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The Honolulu Advertiser
Posted on: Monday, June 12, 2006

Transit tax squabble dangerous, not needed

It's time for Mayor Mufi Hannemann and Gov. Linda Lingle to get out of the sandbox and stop their squabbling over the looming transit tax.

If they keep up the blame game over collections, there is a danger Washington could pull back on its commitment to the project because Hawai'i cannot agree on how to put together its local financing share. That could drive a stake through the heart of any hope for a new transit solution for Honolulu.

Clearly, it makes sense for the state to collect the tax. It already has in place an excise tax collection system that should be able to adjust to the additional levy. In fact, the state already collects taxes for the counties (hotel tax, etc.) while the counties collect taxes for the state (motor vehicle taxes). So this is ridiculous.

While most people associate the tax (an additional half a percentage point on the existing 4 percent general excise tax) with rail transit, it in fact opens the door to a variety of transit options. A key point is that federal support for a local transit alternative depends on guaranteed local funding.

At issue is who should shoulder the costs of collecting and distributing this additional tax. Lingle said it is the county's responsibility to come up with the $5 million the state says is needed to set up this new collection system.

Thus far, the council has balked at fronting the money.

Hannemann says the law clearly imposes the responsibility for collection on the state. While it would be nice if Honolulu helped with the tab, that is not a requirement of the law, he says.

It would be foolish and simply not cost effective for the City and County to set up a separate collection system. It's time to get past the turf battles and political sniping and get on with the work of developing transportation alternatives for urbanized and congested O'ahu, which — after all — represents 80 percent of the state's population.