Lingle shaky on
tax hike for rail

Mayor Hannemann is
confident that the governor's
remaining concerns will be met

Gov. Linda Lingle said she has questions about a bill to increase the general excise tax to fund county transportation projects -- potentially including rail transit for Oahu.

"I probably will take my full time until July 12 to make a final decision about the excise tax authorization bill," Lingle said yesterday after emerging from a meeting with Mayor Mufi Hannemann and about a dozen other state, city and federal officials.

They discussed House Bill 1309, a Legislature-passed measure that authorizes the counties to increase the general excise tax by half of a percentage point, to 4.5 percent, to fund transportation projects on the neighbor islands and a possible rail transit line on Oahu.

Lingle must notify the Legislature by June 27 of which bills she plans to veto. She then has until July 12 to actually veto bills.

"I know questions were expressed, but my feeling is I think the concerns can be assuaged and be dealt with through conversations, through discussions and minor tweaking, if that needs to be done," Hannemann said. "I still remain very confident we will have something."

Lingle said one of the concerns she has about the bill is the provision that allows the state to take 10 percent of the amount collected for administering the tax.

"There are a number of issues involved with the bill that were not the way I would've drafted it, and I need time to talk to members of both the House and Senate about whether or not these are issues that could be addressed next year," Lingle said.

To soften the blow from an excise tax increase, Lingle said she plans tax relief proposals, including a tax credit on food and medical services, for next session.

"If we're able to get that achieved at the same time this option went into effect, people might take a broader view of it," Lingle said.

If Lingle approves the bill, the City Council must vote to approve the tax hike by the end of the year. The tax hike will not go into effect until January 2007, two months after the 2006 elections.

The Council, however, has already begun the process for the tax hike and is scheduled to take a second vote on Bill 40 on Monday, with a final vote scheduled at its July 6 meeting.

But support on the Council for the tax hike could be eroding.

Councilman Rod Tam, who has supported the measure so far, is offering an amendment that would not impose the tax hike on Jan. 1, 2007, unless three conditions are met: The operational, financial, developmental and route plan for a proposed transit system must be completed; the Council must vote to approve such a system; and a commitment of federal funding must be made.

"People have been asking for this publicly," Tam said. "I want to make sure that people's concerns are embraced."

Tam said if the bill does not address those concerns when it comes up for a final vote, "there's a strong possibility I will vote against the bill, because it's not very clear that those things will be embraced. If it's not on paper, then it's always questionable whether the issue will be fully addressed."

Council Transportation Chairman Nestor Garcia said he does not support Tam's proposed amendment because he believes all those issues will be addressed.

He said the Council needs to move to approve the tax hike in a timely fashion because the city needs to designate a local funding mechanism to qualify for federal funding.

"We are trying to say we are committed," Garcia said.