Agreement needed quickly to make rail on time

THE ISSUE Governor Lingle said the state will not be able to meet a Jan. 1 deadline for collecting taxes for rail transit.

BUNGLING by the Legislature of a proposal to pay for the state's collection of a 0.5 percent excise tax for the city's rail transit system has led to an ugly confrontation between Governor Lingle and Mayor Hannemann. If they cannot come to agreement quickly, the Legislature should reconvene in a special session to end the squabble.

Lingle has long favored the city collecting the tax, but that would involve creating a new bureaucracy. It makes more sense for the state to merely add the tax to the 4 percent general excise tax it already collects.

Kurt Kawafuchi, the state tax director, estimated that the state's cost in collecting $150 million would be $13.6 million over the first four years, with the state receiving 10 percent of the proceeds for administrative costs. Hannemann figured it would cost the city $52 million over the same period.

Kawafuchi complained that the work would create "hardship and burnout" for his department's employees. The Legislature responded by including $5 million in startup costs in an appropriations bill for the state but then neglected to pass it because of concerns about another tax measure in the same bill.

The tax is scheduled to take effect Jan. 1, but Kawafuchi said he doesn't know if that is possible because of his limited staff. Lingle said flatly, "We can't collect it. The Legislature didn't appropriate it, and we can't spend money that hasn't been appropriated."

Hannemann insists that the state is legally bound to collect the tax and suggests that the city could take the state to court to force it to do so. Lingle responded that the mayor "probably lost his head for a minute when he said that."

The discord between the Republican governor and Democratic mayor crosses party lines. City Councilman Charles Djou, a Republican, said he is "very upset at this point that the city government constantly has to fix the state's mess."

Lingle's explanation for the state's inability to begin collecting the tax by Jan. 1 seems reasonable, but it is clouded by her long opposition to the state collecting it at all. She said she will not call the Legislature into a special session, although she would consider such a request by legislative leaders.

Meeting the deadline is important. Toru Hamayasu, the city's chief transportation planner, told the City Council that the disagreement could cause problems in the city receiving federal funds that are crucial to building the transit system. Cool heads should find a way to fix this mammoth pothole.