Rail tax proposal
stirs new requests

Lawmakers argue that
revenue increases might be
better spent on other priorities

Gov. Linda Lingle's plan to give counties the option to raise taxes for mass transit has triggered calls in the state Legislature for other tax increases to fund different needs.

Key Democrats in both the House and Senate are now looking at using the money generated by a tax increase for other needy state programs, ranging from education to drug treatment.

Lingle concluded a summit on transportation last month by recommending that the state allow the counties to raise taxes. The money would be used to help build an estimated $2.6 billion Honolulu light rail transit system.

Lingle's plan was not supported by Republican legislators, but Democrats said that if Lingle has taken the critical first step of deciding to allow taxes to climb, perhaps they should look at where the extra money would do the most good.

"We are underfunded every place and have been for years," said veteran Maui Democrat Rep. Joe Souki. "If you are going to pass a tax for rail, but at the same time you don't take care of the basic needs of the state, you are being kind of hypocritical."

Lingle said Friday that her reaction "would not be very positive" if the Legislature handed her a tax increase bill.

"We need to live within our means," she said.

Senate Majority Leader Colleen Hanabusa (D, Nanakuli-Makua) said that while she doubts the public would approve of any tax increase, the Legislature should still examine the issue.

"If the administration is willing to consider a tax increase for transportation and rail, then I think the discussion should go to other items which for me are a lot more critical: education, drug treatment, prisons and the homeless," she said.

"I think the reality is that we can not just stay stagnant. The needs of the state have changed.

"She (Lingle) has taken a major leap and I don't think she should be criticized for taking that major leap," Hanabusa said.

Still others, such as House Speaker Calvin Say, are urging the Legislature to look before it leaps. "I am cautious and leery because there are taxes flying all over the place," he said.

He added that the Legislature would find it difficult to allow the counties to raise taxes for transit and then come back and raise other taxes for schools or prisons.

"You would be putting transit up against education, and there are so many other demands out there," Say said.

The chairmen of the House and Senate transportation committees, who both support a tax increase for a city transit line, acknowledged that, if pushed, they would rather raise taxes for education than for mass transit.

Senate transportation chairman Cal Kawamoto noted, however, that in a decade, the need for a rail system will be as pressing as today's need for improved educational facilities.

"I can see raising taxes for education and I can see raising taxes for transportation," said Kawamoto (D, Waipahu).

Like Hanabusa, Kawamoto praised Lingle for endorsing a tax increase, saying it is impossible for the city to build a transit system without it.

Kawamoto's House counterpart, Rep. Souki, said the solution is to raise the state excise tax high enough for the state and the counties to split the new money.

Just proposing a tax increase "took a lot of courage on Linda's part," Souki said, but he added that the state has more fiscal problems than the county.

"If anybody should be raising taxes, it should be here, but once you give them (counties) the ability to raise taxes and you have the highway tax coming in, it will be a cold day in hell before we can take care of our own needs," Souki said.

He speculated that raising the excise tax a percentage point, to 5 percent from 4 percent, and splitting the money between the state and counties would be a solution.

"The counties could use theirs for whatever they want, rail or their own particular needs," Souki said. "This is an ideal time to work out a compromise."

Some GOP House members, still struggling with Lingle's tax increase call, vehemently rejected Souki's idea.

Rep. Galen Fox, the House GOP leader, said there is a need for a transit system and one doesn't exist now, so new money is needed.


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