Same plan, different result as politicians regain their senses

THE ISSUE A state-city spat about transit tax collection might be at an end.

THE latest proposal to pay start-up costs of excise tax collections for the city's transit project appears little different from one Mayor Hannemann suggested earlier this month, but after weeks of petty bickering, officials have come to their senses.

The dispute, fomented by the sloppy work of state lawmakers, might be close to resolution, much to the relief of disgusted taxpayers. Too bad the exasperating episode that involved Hannemann, Governor Lingle and the City Council could not have been avoided in the first place.

The conflict began after the state Legislature gave the city the power to add a 0.5 percent surcharge to the state's 4 percent excise tax in Honolulu. The governor didn't like the tax increase and wanted to keep off her imprint. However, she allowed the bill to become law without her signature after extracting from legislators a promise that they would consider adjusting it so that the city would do the collecting.

Lawmakers say they did consider the issue, but they didn't change the law. Then, compounding the problem, they also didn't appropriate money for the state to do the collecting. Their pretext for failure was that the governor should have requested the funding, but didn't.

Lingle and her Tax Department said they couldn't do the work without the money. Hannemann went to the Council, asking for approval of $5 million to guarantee that the a contractor could prepare the state's tax computers so collection could begin by Jan. 1, when the surcharge is set to kick in. Without assurances that the state would repay the city, the Council said no.

In between all of this, the mayor and governor exchanged barbs, each belittling the other. While Hannemann was away on a transit tour, Lingle approached the Council herself, sending her aides to negotiate with members, some of whom had had quarrels with the mayor.

Now everyone is making nice, apparently realizing that taxpayers were sick of the silliness. The Council is poised to approve a plan to ensure that the contractor will be paid; the governor, who initially balked, appears to have accepted that the law requires the state to do the collecting; the mayor has backed off his threat to sue the state; and legislators are promising to approve funding, which they'd better fulfill.

Taxpayers hope the agreement will end the foolishness, but they should stay tuned.