Rail Funding Bill Continues to Advance

August 31, 2017, 8:29 AM HST · Updated August 31, 8:35 AM
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The state House committees on Transportation and Finance on Wednesday passed a rail funding bill that continues to advance during a special legislative session.

Background images courtesy: http://www.honolulutransit.org/ ; Maui Now graphic.

The Transportation committee voted 4 to 2 in favor of the bill; and the Finance Committee voted 8 to 6 in favor of SB4, with Maui Rep. Kyle Yamashita voting in favor of it, and fellow Maui Rep. Lynn DeCoite casting a no vote against the measure.

The bill contains two funding mechanisms: a three-year extension of the 0.5 % GET surcharge on Oʻahu and a 13-year 1% increase in the TAT statewide. Supporters of the bill say it ensures that the City’s rail project will be sufficiently funded and reaches Ala Moana.

The bill now moves to the full House for a vote on second reading today.

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Meantime, members of the Hawai‘i State Senate on Wednesday also passed Senate Bill 4 on third reading by a vote of 16-9.

SB4 addresses the City and County of Honolulu’s rail construction shortfall of $2.378 billion by extending the General Excise Tax on Oʻahu for three additional years through Dec. 31, 2030 which will provide $1.046 billion.

It also raises the Transient Accommodation Tax or TAT by 1% to 10.25% for 13 years, to Dec. 31, 2030. This will provide $1.326 billion.  SB4 permanently increases the counties’ share of the TAT from $93 million to $103 million.

Supporters say the measure reduces the State Department of Taxation’s administrative fee on the GET surcharge from 10% to 1%. The measure also creates a Mass Transit Special Fund to review and disburse funds to the city for its costs on the rail project, and requires a state run audit of the rail project and annual financial reviews.

Those opposed to the bill have included some Maui groups who say the neighbor islands should not have to contribute to the Oʻahu project.

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