Lingle warns of
transit tax veto

Lawmakers are urged to schedule
a rewrite to ward off the threat

In an effort to get the Legislature to amend the transit tax bill, Gov. Linda Lingle says she will announce Monday that she intends to veto it.

However, the governor said yesterday, if lawmakers publicly agree to work on her suggestions, she will reconsider the threatened veto.

"I am trying to get a commitment ... before the tax goes into effect," Lingle said.

According to the state Constitution, Lingle has until Monday to formally tell the Legislature which bills she intends to veto. The actual vetoes must be sent to the Legislature by July 12, at which time the Legislature may meet to override the vetoes.

Yesterday Lingle said the transit tax bill, HB 1309, "will be on the list" Monday.

The tax bill, which allows the counties to raise the general excise tax to 4.5 percent from 4 percent, would be used by Honolulu to pay for a mass transit project.

Lawmakers have the option of meeting this summer to amend the bill to address Lingle's objections, but the governor said they also could do it next year in their regular session.

"They would not have to come back (in a special session). They would have to make a public commitment that they would do it, because it doesn't go into effect until '07," Lingle said.

"If there is no commitment, then I will have to look at it a lot closer than if they were willing to make those changes," Lingle added.

The governor would not say, however, if she would follow through on her veto threat and reject the bill if the Legislature does not agree to amend it.

If Lingle does veto the tax increase, which gives the counties the authority to raise the excise tax by 12.5 percent, the future of the bill and the proposed Oahu mass transit plan are in doubt.

Lawmakers say the state House might not have the votes to override a Lingle veto.

The measure passed the House last month with 19 no votes. If those legislators continued to reject the bill, supporters would not have the two-thirds majority needed to override a veto.

"It might be awfully difficult," said House Speaker Calvin Say.

"I really don't know if we can get the votes. I just hope she will pass it," added Say (D, St. Louis Heights-Wilhelmina Rise).

Say declined to speculate if Democrats in the Legislature would agree to Lingle's conditions.

"I don't know what is going to happen, but I would be open to some of the proposals she may have," he said.

House Democrats will meet next week to discuss it.

Lingle said she wanted the bill changed so "that they will make it not only a county option, but that the county will implement, the county will collect and the county will assess -- so the state won't have any involvement."

Lingle does not like the stipulation that 10 percent of the funds collected by the new tax be given to the state to pay for collecting the tax and sending it to the counties. She said the counties should be responsible for collecting the tax and spending the money.

Senate President Robert Bunda expressed some concern about Lingle's objections but said, "I agree that certain corrections are in order."

"The crux of the matter is a change in the bill that would allow the counties to administer and collect the tax themselves, thus allowing the counties to keep 100 percent of the tax increase, less the cost of collection," said Bunda (D, Kaena-Wahiawa-Pupukea).

"We will address the governor's concerns and her specific requests when she presents them to the Legislature next week," Bunda said.

The general excise tax is charged on every exchange of money, so it is applied whenever goods or services change hands, including at the wholesale level.