Mayor Caldwell introduces bill authorizing city to extend GET surcharge to pay for rail construction

Bill introduced in anticipation of legislature granting authority to extend county’s half-percent surcharge beyond 2027

News Release from City and County of Honolulu, April 20, 2017

Honolulu — Mayor Kirk Caldwell has introduced a bill to the City Council in anticipation of the Hawai‘i state Legislature passing legislation that grants authority to the City and County of Honolulu to extend its half-percent General Excise Tax rail surcharge beyond its current expiration date of December 31, 2027 (http://bit.ly/2ovJ98m).

The mayor continues to request that the legislature extend the surcharge through 2037 at a minimum, which would provide the Honolulu Authority for Rapid Transportation (HART) sufficient funding to complete the rail project all the way to the Ala Moana Center as planned, including finance charges.

“No politician wants to support an additional tax, but the reality is that providing Honolulu the authority to extend the GET surcharge through 2037 is critical to completing the rail line,” said Mayor Caldwell. “All other options, such as ending the line short of the Ala Moana Center and drastically reducing ridership, increasing property taxes, or making drastic cuts to valuable public services would have a negative impact on O‘ahu residents for years to come. Failure to extend the surcharge through 2037 would lead to a double burden for O‘ahu residents, who would continue paying the GET surcharge for at least another decade, while facing an immediate increase in property taxes and cuts to services. It's also likely the city's excellent bond rating would be lowered, resulting in higher borrowing costs to taxpayers.”

Some state legislators have called on Hawai‘i’s capital city to have “skin in the game” while the legislature is voting to give Honolulu the authority to extend the surcharge. That is why on April 11 Mayor Caldwell introduced Bill 42 to lift a cap on using the city’s operating funds for construction of the rail project. This legislation also needs to be passed before the city can even entertain providing the supplementary funding to HART as requested by the legislature.

Mayor Caldwell has introduced these two bills in the hope they will be scheduled for first reading before the City Council at their Wednesday, April 26 meeting. The U.S. Federal Transit Administration has set an April 30 deadline for HART to submit a recovery plan for the cash-strapped rail project. It is important that these bills receive a first reading by the City Council before the FTA deadline so they can be included in HART’s recovery plan, giving it added strength and providing evidence that the city is committed to completing the rail project all the way to Ala Moana Center.

The mayor has also introduced several revenue generating bills to help the city balance its budget and begin the process of providing additional revenue to cover the operation and maintenance of a combined bus-rail system. If approved by the City Council these revenue raising measures would go into the city’s highway fund, which currently helps cover operation of TheBus and Handi-Van, and will cover operation of a combined system in the future. The measures include a vehicle weight tax, a parking fee increase in Waikīkī and downtown, and an incremental increase to TheBus and Handi-Van fares.

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