Hannemann is adamant on $3 billion transit cost
The price, down from $4 billion, means the route will be shorter than was first planned
Mayor Mufi Hannemann says he wants a rail-transit system to cost about $3 billion.
"I am insisting at this point that we build a basic no-frills system, and I want the cost to come in around $3 billion because there are those who are opposed to this project that are trying to make an issue of the cost of this rail system," he said.
But that will likely mean, he said, that the route will be shorter than the original Kapolei-to-University of Hawaii route.
"I think it's clear that it's going to cost more than $3 billion to go from Kapolei to University of Hawaii -- that much we know," he said.
Isle consumers could pay up to 4.712% tax
The state Department of Taxation has determined how much businesses will be allowed to pass on to customers when the new 0.5-percentage-point general excise tax increase begins Jan. 1.
The new tax will bring the statutory tax rate for gross receipts on Oahu to 4.5 percent, and businesses may pass on up to 4.712 percent to customers, the department said.
The Tax Department said the GET is levied on the gross receipts of a business but that on a customer's bill, the tax is shown as a percentage of the price.
By law a seller cannot collect more than the amount actually owed, the state said. So the business may choose to pass on zero percent, 4.5 percent or 4.712 percent to cover GET expenses.
As an example, the department said that when revenue is $1,000, the business may charge the customer up to an additional $47.12. Then, the business will be taxed on $1,047.12. The state will receive $41.88 and the city will receive $5.24.
The additional tax, projected to bring in $150 million a year, will be used to fund Honolulu's mass transit system.
Consultants and administration officials have told City Council members the cost of that line is about $4 billion.
The mayor said the system must also begin somewhere in West Oahu, which could rule out the line beginning somewhere near Leeward Community College.
"And West Oahu is not Pearl City or Aiea. It has to go beyond that -- as close as we can get it into Kapolei," the mayor said. "That's the ridership; that's where the potential growth."
Members of the City Council said they were told that the shorter line could start as far west as the future site of the UH-West Oahu campus on the Ewa Plain.
City Councilman Todd Apo said he is pleased to hear that the mayor wants the system to start as close to Kapolei as possible.
"That's what the system is being built for -- to handle the growth and development that's going to happen out there," Apo said.
City Council Chairman Donovan Dela Cruz, who has yet to be briefed on the mayor's plan, said rail will be the impetus for guiding land use in Honolulu.
"What makes rail so attractive is the potential for redevelopment and planned development and directing growth," he said.
Hannemann said finding a "no-frills" rail system is like buying a new car.
"Instead of buying a fully loaded vehicle, I just want something without air conditioning, without AM/FM radio, without a CD/DVD component to it," Hannemann said. "I just want something just very basic because I really feel that once people ride it, once people get the feel, I think over time we can add the different components. But I don't want to get into an argument and debate of what it's going to cost at this time, because it's clear we need it now more than ever."
Hannemann is among several rail proponents who say that if Honolulu had a rail-transit system, commuters might have been able to maneuver the traffic gridlock that occurred this past week when an H-1 freeway overpass was damaged.
The City Council will receive a recommendation from the administration from four transit alternatives -- rail, managed toll lanes, enhanced bus system or building nothing -- and is slated to choose one by the end of the year.
Hannemann said the administration could present the Council with two scenarios: one showing members how much $3 billion will buy, the other showing how much it would cost for a system from Kapolei to the University of Hawaii at Manoa.
The mayor also said that dedicated toll lanes can still be an option, but it will not be "county-driven."
Supporters of the high-occupancy toll, or HOT, lanes are the primary opponents to a rail system.
"If the state wants to drive that initiative and build it over the freeway and they have the money to do it, be my guest. But it's not going to be a county-driven initiative," the mayor said. "So I don't see that as a replacement for the light-rail system."
Meanwhile, City Councilwoman Ann Kobayashi and other urban Honolulu elected officials are planning a town meeting on mass transit Thursday at 6 p.m. at Washington Middle School.