Lingle should relent
on rail tax compromise


Governor Lingle has threatened to veto a bill that would allow a tax increase to fund rail transit on Oahu.

GOVERNOR Lingle has until Tuesday to decide whether to veto a bill that would give counties the power to trigger general excise tax increases to finance public transportation, including a vital rail transit system for Oahu. Lingle has threatened a veto and has rejected a compromise proposal, at the risk of leaving an unfortunate legacy for her administration: her way or the gridlocked highway.

The bill passed by this year's Legislature would allow counties to tack on a 0.5 percent increase to the state's 4 percent general excise tax. The governor opposes a provision that would allow the state to divert 10 percent of the revenues to its general fund, presumably to pay for tax collection expenses but, she warns, possibly "to pay for nontransit-related projects." Instead, she wants the counties to collect the tax.

She has a good point, and Mayor Hannemann has proposed that the amount to be spent on the cost of collection go directly to the state Tax Department. That would prevent misuse of the funds for nontransit programs. Lingle, the former mayor of Maui, appears to have rejected his compromise "because it has always been an issue of home rule to me."

That position has taken her understandable territorial leanings to an illogical extreme. The state already has the system in place for collecting general excise taxes, while counties would be forced to create new bureaucracies to handle the chore. The result would be a county collection cost many times that of the state -- coming from the same taxpayers' pockets.

Hannemann has estimated the initial computer-related expenses at $12 million for the city and administrative costs of as much as $30 million over the first four years. Lingle's tax collector figures startup costs of $3.6 million and annual costs of $2.5 million.

The governor's refusal to budge has triggered concern. The Chamber of Commerce of Hawaii, a normally conservative business group, is opposing a veto. "This is a quality of life issue and if we miss this opportunity Hawaii will face even worse traffic challenges," Jim Tollefson, the chamber's president, told members in a newsletter last week.

Democratic Rep. Neil Abercrombie was more bombastic. "Every time somebody gets stuck in traffic, if she vetoes this bill, people are going to say, 'Well, I'm in a Lingle lane,'" he steamed at a City Hall rally.

Lingle said she is "avoiding politicizing this issue," but she has received pressure from her party's most conservative element to block any tax increase for whatever purpose. She should resist that pressure, honor widespread public support of rail transit and support Hannemann's proposal, which legislators appear ready to accept.

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