collect the tax, which the mayor said yesterday he would still like answered.
The mayor said he had been in contact with Council Budget Chairwoman Ann Kobayashi, who has been meeting with Lingle Chief of Staff Bob Awana.
Whatever compromise is reached would need to be approved by his administration, Hannemann said. "She's apprising me of her discussions that Bob Awana is having with them, so to me we're all on track."
Earlier this week, U.S. Rep. Neil Abercrombie offered to try to broker a compromise between the city and state.
"I think that, again, if everybody will step back, take a deep breath, exercise a little good will and hopefully without too much adult supervision, I think we can get started," Abercrombie said.
The congressman has been shepherding legislation through the House to get money for Honolulu's transit project. The House approved $250,000 in seed money this past week.
But the mayor said he had met with Abercrombie yesterday and told him, "Don't worry about it, it's going to happen."