House and Senate Disagree on Honolulu Rail Funding

May 2, 2017

Speaker Joe Souki presides over House of Representatives, who rejected a 10-year extension of the GET rail surcharge.
Credit Wayne Yoshioka

The State Senate and House today each advanced separate measures to fund Honolulu’s Rail Transit System.   As HPR’s Wayne Yoshioka reports, lawmakers must agree on one measure before adjournment Thursday or leave the project with no funding source.

Senator Kaiali'i Kahele introduces an amendment for SB 1183.
Credit Wayne Yoshioka

Big Island Senator Kaiali’i Kahele criticized the conference committee version of Senate Bill 1183.   That compromise measure raised the Transient Accommodation or Hotel Room tax for 10 years to pay for Honolulu’s Rail Transit Project.

“Using the Transient Accommodation Tax is the job killer in the state of Hawai’i.  The economic impact of this bill on our neighbor island communities and local families will be devastating.  For my home, to one percent TAT would result in an immediate loss of 4 million dollars to the economy of the County of Hawai’i.  I oppose the job killing, pilau bill we have in front of us and I implore you to support the floor amendment that will extend the rail surcharge tax for ten years, to 2037.”

Senator Donna Mercado Kim supported Kahele’s amendment with reservations.

“The general public, the visitor industry, the Counties, were not able to testify on the impacts of this measure.  Ironically, if you read page one of the bill, it states, “The Counties must hold a public hearing before authorizing the half percent tax.  So they have to hold a public hearing by the state legislature do not.”

But, the Senate adopted the amendment and approved the new bill 16-to-9.   Senate President, Ron Kouchi, and Ways and Means Committee Chair, Jill Tokuda, both voted “no.” 

Meanwhile, the House of Representatives rejected the same 10-year GET extension.    House Speaker Joe Souki.

“All those in favor signify by saying, “aye” (response).  Those opposed say, “nay” (response).  The motion fails.”

Instead, House Transportation Committee Chair Henry Aquino proposed another amendment using the TAT and GET.

Representative Henry Aquino introduces an amendment in the House of Representatives.
Credit Wayne Yoshioka

“What this does is increase the TAT from 9.25 percent to 10.25 percent for 11 years to 2028.  We’re also going to maintain the Counties’ share of the TAT.  Honolulu’s share will be directed towards rail.  We’re looking at the extension of the General Excise Tax for one year.  This floor amendment provides over  $1.7 billion.”

The full House approved the amended TAT and GET bill on a voice vote, leaving the House and the Senate with different funding mechanisms for rail.  House Finance Committee Chair, Sylvia Luke, says the solution rests with the Senate.

“The Senate really didn’t take up the floor amendment that Chair Aquino introduced but we have made it very clear the House is rejecting the 10-year extension.  So, you know, if the Senate continues to take the position that they wanna continue to tax the poor and the elderly then it is their position.  At that point in time, if we cannot come to a compromise then the discussion for rail is done for this session.”

The Legislature will recess Wednesday and both houses convene for their last day Thursday.    Wayne Yoshioka,  HPR News.