Leaders split on rail-line tax hike

By Mike Leidemann
Advertiser Transportation Writer

Raising the state excise tax to pay for a rail transit line for Honolulu will be an uphill battle at the state Legislature this year, but lawmakers and other officials say the idea won't be dead on arrival.

LINGLE

What's more, the proposal comes at the worst possible time for most politicians — an election year.

Even so, lawmakers said last week that the tax increase will be given several hearings and draw spirited debate during the upcoming session, which starts Jan. 21.

"The general position of the House is not to increase any taxes, but I'm open to the arguments and willing to listen to both sides," said House Transportation Chairman Joe Souki, D-8th (Wailuku, Waiehu).

Senate Transportation Chairman Cal Kawamoto said he would introduce a bill that would raise the 4.16 percent excise tax to 4.5 percent in all counties. That increase is necessary to pay the local share of what's expected to be a $2.6 billion price tag on a proposed rail line running along the highly congested traffic corridor from Kapolei to Iwilei, he said.

Guaranteeing a local source of money is considered key to winning federal approval and federal matching money for the rail line, but officials last week differed on how urgently the Legislature needs to act on a project in which construction won't even get under way until 2010. Kawamoto said action is needed within a matter of months if the state is to get its project included under the new long-term transportation financing bill being considered by Congress. Others, however, said they prefer that Honolulu take its time and get the project carefully defined before starting down a dead-end road, as has happened at least twice before, most recently in 1992.

"People realize that we need transit, and they know that if we don't act now, we can forget about getting anything built for the next 15 or 20 years," said Kawamoto, D-18th (Waipahu, Crestview, Pearl City).

Souki, however, said the state should not rush into a decision.

"Right now, we need a good sense of whether the community wants it and if they are willing to pay for it," he said. "I don't think we've reached that point. I think there's a lot more work to do before we raise any taxes."

Payback time

Kawamoto's proposal would ask taxpayers across the state to pay for the Honolulu project. He argues that the entire state will benefit from the construction and associated development and, besides, O'ahu taxpayers have long subsidized highway projects on other islands and it's now time for them to pay back the favor.

Lingle favors a proposal in which the Legislature gives county officials the option of increasing the excise tax locally.

"I certainly don't believe the Neighbor Islands should be paying for a transit system here in Honolulu," Lingle said. "They have their own transportation issues as well as other issues that they may feel are even more important. Or they may not want to impose a tax. It should be an option that the counties have."

Last year, in an effort to balance the state budget, the Senate approved an increase in the general excise tax to 4.5 percent to raise money for education programs. The proposal died after House members refused to even consider raising the tax.

"My personal feeling is that if there's going to be any tax increase, it should go for education," Souki said.

Traffic tax unlikely

Sen. Fred Hemmings, R-25th (Kailua, Waimanalo, Portlock) said the state should step out of the transit financing process altogether.

"If the county wants a traffic solution, it's already got a means to fund it," he said. "The money is already there, it's just a question of priorities. If they want to raise taxes, they can raise property taxes instead of trying to hide behind an excise tax."

Others, however, said leaving the decision up to county lawmakers will at best delay a decision and, at worst, jeopardize any action at all.

"It's almost guaranteed: A traffic tax is doomed to failure," said former City Councilman Jon Yoshimura. "The 1992 debacle was real evidence of a lack of support for any tax increase. Have things changed?ÊIf anything, I sense that there is even less support for a tax increase today."

Lowell Kalapa, head of the Tax Foundation of Hawai'i thinks a tax increase is unlikely this year for one simple reason: Many of the state lawmakers are up for re-election.

"It's going to be very difficult to get it through the Legislature this year, let alone through the County Council," he said. "We're just beginning to see an economic turnaround, and businesses are still struggling. It's very difficult to raise taxes in that kind of situation."

Interim solution suggested

Although a task force of state and county transportation officials assembled by Lingle agreed last year that an above-grade rail line is the best mass transit option, others still believe there are other ways to go.

Yoshimura said the county's emphasis on mass transit should be continued implementation of a bus rapid transit system, not light rail.

"We don't have a culture of mass transit users, and we've got a type society that does not welcome big change. If we ever want to get to any kind of rail, we have to do it in small steps. BRT, even with its flaws, makes a good interim solution," he said.

Senate Judiciary Committee Chairwoman Colleen Hanabusa, D-21st (Nanakuli, Makaha) said the state should step back from a transit plan that links West O'ahu to Iwilei and instead develop one that encourages Kapolei's growth as a true second city.

"If we are going to do it, do it right," she said. "Instead of trying to link Kapolei to Honolulu, let's develop lines from Kapolei to Kunia and Wai'anae. It doesn't make sense to try to retrofit a transit line to a system that keeps pushing people toward Honolulu. I think we can wait a couple more years to get it right."

Sen. Willie Espero, D-20th ('Ewa Beach, Waipahu) said, however, that the thousands of residents who face long commutes from West O'ahu can't wait for new planning solutions that will take years to implement.

"We've been waiting 25 years already," he said. "At some point we've just got to bite the bullet. It's something we've got to deal with right now."

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