Council OKs funding for transit tax system
The $5 million comes from appropriations that went unused in last year's budget
The City Council approved yesterday the financing for a $5 million guarantee of payment so a private vendor can set up a computerized collection system for the mass transit tax.
The collection of the 0.5 percent tax is to begin Jan. 1. The tax is designed to fund a mass transit system for the city.
The city is putting up unused appropriations from last year's budget to finance the guarantee, targeting $2.3 million from the Police Department and $2.7 million in unanticipated property tax revenue.
The city might not have to spend any money if the state Legislature approves a $5 million appropriation next session to fund the collection of the tax, which is projected to generate $150 million a year, with the state taking 10 percent. Mayor Mufi Hannemann has said he has confidence that the Legislature will approve the funding.
State lawmakers failed to pass the funding for the tax collection system last session, prompting a disagreement between Hannemann and Gov. Linda Lingle over how to fund the tax collection.
The state and city then reached a settlement that called for the city to put up the guarantee.