Counties back
transit tax plan

The state Senate OKs an excise tax
hike of a half-percentage point

Officials of Hawaii's four counties say they are united behind granting the counties the authority to raise the excise tax to 5 percent from 4 percent to fund transportation projects, especially rail transit for Oahu.

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"We definitely want a transit system and we're going to need the local funding mechanism to secure federal funds to make the project a reality," City Council Chairman Donovan Dela Cruz said.

This comes as the state Senate approved yesterday a lesser excise tax increase of one-half of 1 percentage point, setting up a conference committee with the House, which earlier this session passed out a hike of 1 percentage point.

But critics continue to lash out at the proposed tax increase and the lack of details that accompany it.

"It forces the taxpayers to ... support a program of a train that's going nowhere," said Sen. Sam Slom (R, Diamond Head-Hawaii Kai), who along with the Senate's four other Republicans and Maui Democrat Shan Tsutsui voted against the measure.

On Monday, a meeting involving U.S. Rep. Neil Abercrombie, Mayor Mufi Hannemann, Dela Cruz, City Councilwoman Ann Kobayashi, Hawaii County Council Chairman Stacy Higa, Hawaii County Councilwoman Virginia Isbell, Maui Council Chairman Riki Hokama, city Transportation Director Ed Hirata and Honolulu Transportation Commission member Randal Ikeda discussed the excise tax legislation.

"(Monday's) meeting was really to touch base and to regroup and to just make sure that we were all on the same page," Dela Cruz said. "I think everyone left the meeting with the same message."

The bill approved by the Senate yesterday would mandate that Honolulu use any proceeds solely for the rail project, while other counties could use it for a variety of transportation projects.

The Senate also wants the tax to die at some point.

Hannemann has already said that he prefers a 1 percentage point hike in the excise tax.

His administration said if the smaller increase were to pass, it would take longer to collect the money needed to fund a rail system. And if the tax were also to be repealed at some point, it may mean Honolulu residents could have to pay more in other taxes to fund rail.

Dela Cruz said that while rail may be a centerpiece of a mass transit plan, the city would like to use the excise tax proceeds for other transportation needs, including beefing up city bus service that could be used to feed into a rail. A hike to 5 percent could raise nearly $300 million a year.

"We support Honolulu's stance that it needs to solve its transportation problems," Hawaii County's Higa said. "We're all unified in what we want to see with this legislation."

Both Dela Cruz and Higa said the issue is one of home rule.

But Slom said this bill has nothing to do with home rule or with solving transportation problems.

"This is really a squirrelly way for a tax increase," Slom said. "What we're doing is instead of looking for real solutions ... we are only simply again talking about increasing taxes."

The bill's supporters disagreed.

"If a rail system is ever built in our time, I will give up my car. ... I definitely will not use it (the car) five days a week to come into work," said Sen. Willie Espero (D, Kapolei-Ewa Beach). "I have ridden rail systems in other cities. They are very efficient, clean, fast."

Meanwhile, the Senate also approved another measure to help fund rail transit, including allowing the city to impose a tax on the value of cars -- on top of the city's weight tax on vehicles. The measure also would permit a city fuel tax increase to be used for rail transit, in addition to roads.