by Andrew Walden
In 2011, DoTax shortfalls -- which suddenly disappeared after the legislative session -- helped Abercrombie push through tax increases by creating a false sense of economic crisis. (See article: Now That Legislature is Adjourned, Abercrombie finds $134M, Credits better accounting)
Flash forward to 2013: Is DoTax now shortchanging HART during the 2013 legislative session in order to make State revenues appear higher in order to help Abercrombie push through spending increases by creating a false sense of prosperity? Obviously the illusion of greater revenues would be helpful in Abercrombie’s effort to create a state-funded ‘Early Education’ voucher system.
Just as in 2011, we will find out as soon as the legislature adjourns. The following letter was sent by HART CEO Daniel Grabauskas to DoTax Director Frederick Pablo April 1, 2013 (underlining added):
Dear Mr. Pablo:
Subject: General Excise Tax County Surcharge
The General Excise Tax (GET) county surcharge authorized by State law and County ordinance is the largest single funding source for the Honolulu Rail Transit Project (HRTP); however, after several years of County surcharge collections and payments, there does not appear to be a discernable relationship between overall Statewide GET collections and the County surcharge amounts transferred to the City and County of Honolulu for the HRTP, particularly in recent calendar quarters. It is critical for the Honolulu Authority for Rapid Transportation (HART) to better understand how this source of revenue is assessed, collected, and transferred in order to more accurately, reasonably, and responsibly estimate future revenue/receipts to base and monitor our program's financial plan. As such, HART will be better equipped to provide the kind of transparency necessary for a project of this magnitude and complexity.
As such, I am writing to request information that would help us understand the quarterly fluctuations that we have experienced since the inception of the GET surcharge. The information we are requesting is from the Oahu District, which accounts for over 98% of the GET surcharge revenue. My questions and requests for information are:
- The monthly revenue base on which the 0.5% GET surcharge tax is collected for Oahu District from calendar year 2007 to date.
- The monthly revenue base on which the 4% GET tax is collected for Oahu District from calendar year 2007 to date.
- A comparison of the monthly 4% GET revenue base and the 0.5% GET surcharge revenue base and information on what would account for the differences between the two revenue bases.
- Examples of taxpayers that illustrate the differences in the above-mentioned revenue tax bases.
- Are the quarterly amounts transferred to the City based on the GET surcharge tax liability reported by taxpayers or based on the amounts collected?
- If the amounts transferred to the City are based on collections and not on the tax liability, when is the difference transferred to the City? What is the process to reconcile the tax liability to the tax collections and how is it reflected in the monthly amounts transferred to the City?
- Reconciliation of the Oahu District tax liability to cash transferred from GET surcharge inception to-date.
- Have the surcharge receipts to the City been audited by a third party since inception in 2007?
- Information on the process for reporting the 4% GET and 0.5% GET surcharge amounts collected each month. Specifically, we would like to confirm that the monthly 4% GET collections and the 0.5% GET surcharge collections are based on the same tax information sources each month.
- Information on any review process that analyzes whether the difference in the monthly 4% GET revenue base and the 0.5% revenue base is reasonable.
- Information as to whether there is a review and audit of taxpayers who show a difference in the 4% GET revenue base versus the 0.5% GET surcharge revenue.
I look forward to discussing this request and working with your staff to better understand this major source of revenue to HART at your earliest convenience.
Daniel A. Grabauskas
Executive Director and CEO, HART
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Memories from Massachusetts: Grabauskas - Aloisi Catfight
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