Posted on: Thursday, January 20, 2005

Key issues

By Gordon Pang
Advertiser Staff Writer

A bevy of ideas was trotted out by leaders in both houses during opening day of the Legislature yesterday, from dealing with the state's vexing traffic plans to affordable housing to charter schools.

Here is a short summary of each of the proposals.

Giving individual counties the option of increasing the excise tax to pay for transit projects:

Honolulu City Council Budget Chairwoman Ann Kobayashi said she would favor additional taxing authority as proposed by House Democrats.

"We all know there is a traffic problem and something has to be done," she said. "We just have to bite the bullet. If we have to raise taxes 1 percent, so be it. If not, we're going to be gridlocked."

This suggestion last made it through the Legislature in the early 1990s. But the plan to use such a tax increase to pay for a $1 billion transit plan on O'ahu was derailed when the Honolulu City Council rejected it in 1992.

The state imposes a 4 percent excise tax on all business activities, including retail sales, commissions, rental income, and services. The state collects just under $2 billion annually in excise taxes, which amounts to about half of its total general fund budget.

Kaua'i Mayor Bryan Baptiste said he was open to the idea of additional taxing authority for the counties to deal with transportation issues. Baptiste stressed, however, that he wouldn't want to gain that option if it meant losing another source of money. Two years ago, lawmakers toyed with the idea of giving excise tax authority to the counties in exchange for their cut of hotel room tax revenues, for example.

House Transportation Chairman Joe Souki, D-8th (Wailuku, Waiehu), said that a 1 percent addition to the existing 4 percent excise tax would bring in about $375 million annually, with the Honolulu share about 80 percent.

Lowell Kalapa, president of the nonprofit Tax Foundation of Hawai'i, said the county tax plan was "dead on arrival" because he does not believe that lawmakers will have the political will to approve it.

Another traffic proposal, put forth by Senate leaders, was to create a statewide transit authority that would oversee the development, financing, construction and operation of mass-transit systems on each island.

But Kalapa called the creation of a new transit authority "a punt" of legislative duties by lawmakers.

And some lawmakers said it would unnecessarily duplicate work of existing agencies.

A review of how state land can be made available to develop affordable housing:

"We need to look closer at how we make lands for home construction available, even as we provide safeguards to protect the natural beauty of these islands," Senate President Robert Bunda, D-22nd (North Shore, Wahiawa), said. He called for review of the functions of the state Land Use Commission. "I think it's time for a major and comprehensive review, to look for better ways to provide housing for our people while protecting the 'aina."

Additional charter school funding and the creation of more charter schools:

House Education Chairman Roy Takumi, D-36th (Pearl City, Palisades), said House Democrats want to look at more funding for charter schools and begin studying the prospect of a universal preschool. Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Portlock), said Republicans want lawmakers to authorize the creation of more charter schools. "Evidence is overwhelming," he said, that charter schools have been a success locally.