Legislators differ on rail-tax extension

A rail-tax extension is back in play at the state Capitol — but the proposal will likely face more tough scrutiny and hurdles in the weeks ahead.

On Wednesday, state lawmakers on the House’s Transportation Committee amended Senate Bill 1183 — the measure recently sent to them to address Oahu’s troubled rail project — so that it once more extends the island’s general excise tax surcharge past 2027.

This latest version doesn’t specify how long that extension would be. However, Committee Chairman Henry Aquino (D, Waipahu) said “the intention is not to make the surcharge permanent.”

The committee also re-inserted a proposal that proved controversial earlier in the legislative session. The measure once again calls for a portion of the rail surcharge to fund state highway projects. The details of how that revenue-sharing would work under the bill’s latest version still need to be worked out, according to a House spokeswoman.

The latest version also leaves the state’s administration fee for collecting the tax, commonly known as “the skim,” to be decided later.

Rep. Sean Quinlan (D, Waialua-Kahuku-Waiahole), the committee’s vice-chairman, was the lone dissenting vote Wednesday.

In 2015 and the current session, the Legislature’s transportation committees have been more accommodating to the city on rail than the money committees, which have called for tougher restrictions.

Last month, the Senate’s Ways and Means Committee, led by Sen. Jill Tokuda (D, Kailua-Kaneohe), removed the language from SB 1183 that provided a tax extension before the bill moved to the House.

Now, the measure goes before Ways and Means’ counterpart in the House — the Finance Committee — where it’s expected to receive heavy scrutiny under the leadership of Rep. Sylvia Luke (D, Pauoa-­Punchbowl-Nuuanu). The transit project faces a budget gap of about $3 billion including financing, based on the latest official estimates.

“Of course, we will be grilled before Finance,” Honolulu Mayor Kirk Caldwell said Wednesday at the Capitol after the Transportation Committee’s 7-1 vote. “HART and I and everyone else needs to be ready to answer the tough questions.”

The real negotiations on what to do about rail aren’t expected to take place until later during the session’s conference committees, when House and Senate leaders meet to hash out differences on bills.

The Transportation Committee also deferred a resolution Wednesday that would request the state auditor to compare the costs of building the last stretch of rail at street level versus above ground.

On Friday, rail officials told the committee’s members that changing to street-level would jeopardize rail’s $1.55 billion in federal funding. Krishniah Murthy, rail’s interim executive director, also said the switch would increase rail’s construction costs from $8.2 billion to $10.4 billion, although he did not provide specifics on how that figure was calculated.

Speaking in support of the resolution, Henry Curtis, executive director of the Hawaii nonprofit Life of the Land, said it was a “last-ditch effort to bring clarity and accountability” to the mass-transit project.

“We’re talking about wildly inaccurate numbers that have come out so far,” Curtis, told the committee Friday. “It’s time to talk about alternatives.”

Luke joined House Majority Leader Scott Saiki (D, Downtown-Kakaako-­McCully), Rep. Cynthia Thielen (R, Kailua-­Kaneohe) and Rep. Scott Nishimoto (D, McCully-­Moiliili-Kapahulu) to introduce that resolution.