State told rail system rides on excise tax hike

By Mike Leidemann
Advertiser Transportation Writer

A key state senator yesterday said he would push for a statewide excise tax increase, after a warning that Hawai'i needs to approve local money for a proposed rail transit system soon, or risk waiting years for another shot at federal money.

Senate Transportation Chairman Cal Kawamoto said he planned to introduce a bill that would raise the 4 percent excise tax to 4.5 percent in all counties. That would raise an additional $1.5 billion over 10 years to pay for the local share of the proposed rail system from Kapolei to Iwilei, he said.

"I thought we had more time, but after what I heard today, we can't wait at all," Kawamoto said. "If we don't get this done right away, forget about it."

U.S. Rep. Earl Blumenauer, D-Ore., a leading advocate of transit financing in Congress, told some 40 transportation officials and business leaders in Honolulu yesterday that the state needed to have its local fund-raising plan in place before Congress acts on a new long-term transportation financing measure.

Action on Capitol Hill could come as early as the end of February, he said. If Hawai'i misses that deadline, it might have to wait as long as a decade for another chance at federal mass transit money.

"The sooner the stars align, the better. There's more competition every month for transit funds," said Blumenauer, who is widely credited for helping to develop a light-rail system in Portland, Ore., that could be used as a model in Hawai'i. "It's never going to get easier. People say there's some risk of you getting shut out for the next 10 years, and there's some truth in that."

U.S. Rep. Neil Abercrombie, D-Hawai'i, who attended yesterday's forum, said the state has been authorized twice before to receive hundreds of millions of federal dollars for transit projects, only to back out at the last minute, so there is no point in moving ahead again before a commitment to local financing is in place.

"I had to turn back that money then," Abercrombie said. "I'm not being bitter, but I'm not going to move one muscle to help again unless you have the plans in place and the funding issue is locked up. Once burned, twice warned."

Last fall, Gov. Linda Lingle announced that state and city officials had reached broad agreement on plans to build a new $2.6 billion rail system that would link Kapolei to Iwilei, generally following a route first proposed in the early 1990s.

In October, Lingle said she would ask the Legislature to give counties the right to increase the excise tax to pay for local transit projects. She later said there was no urgent need to pass the legislation this year because the rail plans would take years to develop. The governor's office did not comment yesterday on Kawamoto's plan.

After yesterday's forum, Kawamoto said the state couldn't wait for counties to act. "Everybody wants to talk about funding, but no one wants to act. If we don't do it at the Legislature in the first three or four weeks, we'll never get (federal) funding in time," he said.

Kawamoto admitted that his tax increase faced an uphill battle in the Legislature, where many members are up for re-election this year, and especially on the Neighbor Islands, where many lawmakers will be reluctant to contribute to a transit system that benefits only O'ahu.

Abercrombie said, however, that the rail plan would benefit the whole state, and Neighbor Island lawmakers should support it.

"Absolutely, this is a state issue. We're all in this together. For too long we've been paddling in different directions, and transit plans just keep going around in circles. It's time for us to put all the paddles in the water at the same time and pull together."

Transportation Department spokesman Scott Ishikawa said DOT would seek $2 million this year to update an old environmental impact statement for the previous rail transit proposal, killed 10 years ago when the City Council, on a 5-4 vote, refused to increase the excise tax on O'ahu to pay the local share of the project.

Reach Mike Leidemann at 525-5460 or mleidemann@honoluluadvertiser.com.