Tax estimate included rail line extensions

No politician wants to ask for the authority to extend a tax.

For the largest public works project in Hawaii’s history — a project that will improve the quality of life and provide transportation equity for generations — I believe the tax extension is necessary. Therefore, it’s important to set the record straight on my position to fund rail.

When it was clear that additional funds were needed because construction bids came in over budget, I stepped up, said the cost overruns were happening on my watch, blamed no one and sought what I believe is the best long-term financial solution for rail.

Extending the general excise tax surcharge of one-half percent is the least painful way to pay for the completion of rail. Never have I proposed to raise real property taxes for rail.

Prior to the start of the legislative session, I asked House and Senate leaders to introduce legislation proposing an extension of the GET one-half percent surcharge in perpetuity.

Before the Legislature’s money committees on Jan. 26, I was asked why the GET surcharge should be extended in perpetuity when I could ask the Council to raise real property taxes. I explained that real property taxes would have to be raised, in "rough numbers," in the range of 30 to 43 percent to cover the rail construction shortfall, the two extensions to the University of Hawaii and East Kapolei, and operation and maintenance in perpetuity.

I made it clear that I did not want to raise real property taxes because the GET is paid one-third by visitors and transients, while the bulk of real property taxes are paid by residents. I preferred placing as much of the burden as possible on those who do not live here, rather than our residents.

The Honolulu Authority for Rapid Transportation (HART), at my request, submitted multiple binders and handouts of supporting information to members of the money and subject matter committees. This included a breakdown of how much real property taxes would have to be increased to cover the additional construction costs for the first 20 miles of the rail project (5.6 percent), the two extensions (24.8 percent) and the operation of the system (8 percent). This information was available to the legislators and to the press throughout the session.

In March, a Honolulu Star-Advertiser reporter sent a Freedom of Information Act request to the Mayor’s Office requesting the backup information regarding the question of real property tax increases. Our office asked the reporter to submit the request to HART, the keeper of the documents used to calculate the real property tax breakdown.

In June, a follow-up informal inquiry was made to our office and we promptly responded with the information, which was then reported out of context, given the passage of time.

Subsequently, a Honolulu Star-Advertiser editorial which was based on this June story accused me of a lack of transparency, which was misinformed.

The fact is, the real property tax calculations were provided to the Legislature in February and March. In the end, they used that information to make their decision to extend the surcharge for only five years to cover the shortfall, and reserve debate on extending the rail line for another year.

In summary, I testified for a total of 17 hours before various hearings regarding extending the GET surcharge. Every question that could have been asked, was asked and factually answered. In many cases multiple times.

Like most legislation, the result was not 100 percent of what any one party wanted, but a compromise reached by a full, fair, open and extensive discussion held before the Legislature and the public.

I wish it would be reported that way.

Editor’s note: The Star-Advertiser stands by its reporting and its editorial opinions on this matter.