Rail tax bills progress at Legislature

Bills that would extend Oahu’s rail tax easily advanced in both Legislative chambers Wednesday, but the measures now face tougher scrutiny in the House and Senate’s money committees.

The chairwomen of those two committees, Rep. Sylvia Luke (D, Punchbowl-Pauoa-­Nuuanu) and Sen. Jill Tokuda (D, Kailua-­Kaneohe) have criticized the city’s handling of Oahu’s beleaguered rail project, which faces an approximately $3 billion budget shortfall.

Two years ago, when the city last asked the state for help on rail, Luke’s Finance Committee and Tokuda’s Ways and Means Committee each imposed tighter restrictions on the tax proposals that came before them. Ultimately, the Legislature authorized a five-year tax extension, based on rail leaders’ assurances that it would likely be enough.

Now, the city faces an even larger budget hole to build its 20-mile, 21-­station elevated rail system to Ala Moana Center than it did back then.

On Wednesday, the House Transportation Committee advanced Bill 349. According to committee Chairman Henry Aquino (D, Waipahu) the bill would extend rail’s 0.5 percent general excise tax surcharge an additional 30 years and compel the city to take ownership of so-called “disputed” roads that the state insists are not its responsibility.

Meanwhile, the Senate’s Transportation and Public Safety committees advanced Senate Bill 1183, a sweeping measure that would send a share of the rail tax revenues to the state for highway projects and contains a bevy of other proposals.

The 60-page and nearly 14,000-word bill actually lumps together four distinct proposals on rail, transportation and other issues into one measure. Senators said that gives them plenty of options as they negotiate what ultimately should be included in the bill.

Opponents of the consolidation, sometimes described as a “Christmas tree bill,” cried foul. In his testimony before Senators on Wednesday, local resident Steve Miller called SB 1183 a “multi-headed hydra of bad ideas.”

In its written testimony, Common Cause Hawaii said the bill violates the state Constitution because it deals with more than one subject, and it urged Senate leaders to deal with all of its varied purposes separately.

Nonetheless, senators say they aim to narrow in on a clear, coherent bill as talks progress. “A lot of work still needs to be done on this measure,” Sen. Lorraine Inouye (D, Kaupulehu-­Waimea-North Hilo) said Wednesday.

SB 1183 includes language in different parts that would extend the rail tax in perpetuity and extend it only five more years, until 2032.

It proposes enacting a low-income tax credit aimed at reducing the GET’s impacts on some residents and families. It also calls for the city to take ownership of disputed roads, build a bus rapid-transit lane across Central Oahu and create a new access road to Leeward Community College.

Sen. Breene Harimoto (D, Pearl Harbor-Pearl City-Aiea) said he had concerns over whether the city could handle such obligations to secure the tax extension.

Honolulu Mayor Kirk Caldwell said such agreements might have to be hashed out outside of the Senate’s rail bill.

“We want to say yes, but we want to say yes in a way that can get us there,” he told Harimoto, who left the City Council in 2014 to run for the Senate.

The Council’s new chairman, Ron Menor, told the Senate’s Transportation and Public Safety committees that he has “major concerns” that the state could take too much rail money, hampering the city’s ability to fund the project. Furthermore, if the state requires the city to help pay for rail construction out of its own coffers, that would come from property taxes and cut into other city services, Menor said.

“There are no pleasant choices” to rescue the project, he added.

SB 1183 also would substantially reduce the state’s 10 percent skim to administer the rail tax.

Earlier in the day, House lawmakers — particularly Rep. Joyce San Buenaventura (D, Hawaiian Acres-­Pahoa-Kalapana) — wondered why the GET had to fund rail, because it’s considered a particularly regressive tax, and asked what would happen if they don’t pass an extension.

Caldwell and rail leaders replied that they need to provide rail’s federal partners with a recovery plan by April 30 or they could risk losing $1.55 billion in federal funding.

Honolulu Authority for Rapid Transportation officials say they’re assembling a “Plan B” in case they don’t get an extension that would likely have rail end near Aloha Tower and cut multiple stations further west on the line.

“My understanding was you weren’t going to come back for more and now here you are,” San Buenaventura told Caldwell on Wednesday, referring to the 2015 session.

At an estimated $410 million to build each mile, excluding financing costs, “that’s a hell of a lot of money,” she added.