Racetrack tax credit a problematic idea from the starting line

THE ISSUE A bill to grant state tax credits for a new motor sports facility has been shelved.

WHEN the wheels came off a $50 million tax credit bill for a new racetrack complex, the reason wasn't that lawmakers in their collective wisdom saw no merit in backing the project.

Instead, the measure was killed because property partly owned by state Rep. Jerry Chang had been included in a land swap proposal for the track's site, which would look bad for him and his colleagues.

Whatever the cause of its demise, the tax credit bill was not a good idea to begin with.

The credit had long been sought by Mike Oakland, president of Hawaii Motorsports Center, who operated Hawaii Raceway Park before it closed earlier this month when its lease expired.

The dubious claims for the credit were that a modern racetrack would add to Hawaii's economy by staging national and international events and would give local enthusiasts, who would otherwise use highways to quench their need for speed, a place to race safely.

Oakland said he needed the tax credit, which the state Department of Taxation opposed, to pull in investors, but if a venture is financially attractive, it would not need the state's support.

Oakland's plan was to buy land in Kunia and trade it for acreage in Kalaeloa, owned by the Department of Hawaiian Home Lands. But the department wasn't interested in the Kunia parcel.

Here's where Chang, an advocate for the tax credit bill, came in. He offered to sell to Oakland land in Hilo that he partly owns to trade to the department.

This put him in a potential conflict of interest, and when his colleagues learned of the offer, House leaders shelved the bill.

The tax credit had drawn opposition from dirt-track enthusiasts after they could not win Oakland's assurance that the new complex would include facilities for their sport. This, along with the concern that the state would not get good returns from the credit, should have been enough for lawmakers to set aside the bill. However, it was the appearance of unethical behavior that tripped the wire.

All's well that ends well.