Council resolute on tax increase

By Robbie Dingeman and Derrick DePledge
Advertiser Staff Writers

The Honolulu City Council still seems poised to support a tax increase for mass transit despite Gov. Linda Lingle's threat to veto a bill that would allow Honolulu to charge the tax.

Djou

Lingle has asked state lawmakers for assurances they would remove a provision in the bill for the state to collect the tax, turning over collection authority to Honolulu or the other counties. But Mayor Mufi Hannemann has said it would be too costly for Honolulu to collect the tax, putting the governor and the mayor on opposite ground.

"I don't see any serious erosion of support," said Nestor Garcia, chairman of the council's Transportation Committee.

Donovan Dela Cruz, the council chairman, also said the tax would likely stay on track unless the governor actually vetoes the bill. "I personally don't see anything that's different," he said.

Earlier, the council voted 7 to 2 for a tax increase to help pay for a transit system that might ease O'ahu's growing traffic congestion. The bill before Lingle would give counties the option of adding a 0.5 percent surcharge to the state's 4 percent general excise tax, which would raise about $150 million year.

Councilman Todd Apo, who represents much of the Leeward Coast, where traffic relief is a priority, said a possible clash between Lingle and Hannemann should not derail a plan to find a solution to congestion. "We need to keep those options open," Apo said.

An opponent of the tax, Councilman Charles Djou, said the dispute is yet another flaw. "It does further highlight how incredibly messed up this tax thing is," he said.

But Djou said he believes the council and the mayor will not back away. "They want this tax so badly they'll do whatever needs to get done to get the tax," he said.

Political analysts had said earlier that the transit tax plan seemed to be moving smoothly, considering the political volatility of tax increases. But the maneuvering over the past few days has added new uncertainty to a decision that could shape Honolulu for the next few decades.

Lingle and her advisers had given signs during the session that she would likely sign the bill because it was consistent with a philosophy of "home rule" she has held since her time as Maui County mayor.

State Tax Director Kurt Kawafuchi had consistently told the Legislature that state officials did not want to collect the tax, but it was never portrayed as a possible deal-breaker by the governor until recently.

In mid-April, in a meeting with reporters from around the state, Lingle said she preferred giving counties the option of adding the tax and the choice of how to spend the money. In early May, just after the legislative session ended, the governor said she did not want a new tax to interfere with the state's existing collections but did not mention state collection as a fatal flaw.

Lingle did raise the issue at a private meeting on transit with House, Senate and city leaders before her trip this month to China and South Korea. The governor's chief of staff, Bob Awana, and her senior policy adviser, Linda Smith, then brought up the subject last week in separate discussions with Senate President Robert Bunda, D-22nd (N. Shore, Wahiawa) and House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo, Wilhelmina Rise).

"We seem to have raised it fairly consistently throughout this session," said Smith, adding that Kawafuchi, who had objected all along, is the administration's chief spokesman on tax matters.

Some lawmakers and city staff said yesterday it appeared Lingle was looking for some political cover after growing protests against the tax by Republicans. Republicans gave Lingle a petition against the tax during their convention on Kaua'i in May, and the governor has been criticized on conservative talk radio shows.

"Most Republicans oppose taxes. That's why they're Republicans in the first place," said Sam Aiona, the state's GOP chairman. "I think the governor has done a good job of listening to everyone."

A few Democrats said Hannemann may have put even more pressure on Lingle, who would likely be blamed for blocking a Honolulu rail project if she vetoes the bill. House and Senate leaders have said they have doubts they can muster the two-thirds' votes to override a veto.

State Rep. Brian Schatz, D-25th (Makiki, Tantalus), said he thinks the governor is looking for an excuse and has seized on an issue that was never central to the bill. "The time for negotiation has passed," he said. " ... The question is: Do you want rail or do you not want rail?"

Reach Robbie Dingeman at 535-2429. Reach Derrick DePledge at 525-8070 or ddepledge@honoluluadvertiser.com