Tuesday, October 4, 2022
Hawai'i Free Press

Current Articles | Archives

Sunday, November 11, 2018
Oh? Can’t We Keep HART’s Funding Sources “Pure”?
By Tom Yamachika @ 4:00 AM :: 4345 Views :: Rail, Taxes

Oh? Can’t We Keep HART’s Funding Sources “Pure”?

by Tom Yamachika, President, Tax Foundation Hawaii

Recently, there has been fierce debate over Bill 42 before the Honolulu City Council. Here’s the background: In 2007, the City passed Ordinance 07-001, which says that the Honolulu rail project would be funded only with proceeds of the general excise tax surcharge and federal money. “We’ll never touch the real property tax to build rail,” the politicians said at the time. Bill 42 basically repeals 07-001 to open up other funding sources, like real property tax.

For a long time, I was wondering what the authors of 07-001 were smoking.

For a little while since 2007, the rail project seemed to be on track. Mr. Mayor was out telling all of us that the project will be built on time and on budget.

But then, a little later when the project was being planned and costed out, Mr. Mayor started becoming a frequent visitor to the Legislature. With hat in hand. “We need just a small kine extension of the surcharge,” he said. “A permanent extension would be nice.”

This, of course, started to drive the Legislature nuts. Several legislators wondered out loud why they needed to stick their necks out to extend or increase taxes to bail out the City from its projected cost overruns when the City could just hide behind 07-001 and say to voters, “But WE protected your property taxes.”

As time went on, more and further bailouts were needed. Not only was the GET surcharge extended multiple times, but 2017 legislation added an additional percentage point to the transient accommodations tax to build rail. Some of the bill drafts contained language that would require the City to repeal 07-001 if they wanted a state bailout, but that language didn’t pass. At the same time, the State reduced its skim off the surcharge proceeds from 10% to 1%, freeing up millions more for rail.

Then, the debate turned to whether real property tax, thus protected, was too low. HSTA and others started arguing that low property taxes exposed the soft underbelly of our real estate market to nasty, rotten, foreign speculators. The solution? Enact a surcharge on property taxes to increase funds for education. That conversation, which started in the 2017 session, rose to prominence in the 2018 session, and then dominated the public’s attention while a proposed constitutional amendment to do that was on the ballot. Mercifully, that amendment was dealt a death blow by the Hawaii Supreme Court.

Amid all that, the Federal Highway Administration, which was supposed to be contributing $1.5 billion to the effort, grew increasingly dissatisfied with the City’s skin in the game and threatened to crater the project unless more money was immediately made available to it. 07-001 was in the way. It needed to go. In effect, the Feds were saying that they were not going to dance the same way that the State did; the City needed to show its commitment. Hence, Bill 42 was necessary.

Was Bill 42 a manifestation of promises made and betrayed? I think of it more as a realization that 07-001 represented a promise that was unrealistic from the beginning. If the City wanted to build this project, it needed to be committed; if it weren’t, reality would catch up with it eventually. And by committed I don’t mean the commitment that the chicken makes to give you your bacon and eggs breakfast; I am talking about the commitment that the pig makes. More and further bailouts, by the State, the Feds, or the electorate, won’t happen without consequences. Our City officials need the resolve to make this project work within its means if they hope to avoid those consequences.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Life Alliance

Hawaii March for Life 

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT