City Council gives initial OK to pay for collection of tax

More hurdles loom for the bill providing $5 million to keep rail transit plans alive

The City Council gave the first of three approvals last week to a bill that guarantees payment of up to $5 million so a private vendor can set up the computerized collection system for the mass transit tax.

The collection of the 0.5 percent tax is to begin Jan. 1.

In approving Bill 57, the Council went against Mayor Mufi Hannemann's suggestion that it waive two of the three required approvals and pass the bill with just one vote.

The Council instead will take up the measure at two more public meetings, which could push final approval to Aug. 16.

Budget Chairwoman Ann Kobayashi said the Council had already given its promise to support the guarantee, and the public approval process was necessary for the Council to be accountable, "especially when we're talking about $5 million in taxpayers' money."

Concerns were raised by other members over the source of the money -- unused appropriations from last year's budget totaling $2.3 million from the Police Department and $2.7 million in additional property tax revenue.

"Bill 57 further validates my impression that we need $5 million, you wave the magic wand and -- poof -- lo and behold, we suddenly have $5 million," said Councilman Charles Djou.

But several who testified worried that delaying the funding approval could send the wrong message to Congress as it considers federal money for Honolulu's mass transit.

"We are going to be weakening our position," said Toru Hamayasu, the city's chief transit planner.

First Deputy Corporation Counsel Donna Woo said after the meeting that it was not clear whether the Council's support of the guarantee in a vote last month, along with approval of the funding so far, is enough for the vendor to enter into the contract with the state.

The governor's chief of staff, Bob Awana, who led the state's effort to negotiate with the city over the guarantee, said the delay would not affect implementation of the tax collection system.