Council tightens
rail proposal

Three conditions must be met before
tax proceeds can be spent

The latest proposal for funding an Oahu rail transit system poses stricter spending requirements for the money that would be raised for the project through an increase in the general excise tax.

The plan was unveiled yesterday by City Council Chairman Donovan Dela Cruz and Councilman Nestor Garcia, Planning and Transportation Committee chairman.

It has the support of Mayor Mufi Hannemann, who said the show of unity for the plan should send "a very positive message" to Gov. Linda Lingle, who still must sign the bill granting counties the authority to impose the tax surcharge.

"It's a strong showing that we want to do something about our traffic congestion," Hannemann said.

The new proposal for Bill 40 is being placed on the agenda for July 6, when members are set to take the second of three required votes on the issue of raising the general excise tax by a half-percentage point, to 4.5 percent, to support a rail transit system.

The last proposal, debated by the Council June 6, would have allowed the tax to be levied on Jan. 1, 2007, but give the City Council the power to reconsider the move if three conditions are not 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.

The latest proposal still allows the tax to be levied as scheduled but states that all three conditions must be met before any money collected under the new tax can be spent.

Also, money collected under the new tax would be placed in a newly created special fund dedicated to the rail project.

"This makes it clear that the dollars will be spent on the transit process and the transit system only," the mayor said. "We will not divert funds from this and use it in other parts of the general fund.

"I really believe this is a significant step forward. It allays the fears and suspicions by some in the community."