Senate transit tax plan
rouses House skeptics

A new proposal to fund a Honolulu rail-transit system was floated yesterday by the state Senate, but House leaders said it had little chance of getting on track.

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The proposed change to House Bill 1309 calls for the state to raise the general excise tax to 5 percent from 4 percent for all the counties if the City Council adopts a resolution launching the rail-transit project. Versions of the bill empower each county to vote and approve tax increases of one-half a percentage point to 1 percentage point for transportation projects.

The bill would also raise the state income tax standard deduction to $5,000 from $1,900, which would give some tax relief to lower-income wage earners.

"It would certainly give back to the people who would have to pay the burden of an additional 1 percentage point," said Sen. Lorraine Inouye (D, Hilo-Honokaa), Transportation Committee chairwoman.

But the plan failed to win the support of the House Transportation Committee chairman, Rep. Joe Souki (D, Waihee-Wailuku).

"I think this is just something for further discussion," Souki said.

"I think something will happen, but not a bill like this," Souki added. "The House position is still to give the authorization to City and County to raise the tax, because they are going to run the rail."

House Democratic leaders say that they want the counties to decide whether to raise taxes.

"The only way that the discussion can continue is if we provide the authorization," said Rep. Blake Oshiro (D, Aiea-Halawa).

The bill also failed to win the approval of the Tax Foundation. Executive Director Lowell Kalapa said the bill was "absurd."

"It is throwing pennies before swine. They are taking a chunk of money for rail and then they are giving back pennies. It is absurd," Kalapa said.