Posted on: Tuesday, June 7, 2005

Bill to raise excise tax on hold

By Rod Ohira and Mike Leidemann
Advertiser Staff Writers

The City Council yesterday postponed for a month the second of three required votes on a bill that would increase the general excise tax to pay for transit improvements in Honolulu.

The council voted 8-1 yesterday to delay the second-reading vote on Bill 40 to July 6. If the bill passes second reading then, it goes back to the joint Budget/Planning and Transportation Committee before being voted again by the council in a final vote in August.

The bill proposes a general excise tax increase to 4.5 percent from 4 percent.

Also yesterday, city administration officials said the start of curbside recycling could be delayed three to nine months by legal challenges to the city's bidding process.

The rail tax vote was postponed after council members expressed concerns about putting a financial plan for mass transit in place before a preferred transit option is identified. Another issue is whether Honolulu will qualify for federal funding.

Federal officials have said that a local financing plan, such as a tax increase, for transit must be in place before the city becomes eligible for federal money. The state bill authorizing local officials to raise the excise tax for transit mandates that such action be taken before Dec. 31.

Councilwoman Ann Kobayashi does not see the delay as a problem. "I don't see any wavering," she said. "Once it passes second reading, I think the votes will be solid. I think we could have passed it (yesterday)."

Councilman Gary Okino said the reason given for the delay was to allow time to receive more input.

As for curbside recycling, council members told officials to pursue other recycling programs, involving schools or nonprofit groups, while the contract problems are worked out.

That requirement could delay the start of curbside recycling even further, said Eric Takamura, the city's director of environmental services.

"It's going to have an effect, that's for sure," Takamura said.

Takamura said at least two bidders have filed protests over the process in which Rolloffs Hawai'i BLT was the apparent low bidder for a five-year contract to provide the residential curbside pickup of cans, bottles and newspapers.

City managing director Jeff Coelho said there's no way to determine how long it will take to resolve the dispute, but that the city still hopes to start curbside recycling by the end of summer.

"Mayor (Mufi) Hannemann remains fully committed to curbside recycling," Coelho said.

Council members yesterday told the city to look at alternative recycling programs, including those that encourage schools and nonprofit groups to get involved.

Curbside recycling has been stalled since it was proposed by the previous mayor, Jeremy Harris, by everything from differences between the city and the United Public Workers union to the state's new bottle deposit law.