Honolulu Rail Bill Passes: Awaits Governor’s Signature

The Hawai‘i State House of Representatives passed a bill today to raise $2.4 billion in taxes for Honolulu’s rail transit project on the last day of a special legislative session.

The proposal passed the Senate on Aug. 30, 2017, now heads to Gov. David Ige for his review.

The $9.5 billion rail project is less than half built and faces a shortfall of $2.378 billion.

The measure addresses the construction shortfall by extending the General Excise Tax on O‘ahu for three additional years through Dec. 31, 2030, which will provide $1.046 billion.

It also raises the state’s Transient Accommodation Tax (TAT) by 1% to 10.25% for 13 years, to Dec. 31, 2030.

This will provide $1.326 billion.

The measure permanently increases the counties’ share of the TAT from $93 million to $103 million.

It reduces the State Department of Taxation’s administrative fee on the GET surcharge from 10% to 1%.

The measure creates a Mass Transit Special Fund to review and disburse funds to the city for its costs on the rail project.

It also requires a state-run audit of the rail project as well as annual financial reviews.

Gov. Ige supports the rail project and said he intends to the bill soon.

The project’s Federal Transit Administration deadline is Friday, Sept. 15, 2017. By that date, rail officials must show they can pay for the project. Without that assurance, they risk losing $1.5 billion in federal funding and face the possibility of having to return about $800 million in federal funds already spent.

Critics have said the project is too pricey, among other negative aspects, including its location in flood and tsunami zones.

“I thank everyone who took the time to testify this week, including the leaders from the counties,” saidGov. David Ige today on the passage of the rail funding bill. “The special session has not been easy, but the Legislature did not give up.

“I especially thank the Legislature for passing this compromise measure, which allows us to complete the rail line to Ala Moana,” said Gov. Ige. “The entire state will benefit from this strategic investment.

“My cabinet members and I will be doing a final review as we do for all legislation, but I fully anticipate signing the bill before the Honolulu City Council meets on Tuesday.”