Lingle appeals to Council in dispute over excise tax

Mayor Hannemann continues to insist the state is required to collect the transit tax

Gov. Linda Lingle sought help from the City Council yesterday in her dispute with Mayor Mufi Hannemann's administration over collection of the pending 0.5 percent transit tax.

"We are working collaboratively with everyone except the mayor," the governor said.

Lingle met in the afternoon with Council Chairman Donovan Dela Cruz. Later in the day, her senior policy adviser, Linda Smith, met with Councilman Charles Djou. And Council Budget Chairwoman Ann Kobayashi said Lingle's Chief of Staff Bob Awana had left a message for her but they had not yet connected.

Lingle unsuccessfully sought to have the city collect the 0.5 percent general excise tax surcharge for city transit projects. The tax goes into effect Jan. 1 and is expected to bring in $150 million in revenue.

But the state Legislature did not make a change to have the city collect the tax this year. It also failed to approve funding to help finance the state's effort to prepare to collect the tax.

The governor has said that the state can't collect the tax because it doesn't have the funding.

The City Council last week rejected a request from the Hannemann administration for a $5 million guarantee of payment for a private vendor to set up the tax collection computer system.

Last week, the mayor threatened to sue the state if it refuses to collect the tax, and sent a letter to the governor asking for a legal justification why the state can't collect the tax.

"I think the mayor is kind of panicking, because I saw him on TV and he has never called me, he has never spoken to me, he has never called for an appointment to discuss it. But I see him on TV that he wants to sue," Lingle said yesterday. "I guess he is frustrated. I am just not sure why."

City spokesman Bill Brennan replied, "He's neither panicked or frustrated."

Brennan said it now sounds like the governor "is finally admitting" that it will have to be the state and not the city to collect the tax.

Lingle said that while the mayor couldn't convince the Council to approve the guarantee, "we feel we could help them to understand exactly what the issue is."

Reaction was mixed to the governor's move to reach out to the Council.

"It was pleasant. It was very positive," Dela Cruz said of his meeting with the governor. "It's very clear that she supports transit and she communicated that transit is needed and that if we all work together in a collaborative manner then we can achieve this."

The mayor, through Brennan, said, "We welcome her involvement after all these months, but it's got to be the right kind of involvement. First she has to answer our letter."

Brennan said the mayor also pointed out that the Council can only approve appropriations that comes from the administration.

"This is a train wreck and anything that can be done to sort this out and have cooler heads prevail is certainly welcomed," Djou said after his meeting with Smith. "I still don't support the tax increases, but my objective right now is just to make sure whatever we do with this tax increase is done fairly, properly and is done with best management practices which has not been the case thus far."

Kobayashi said she hopes the Council doesn't get caught in the crossfire. "I support the mayor in what he does. He's just following the law that the state collects the tax," she said. "I think if we all follow the law it will all work out."