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The Honolulu Advertiser
Posted on: Monday, February 23, 2009

Rail-tax collections up 26%, to $12.9M

By Sean Hao
Advertiser Staff Writer

Tax collections to pay for Honolulu's planned elevated commuter train rose 26 percent to $12.9 million in January, compared with a year ago, according to state figures.

Despite that gain, collections are still on track to be less than an expected $188 million in tax collections for the current fiscal year ending June 30.

Through January, the half-percentage-point excise tax surcharge raised nearly $109 million, which was slightly larger than the $107 million raised during the first seven months of fiscal 2008.

The state began collecting a half-percentage point general excise tax surcharge for transit in January 2007. Through January 2009, the tax raised about $307 million for the city, according to state Department of Taxation figures.

City officials hope to use the tax to raise nearly $4.1 billion, on an inflation-adjusted basis, between 2007 and 2023 to pay for the 20-mile rail system that will connect East Kapolei to Ala Moana.

That, coupled with about $1.4 billion in anticipated federal funds, is expected to pay the $5.4 billion in capital costs associated with rail, according to the city's financial plan.

Despite the rise in collections in January, transit-tax collections overall remain below projections because of the state's slowing economy.

The city needs to collect an average of about $15.8 million a month for the remaining five months of the fiscal year to reach its $188 million goal. The average monthly take during the first seven months of the fiscal year was about $13.6 million.

The city hopes to begin construction in December, contingent on federal approval, and launch service between 2013 and 2019.

Reach Sean Hao at shao@honoluluadvertiser.com.